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Public Accounts

My hon. Friend is absolutely right. The Government have, at their peril, underestimated their power in negotiating these contracts and ironing out details of them. In some cases, providers owe part of their existence to the Government, so the Government need to start punching their full weight in approaching this contract. Let me move on to the Department for International Development—I shall try to be a little briefer on this point. DFID needs some scrutiny, and I do not think that many speakers have focused on this report. In addressing the damage that the Government have wrought on the public finances, we have been clear that the NHS should not face budget reductions. However, that in no way removes the need for it to provide value for money. Given the increasing demands being placed on the NHS, efficiencies will also be essential. Similarly, although we gladly honour the UK’s spending agreements on international development, the pattern of that spending and the associated standards of financial management must improve. The PAC report on DFID’s operations in insecure environments highlights the need for change. I think that many hon. Members will agree that DFID’s performance in conflict zones such as Iraq and Afghanistan needs urgent improvement. Its spending in such environments has increased to more than £1 billion, but project success scores in the same environments have fallen while expenditure has risen. It is true that one might expect success there to be lower than in secure states, but the deterioration should concern all of those who want us to succeed in places like Afghanistan. My hon. Friend the Member for Sutton Coldfield (Mr. Mitchell), the shadow Secretary of State for International Development, made a similar assessment when the PAC report was published. He said that""brave DFID staff work…in dangerous environments to improve people’s lives, but their individual courage must be supported by radical policy and management improvements.—[Official Report, 13 November 2008; Vol. 482, c. 1019.]" I fully agree with that. It is important that the monitoring of projects for fraud and corruption is enhanced, as the risks of both are greatest in unstable countries, yet insecurity appears to have been used as a reason not to undertake full assessments of the expenditure made. Surely the potential for destabilisation demands the opposite approach—we should be more careful about expenditure in such environments. The PAC report on departmental oversight of the CDC group has been highlighted by a couple of other speakers. It reveals further failures to monitor and control public spending in an effective way, and that is especially true when it comes to the remuneration of senior staff. The strong financial performance of CDC notwithstanding, it cannot be right that the chief executive of a company that is wholly owned by the taxpayer received an increase in pay of nearly £600,000 in a space of just four years. It is extremely hard to justify total pay of around £1 million when one has complete job security and, despite the fact that the Department has tried to make comparisons with the private sector, when one does not have to compete for capital to invest. We have drawn attention to excessive pay in quangos, and this appears to be a parallel case. A number of the reports about education and skills were equally damning about many aspects of the Government’s approach in recent times. In due course, we will all end up paying for the deficiencies in literacy and numeracy on the part of both children and adult learners. To the Government’s credit, the departmental responses to the indictments in the PAC’s reports on schools acknowledge that too few people possess the key skills. However, there is little indication of fresh plans to turn the situation around, and we can ill afford the current lack of progress to continue. In conclusion, we need to return to the question of the size of the deficit. As we know, the Government are currently borrowing around £500 million a day, and one has only to see the various reports from OECD and other bodies to grasp the seriousness of the situation. The deficit poses grave dangers to the country. Ours is the worst of any major nation, but the Government sometimes say we do not need to worry because, as a percentage of overall gross domestic product—as I said, it was at 59 per cent. but it is rising rapidly—is still below the level in other countries. For instance, in Japan it is 188 per cent., in Italy 116 per cent., in Germany 78 per cent., and in France 77 per cent. The Government remind us that our deficit is only marginally larger than that of the US, but a number of the countries in that list have very strong domestic savings markets that we unfortunately lack. The danger is that we could become overly dependent on foreign buyers of our gilts. I end by returning to the theme of the day. The need to make savings can never have been greater, as with the need for proper scrutiny of what is spent—hence the role of the PAC. I think that all hon. Members owe a debt of gratitude to the Committee and its Chairman, my hon. Friend the Member for Gainsborough. I look forward to hearing the Minister’s response to a number of the points raised in the debate.