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Public Accounts

As the policy of the hon. Gentleman’s party is not to have Trident at all, I am sure that he is not particularly bothered whether that would leave us with a bit of a gap in procurement. I was interested in the hon. Gentleman’s comments about his bargain rail fares, available on his senior railcard; I look forward to the time when I may get one and take advantage of similar bargains. As regards Northern Rock, the hon. Gentleman spoke about success fees. We share his concern that costs should be tightly controlled. In fact, in this case the success fee was at the discretion of Her Majesty’s Treasury, and none was paid. I want particularly to pick up his point about the mutual sector and the possibility of returning Northern Rock to it, because I want to make it clear that no doors have been closed. Obviously, as a Co-operative MP I am particularly interested in the mutual sector. In our White Paper, "Reforming financial markets", we examined the need for diversity of provision to balance risk across the financial services sector, and how the mutual sector could help to provide that. I am aware of a research paper from Oxford that offers a suggestion on how that could be done. Officials at the Treasury are looking into that, and I would welcome it if the PAC and the Treasury Committee did so too. We then heard from my hon. Friend the Member for Great Grimsby. For a short time, I overlapped with him on the PAC, so I am well aware of his forensic investigations when he questions witnesses. Today he returned to one of his favourite themes—consultants. When used correctly, consultants can provide great benefits, but we certainly recognise that we can do more to improve value for money. As he knows, we have introduced the consultancy value programme to implement the NAO and PAC recommendations. Our approach is that a business case needs to be made to ensure that consultancy adds value and that consultants are not used in circumstances where civil servants could meet the need, but there will be occasions when the use of expert consultants is the most efficient option. I took his general point about policy decisions needing to be taken in good faith; I picked up on that at the start of my remarks. They also need to be implemented effectively, and that requires effective planning and risk management right from the start. I thank the hon. Member for South Norfolk for his kind remarks, and I well remember our visit to Boston and Washington. He talked about defence expenditure. Before I entered Parliament, I spent my time on the other side, trying to win MOD contracts, managing MOD contracts, and accounting to the MOD for the cost of those contracts, so I have a little insight into that. Changes in requirements and specifications cause the biggest headaches, certainly for the supplier, and probably for the MOD as well. Moreover, our armed services obviously want the latest and best equipment, and that causes pressure and tension. Again, it comes back to the need for effective planning at the start and effective project management. The newly formed defence acquisition reform project is currently working on the matter and addressing the recommendations of the Gray report. We all acknowledge that the NHS IT project is hugely ambitious and that it is essential that we get it right. It is obvious to everybody that many challenges remain. We still believe that Cerner Millennium and Lorenzo will be able to support the NHS in the long term. Local service providers have been set a deadline of the end of November to demonstrate significant progress in the acute sector. They will have to demonstrate that Lorenzo has been successfully deployed by Computer Sciences Corporation across a non-acute site and is on track to be deployed in an acute site by March 2010, and that there is a high degree of confidence in CSC’s ability to deploy across the NME—north, midlands and east—area by January 2016. BT will have to have successfully deployed Cerner in an additional acute site, and there must be a high degree of confidence in its ability to deploy across London by October 2015. As set out in the Treasury minute, the Department of Health will provide a note on progress by the end of this year. I shall examine the Hansard record of the detailed points that the hon. Member for South Norfolk made and write to him with a detailed response. Finally, we had the contribution of the Opposition spokesman, the hon. Member for Hammersmith and Fulham (Mr. Hands), who shares my respect for the hon. Member for Gainsborough as Chairman of a very important Committee and for the work of the PAC. I had the pleasure of serving on the Committee and believe that it is the most important Committee in the parliamentary system. The hon. Member for Hammersmith and Fulham touched on many defence projects, including the defence information infrastructure programme, which I have not mentioned so far. It has now been delivered to all the Ministry of Defence’s major headquarters, and roll-out rates for the past 18 months have been significantly higher than those of early 2008. Although there were originally delays, I hope that we are making progress. The hon. Gentleman moved on to the Office of Government Commerce, which regularly assesses Departments’ procurement functions. It is working closely with the NAO to finalise new guidance on contract management in complex procurement, which should be published before the end of the year. It is also working to embed the joint NAO and OGC good practice contract management framework and share best practice across Departments. The hon. Gentleman mentioned the CDC and the Department for International Development, and he touched briefly on the paper about working in insecure environments. It is not an option for DFID not to work in such environments—the question is how we manage that work. Pay levels reflect market-beating performance and are closely linked to delivery of the Department’s objectives. Independent evidence from the World Bank suggests that financial performance is a good proxy for the likely impact of CDC investment in reducing poverty. The Constitutional Reform and Governance Bill received its Second Reading two days ago. Some Members have taken a close interest in such measures as those on judicial appointments and the standards of the civil service. Those are important, and I would not suggest in any way that they do not matter, but to my mind the provisions to modernise the governance arrangements of the Comptroller and Auditor General and the NAO also have considerable importance. They implement the recommendations of the Public Accounts Commission in its 15th report. As the House knows, the commission wanted to ensure that the CAG had authority to form completely independent judgments about the audits and value-for-money studies conducted by the NAO, while maintaining systems of governance and internal controls consistent with best practice. I believe that the Bill will achieve those aims and set the NAO on a confident course towards even better performance. The new NAO board, which I wish well, should help to guide its staff to stronger and more incisive insights into the use of public funds, and we can all look to benefit from that. I am grateful for the helpful way in which the NAO has assisted the Treasury in getting the provisions right. I welcome the appointment of Mr. Amyas Morse, who took up his post as Comptroller and Auditor General on 1 June. He is the first CAG with extensive private sector experience, and I know that he has already set about his task with diligence and integrity and is working closely with the new NAO board under the chairmanship of Sir Andrew Likierman. I express my gratitude for the hard work of the Committee and the NAO, which provide able support. Everyone will agree that together they make a lasting contribution to the performance and delivery of public services across the UK. They keep the Government and public servants on their toes, and their work will continue to be as effective as it has always been. If this is indeed to be the last PAC debate before the general election, it will be the last time that the hon. Member for Gainsborough moves the motion, because he is to relinquish his chairmanship having served through two Parliaments. I believe that he chaired his first PAC hearing on 22 October 2001. I pay tribute to an important innovation that the hon. Gentleman made as Chairman: Committee reports that look across Whitehall. In particular, the Committee’s 17th report, from December 2005, in which I was involved, "Achieving Value for Money in the Delivery of Public Services", was a tour de force that looked through some 400 Committee reports going back 10 years. The conclusion was that there were seven key aspects of public service delivery that Departments needed to improve to achieve value for money:""Plan carefully prior to implementation…Strengthen project management…Reduce complexity and bureaucracy…Improve public service productivity…Be more commercially astute…Tackle fraud"" and""Better and more timely implementation of policies and programmes"." We can see from today’s debate that those things are as important today as they have ever been, and I encourage all public servants to read the report and take heed of the advice. Finally, I wish the hon. Gentleman well. He is a most assiduous Chairman of the PAC and during his tenure has enhanced its fearsome reputation as a robust and challenging scrutineer of public finances. I am proud to have been a member of the Committee under his chairmanship and I am delighted to have been able to respond to this debate.