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Public Accounts

It is a great pleasure to respond to this afternoon's debate, which has been of extremely high quality, and to pay tribute to the work of the Public Accounts Committee and its scrutiny of public finances. The debate has provided ample evidence of the value of that work, which is spread across a pretty dauntingly wide field, as shown by the reports. It has also provided an opportunity to hear from its estimable Chairman—my hon. Friend the Member for Gainsborough (Mr. Leigh)—whose opening remarks provided an impressive analysis of the lessons to be learned from the reports. Let us be in no doubt about the value of our Public Accounts Committee. Indeed, it has become a model for many other Parliaments that follow the British system. I have visited in recent years the legislatures of countries such as Nigeria and Ghana, both of which are very proud of their public accounts committees. Many Commonwealth countries have sought to adapt their parliamentary systems over time. Nigeria, for example, has moved to a presidential model, with a Senate and a House, and Ghana has introduced primary elections and a President. However, both proudly retained their public accounts committees. In the Nigerian Senate, the public accounts committee there ranks after only a very busy ethics committee. When I was in Ghana last month, I gave a training course to the excellent centre-right party, the New Patriotic party, which has just entered opposition after eight years in government. Ghana is now setting the pace for Africa, having made a second transition from one democratically elected Government to another. During my training course, I asked the assembled new MPs whether they could list the benefits of being in opposition, and one of the very first responses was, "Now at least we control the public accounts committee." That goes to show to what extent our Westminster Committee has provided the model for many public accounts committees across the world. It is the model for similar committees in Canada, India, Hong Kong and other countries. In his speech, my hon. Friend the Member for Gainsborough set the debate in its proper context. The Government's fiscal position is precarious and worsening. It is imperative that we find better and more efficient ways to provide public services if, as he said, the expectations of those who fund and use them are to be met. I noted with interest his appeal for revolution. He may not think of himself as a predictable revolutionary, but I can think of few more agreeable companions on the barricades come the reforms ahead. He was right to acknowledge that some good work is already being done by the Government on some of the issues that have been raised, if not nearly enough and not always at the pace that we would like. There is a danger in these debates—and, I am sure, in the work of the Committee—that we focus only on the bad practice that emerges from the pages of the Committee's reports, and ignore achievements and progress; that point was well made by the hon. Member for Glasgow, South-West (Mr. Davidson). He was right to say that Committee members should not be afraid to hold the Government to account; that is different from making a partisan attack. That sums up the attitude of the Committee. If I may say so, the Select Committee on which I sit—the European Scrutiny Committee, which is ably chaired by the hon. Member for Linlithgow and East Falkirk (Michael Connarty)—follows a similar approach. The Committee's criticism and probing is not necessarily taken as a partisan attack. My hon. Friend the Member for Tiverton and Honiton (Angela Browning) drew on her experience as a Minister and a member of the Public Accounts Committee in highlighting how slow and complex decision making can be in government. She urged that at the very beginning of the process, particularly for some contracts, someone should ask, "Is this value for money?" That is extremely important. My hon. Friend the Member for Harwich (Mr. Carswell) made a characteristically radical and questioning speech. It questioned both Government procedures and the workings of the Public Accounts Committee. I expect him to call, before too long, for a value-for-money study of the Public Accounts Committee itself, such is his dedication to small government. My hon. Friend the Member for South Norfolk (Mr. Bacon) followed a more thematic approach, and notably considered the role of the Office of Government Commerce in steering projects through once they are approved. Again, he focused on IT projects and the Government's pretty poor record in delivering on them. One particular theme that emerges from the debate is that Government Departments need to elevate purpose over process. Too often, the best way to achieve a result is left unexamined, and talented people are forced to muddle on in the way that the departmental bureaucracy prescribes. That is not efficient, and it does not give value for taxpayers' money. The lesson of the Committee's work is that there is far more value to be had for our money than we are getting at present. I should like to mention individual reports. I hope that I will be forgiven for turning first to those that relate directly to the work of the Treasury. One of them is "Managing financial resources to deliver better public services"; it is one of those slightly vague-sounding titles, but I found it particularly fascinating. I thought it staggering that 60 per cent. of Departments do not automatically include a full financial appraisal when producing policy proposals for Ministers and board members. Worse, as other hon. Members have mentioned, only 20 per cent. of Departments produced a thorough assessment of the financial implications of a policy at the time when Ministers are asked to take a decision. The Committee report is surely right to suggest that that should be obligatory if Ministers and board members are to assess value for money. I am pleased that the Government have accepted that recommendation. We also learn that half of all boards are not getting information in a form that they can use. The Government indicate only that joint financial and performance information will be provided to "a greater extent". I shall be interested to hear the Minister expand on that point in her response to the debate. Despite resource management improving, it is troubling that so many Departments are not getting proper value out of their balance sheets, and that 19 per cent. rate themselves as very weak in that area. The Government need to do more to ensure that failing programmes are not allowed to stagger on consuming funds, but are wound up promptly and efficiently instead. I congratulate my hon. Friend the Member for Gainsborough on a notable success that the Committee has had under his chairmanship. I refer to his campaign to make sure that all finance directors are financially qualified. I understand that fewer than half had a relevant qualification when he began raising the issue five years ago, but that now we are approaching 100 per cent. That is robust common sense, and I hope the Committee has equal success with its recommendations for adequate financial training for other staff as well. When it comes to managing financial resources to deliver better public services, the Government could learn an awful lot from best practice elsewhere, and perhaps they are already doing so. A few weeks ago, the Minister for Local Government came to see me and Hammersmith and Fulham council in our town hall to learn more about how the council manages its finances. The House will know that the council has cut its council tax take by 3 per cent. in each of three years, providing an average saving of £700 per resident, compared with the situation that would have pertained if the council had continued increasing the tax take at the same rate that it inherited. What the House might not know is that the council has managed to reduce its work force by some 18 per cent. in three years through efficient management and the contracting out of services. I do not believe that a single employee has been sacked, other than a set of political advisers. I am sure that if the PAC were constitutionally able to do so, it would benefit from receiving the same presentation, as would Treasury Ministers. At the same time, the Audit Commission has increased the rating for my council's services to a maximum 4 stars in its comprehensive performance assessment, and resident satisfaction with council services has increased from 53 per cent. to 64 per cent. in just two years. That shows that it is perfectly possible to get more while spending less. On the subject of PFI projects, the ground has, of course, shifted somewhat since the Public Accounts Committee produced its recommendations, given the Government bail-out of projects in recent weeks. I am not sure whether I understood the points made by the hon. Member for Great Grimsby (Mr. Mitchell) when he described PFI as outdoor relief for capitalism. A number of Committee members made various points about the report, including the Chairman about the lack of financial expertise on PFI projects and the ongoing discipline in monitoring the deal during the life of the project, which is so necessary. With reference to the Committee's excellent report, I was particularly struck by the number of projects that were not subject to competitive tendering. Only 29 per cent. of the projects worth more than £100,000 were tendered, and I would be interested to hear in the Government's response whether and how they will seek to raise that percentage. A number of Members mentioned the report on DEFRA. I found the lack of expenditure controls in DEFRA pretty frightening. The point was mentioned by the Chairman and by the hon. Members for Great Grimsby and for Glasgow, South-West. The findings were that the Department had poor contingency planning and an absence of a culture of tight financial management. Moreover, the Department has had budget problems for two years running, and little seems to have been rectified since the 2006-07 budget outturn. The Committee also pointed to an unwillingness to tackle budgetary problems within the Department's management board. This is pretty damning stuff, and again I would welcome the Minister's comments on whether DEFRA has corrected those faults. On the Jobcentre Plus network report, all hon. Members have been affected by the closure programme. Many of us, like the hon. Member for Great Grimsby, initially found it odd that the Government decided to close half of the country's jobcentres at a time of rising unemployment. The national claimant count in January was some 1.97 million, up 483,000 on the year before. The claimant count in my constituency has risen as fast as the national average, even though I already represented more unemployed people than any other Conservative MP. Locally, the number of claimants has risen from 1,974 to 2,572—up 30 per cent. in just one year. As highlighted by the Chairman and my hon. Friend the Member for South Norfolk (Mr. Bacon), the Committee has shown its worth on the restructuring of the Jobcentre Plus network by giving praise where praise is due. It seems that the whole project is delivering savings of about £135 million a year, although its break-even point will not be reached until 2012-13. Nevertheless, I would welcome from the Minister her views on the lessons to be learned from the positive aspects of the project and how they might be applied to other rationalisations in future. The final report that I wanted to highlight is about shared services in transport. That has made for less happy reading. The Chairman said that it was one of the worst cases of project management that he had ever seen. He highlighted its almost comical failings, one being that the new IT system started to communicate in German. Although it is a transport project with German content, it did not offer us any kind of Vorsprung durch Technik—a point also highlighted by the hon. Member for Glasgow, South-West. The project has been a monumental failure at a cost of £80 million. Nearly a year after the scheme was supposed to be operational, it is still not functioning properly. The £80 million wasted could have made a nice starting contribution towards building a high-speed rail network, for example. I know that that would be welcomed by my constituents, among many others. To conclude, as my hon. Friend the Member for Gainsborough said, the Committee is looking for more bang for the buck. Especially given our massive public deficit—£100 billion or more, and rising—we desperately need more careful control over our public finances. My hon. Friend said that we must be vigilant in guarding against waste, that spending taxpayers' money is what Governments do—probably never more so than under this Government—and that spending money is the easiest thing in the world, but getting something practical for it is harder. I congratulate the Public Accounts Committee and look forward to reading and commenting on, and perhaps even responding to, its reports in the future.