I beg to move,
That this House takes note of the 35th and the 43rd to the 63rd Reports of the Committee of Public Accounts of Session 2005-06, and of the Treasury Minutes and the Northern Ireland Department of Finance and Personnel Memorandum on these Reports (Cm 6879, 6900, 6908, 6924, 6959, 6981 and 7017); and of the 1st to the 8th and the 10th Reports of the Committee of Session 2006-07, and of the Treasury Minutes and Northern Ireland Department of Finance and Personnel Memoranda on these Reports (Cm 7018, 7019, 7020 and 7035).
It is a pleasure to move the motion that stands in my name and that of other right hon. and hon. Members. Members will remember that the last debate on the Public Accounts Committee was held rather late at night. The uncivilised hour did not do justice to the important issues under discussion, so I am pleased that the usual channels have ensured that today’s arrangements are more fitting. The Committee responsible for overseeing Government spending each year of more than £500 billion of public money should never be shunted into the graveyard slot.
The hour today may be earlier, but the Committee’s output has in no way slackened since our last debate. Over that time, many have questioned whether some of our public bodies have the capability to deliver, or, as the Home Secretary might put it, whether they are fit for purpose. Some people say that Parliament has declined in the 150 years since the motion to create the Public Accounts Committee in 1857, but I do not think that anybody could argue that the Public Accounts Committee is less effective now than it was then. Indeed, I believe that it is very effective. All our reports are agreed by all Members of the Committee, but that does not stop them being hard hitting. It does not stop more than 90 per cent. of the recommendations in our reports being accepted by the Government.
There is no point, however, in simply accepting the recommendations. We have to ensure that the recommendations are implemented. With my encouragement, the Comptroller and Auditor General is increasingly returning to all the recommendations and Treasury minutes and ensuring that the recommendations are carried out. In that context, I say to Members on the Treasury Bench that timeliness is important. It is important that we get our reports out rapidly and that they are up to date. The Government should not use the excuse of saying that although a particular report is fine and that they agree with it entirely, it is based on a National Audit Office report that was published nine months or a year ago and therefore all the excellent recommendations are already being implemented—when, on certain occasions, the Government, or rather accounting officers and their civil servants, have delayed the whole process. The process relies on the National Audit Office reports being agreed between the National Audit Office and the Department and there is often a long period of negotiation.
That was particularly apparent in the recent important report on the NHS computer system—a system that is worth about £12 billion. I notice that the Government’s response this week says, “Well, excellent report by the PAC, but we’re doing all this—it’s an out-of-date report.” I am going to call the Government’s bluff. I have talked to the Comptroller and Auditor General about the matter and, following my encouragement, we are to have another NAO report on the NHS computer in the next year so that we can have an update to check whether all the excellent recommendations of the NAO and the PAC on this £12 billion computer system—that amount is equivalent to the entire cost of the Olympic games—are being carried out.
I commend the hon. Gentleman for his remarks. It will also be important for the NAO and the PAC to scrutinise public expenditure on the Olympics. Does he welcome the fact that we will oversee expenditure before the Olympics, rather than after the event, to ensure that money is spent properly during the years leading up to the games?
The hon. Gentleman is an assiduous member of the Committee. It is an important new departure that, following our encouragement and pressure, the Comptroller and Auditor General will quite rightly have a continuous oversight of spending up to the Olympic games. We do not want a situation in which there are massive cost overruns and numerous PAC reports have to be produced long after I have retired as the Committee’s Chairman to point to lessons from the Olympics. Such reports would be too late because when would we have the chance to host another Olympic games?
We are worried, which is why we are insisting on tight scrutiny now. The venue and timing of Olympic games are absolutely fixed, so many host countries have found that the private sector has held the public sector to ransom at the last minute. I hope that I am not speaking too soon or out of turn, but I think that we are putting in place mechanisms that will mean that that will not happen this time. We will be able to keep a close track of any profits that the private sector makes. We will attempt to be the guardian of the taxpayer.
Will my hon. Friend, who chairs the Committee with great distinction, indicate what sort of attention the Committee is paying to the sums that will be allocated to the Olympic games and the way in which they might reduce the amount available for other deserving and vital charitable organisations?
My hon. Friend might have noticed the publicity surrounding the last National Audit Office report, which made precisely that point. The way in which many good causes are being put at risk because money is being drawn into the great bottomless pit of the Olympic games is a serious matter on which the Treasury must keep a close eye. Many such good causes have no other means of support and are beyond the help of the taxpayer, unlike the Olympic games.
Whitehall’s capability matters deeply to the Committee because if there is a capability gap, a delivery failure often follows, with the most effective use of public funds being one of the casualties. The civil service publishes its own capability reviews. I want to highlight some of the key themes drawn from the work of our independent Committee. The Committee is genuinely independent and, in that context, I pay tribute to the majority party members of the Committee, who, without being party political, often have to make trenchant criticisms of the civil service. They do so with great courage, so we should pay tribute to them. The key themes from our work highlight where the Government must up their game if they are consistently to deliver the services that the public pay for and deserve.
The need for outstanding leadership in our public services has never been greater. The accounting officers who appear before our Committee not only have their formal duties, but are leaders with responsibility for driving through results. Their appearances before our Committee are often the only occasions on which they appear before a Committee. Permanent secretaries might appear before the relevant departmental Committee once a year, but they are held to account before the Public Accounts Committee.
Too often, poor leadership scuppers the effective implementation of public policy. Urgent leadership not only saves money, but can help to save lives. I am especially proud of our report on stroke care in the NHS, which I tried to push through as much as possible. The report called on the Department of Health to drive the message home to health care professionals that stroke was a medical emergency requiring a 999 response and rapid access to scanning to determine the most appropriate treatment, which is something that routinely happens in the rest of Europe. Encouragingly, the Department felt that implementing the Committee’s recommendations could save as many as 10 lives a week and some £20 million a year in the NHS. That extraordinary outcome shows that our actions as a scrutiny Committee are not merely dry paperwork exercises, but can actually save lives.
On the other side of the coin, we have recently heard about the failure of leadership displayed at the Rural Payments Agency, which could hardly have made a worse job of paying the new £1.5 billion EU subsidy to farmers. The agency’s disastrous handling of the single payment scheme brought distress to many, some of whom were my constituents. Indeed, there were some suicides, and farmers were driven mad with frustration, with some of their businesses threatened. The events should be recorded in a civil service textbook as an example of what not to do. The experience should be held up to every civil servant as an example of how not to run a project.
I am giving little away when I say that the Committee’s forthcoming report will not pull its punches. However, it is being delayed because Johnston McNeill—I do not like naming civil servants, but I occasionally have to do so, although I have tried to avoid that during my time running the Committee—the former accounting officer who was suspended, has so far tried at every turn to avoid appearing before us, which is highly regrettable. The whole system of parliamentary accountability, which has developed over many years, depends on accounting officers being held to account in front of a parliamentary Committee, however difficult that might be for them. Frankly, no one ever gets sacked in our system, so the least that people can do is to turn up and be held to account, but so far this man has not done so.
Does my hon. Friend agree that it would be helpful if Helen Ghosh, the present accounting officer of the Department of Environment, Food and Rural Affairs, were to co-operate with the Committee? Although my hon. Friend said that civil servants never get sacked, Mr. McNeill was removed from office on 16 March 2006 and removed from employment on 1 December. I have calculated that he was paid a salary of about £80,000 during that time. He was probably paid another £120,000 on top of that in disbursements, payment in lieu of notice and so on. We are yet to hear from the permanent secretary an accurate account of the total expenditure of public funds since Mr. McNeill’s removal from office on 16 March, although we have been asking for it for five or six months.
I am grateful to my hon. Friend. Of course, I should not have said that civil servants never get sacked—they rarely get sacked. However, if they do get sacked, they have to be held to account over the often generous severance payments that are made to them. Parliament has a right to know about those payments. That is true not just for DEFRA, but for the Foreign Office, in which, as my hon. Friend knows, there have been other instances.
I am afraid to say that an increasingly unwelcome tactic is being deployed by accounting officers at our meetings. They give the enticing promise of notes containing golden nuggets of further information by saying, “I would like to answer the hon. Member’s question, but I do not have the information now, so I will provide a note.” Somehow, the notes do not arrive—tomorrow never seems to come. The notes continually fail to reach us, which delays our discussions and holds up our reports, which ensures that the Government can say that the reports are out of date.
I hope that it will be noted throughout Whitehall that accounting officers have specific duties to the Committee of Public Accounts within the terms of their appointment. Those duties exist for a purpose. Transparency and openness to scrutiny are hallmarks of strong leadership, not irritations to be avoided. We have a right to expect better from senior public officials than such a betrayal of their responsibilities.
Never again does my Committee wish to hear an accounting officer defending the unacceptable face of capitalism, as was the case during our hearing on the poor deal for refinancing the Norfolk and Norwich private finance initiative hospital. In that case, the private sector frankly took the public sector for a ride. Accounting officers’ duties to my Committee are a reflection of their broader duties as stewards of public funds. Those duties should be borne in mind at all times if we are to avoid such failures as the loss of £5.2 million of taxpayers’ money, spent while trying to save MG Rover. That is the subject of another report that we are considering today.
Before my hon. Friend moves on from the subject of the Norfolk and Norwich University hospital, I am sure that the chief executive and the finance director of that hospital would like it placed on record that they would have liked the contract to contain a clause requiring a sharing of the refinancing benefits. It was not that they did not want such a clause; they were advised by their advisers to try to get one, but they were prohibited from doing so by Treasury guidance at the time, which made it impossible.
I am glad that, thanks partly to the work of the Committee, we are now much more astute in dealing with refinancing gains, and I am confident that there will never again be a case similar to that of Norfolk and Norwich University hospital, although perhaps that is a dangerous thing to say.
I know that the hon. Gentleman is a big fan of the Office of Government Commerce and welcomed it as an innovation, but does he think that sufficient lessons are being learned? He said that he hopes that they have been learned, but permanent secretaries who come before us give the same excuses time and again, and do not learn the lessons. We hear Permanent Secretaries make the same points that they made when they gave evidence three, four or five months ago. Does he think that the OGC is doing a good job in that regard?
The creation of the OGC, particularly when it was under the inspired leadership of Mr. Gershon, is a welcome innovation of the Government’s, and of course his work has influenced other aspects of government. The hon. Gentleman is quite right: we continually find that lessons appear not to have been learned, and although the OGC has an excellent remit and does good work, it lacks the ability to enforce its will in Whitehall. Perhaps it needs to be raised in the pecking order, so that we can ensure that the private sector knowledge that it has acquired is reflected in the public sector’s saving money, particularly in procurement. I do not want to be a merchant of doom. I see that there are people sitting in the civil service Box in the Chamber, and I acknowledge that we have to pay tribute to them. The civil service has thousands of committed people of outstanding quality at all levels, and we try to pay tribute to them when we can, particularly to individuals, including those civil servants, who are often younger, who take on a particular project and deal with it over a number of years with great dedication.
To turn to another key theme, I stress that those high-quality people have to work with low-quality information, poor systems and inadequate information technology. To come right up to date, yesterday we had before the Committee Mr. Ian Taylor, an interesting man. He has wide private sector procurement experience. Indeed, he is a past president of the Chartered Institute of Purchasing and Supply, so he is at the top of his profession in the private sector. He is now director of the centre for procurement performance at the Department for Education and Skills, and I congratulate the Government on bringing in a man with a particular skill. He told us yesterday that in his view, public sector people are every bit as skilled as those in the private sector, but the information systems in the public sector are so bad that no private sector firm could afford to put up with them. They would simply go out of business. They do not provide the data that public sector leaders need to manage effectively or to develop robust strategies for delivery.
In that context, the Home Office should step forward. The Committee has engaged in a persistent investigation of the Department’s decision to release from prison foreign nationals, many imprisoned for ghastly offences, without giving any consideration to whether they should be deported. It is a well-known issue that cost the former Home Secretary his job. We revealed a Department entirely unaware of the scale and political sensitivity of the problem. The Department revised its calculations on that matter with such rapidity that we, and indeed the present Home Secretary, concluded that the Home Office staff were running around like headless chickens, unable to produce reliable information or a coherent response.
At this point, I must pay tribute to one member of the Committee in particular, my hon. Friend the Member for South Norfolk (Mr. Bacon), without whom the picture may never have emerged. We greatly welcome his assiduous work on the Committee, even if he is a bit of an anorak; we forgive him for that. Perhaps the age of Lincolnshire cavaliers such as I must give way to the age of East Anglian roundheads in time. We are grateful for what my hon. Friend achieved. It was actually achieved on the back of one of the notes that I referred to earlier. There had been persistent delay in providing a note. We had asked for it again and again, and my hon. Friend, just a day before the hearing that the permanent secretary was due to attend, ensured that the note was delivered. The rest, as we know, is history.
In the NHS, the Committee found that a lack of accurate information meant that no one had any realistic idea of how many people die each year in patient safety incidents. To compound that, nearly one quarter of incidents and a staggering 39 per cent. of near misses were simply not reported at all. We demanded that the National Patient Safety Agency make it simpler for trusts to report incidents and collect information on the factors that lead to death and serious harm in hospitals. Again, that is not some dry bean-counting exercise; it is about saving lives.
Too often, Departments lack the basic capability to measure the things that matter and to learn from them, and to pioneer new approaches. When new approaches are introduced, they do not always take into account the complexities of delivery, and that is the subject that I next want to discuss. The Department for Work and Pensions contact centres are often staffed by people working on flexitime contracts. One might think, “What a sensible arrangement to save money,” but of course it means that they are not available when most of the telephone calls come in. We have all been at the end of a call centre line. Because IT systems are not linked up, customers have to give related Departments and agencies the same information time and again, and it drives them crazy. That wastes time, duplicates effort and infuriates customers. There is an obvious principle here that cannot be expressed too often: when developing strategies, put the needs of the customer first. The public sector is run not for the public sector producer, but for us, the public.
Reliable performance information is especially important when it comes to Government efficiency. We have had two hearings on the Government’s efficiency programme in the past year, both of which highlighted how crucial it is to measure progress accurately. Our first hearing highlighted the important point that there is a lack of agreed baselines against which to compare progress, and there are weak systems of measurement and validation. Our second hearing identified the progress that the Government have made in improving the robustness of how gains are measured, but even so, over two thirds of reported efficiency gains still carry a significant risk of inaccuracy.
There remain big opportunities to improve public sector efficiency. We are in a new era of politics. As the parties draw closer together, more scrutiny will shift from issues of ideology to the terrain of whether particular Departments are efficient, and to how much can be saved. The sums that can be saved are staggering. First, the public sector must aim to redirect resources to the front line. Hacking away at the complexity in the benefits system is one way to achieve that. My personal opinion is that we are far too reliant on means-tested benefits, which makes it impossible, year after year, for a Department to ensure that its accounts are accepted by the Comptroller and Auditor General.
Secondly, as the Government are increasingly commissioning services, they must become a lot more commercially astute—we have already mentioned the OGC—and that will require a much better ability to manage contracts. Thirdly, we need to examine more closely how the Government estate is managed. That might sound a boring issue—how many debates are there on the Floor of the House about how the Government estate is managed? However, the potential savings are, again, enormous. We must include in any such study the potential for moving more civil servants to lower-cost locations beyond the Westminster village. We are often told that an agency or Department cannot move because it has to be close to Ministers, but how many civil servants ever actually meet Ministers? How many of them have to be in Westminster in central London, one of the most expensive places to locate in the world?
Fourthly, there is a tendency for Government to become more complex. To combat that tendency, Government must work to rationalise functions that have been duplicated and to eliminate entirely those functions and bodies that are unnecessary. I have been encouraged by a number of developments since the Committee’s hearings. The Government have promised that, in future, before they claim efficiency improvements—this is an important point—they will take into account how much they have spent to achieve those improvements. One might think that that is an obvious point, but it is now on the record. The Chief Secretary—and I welcome what he has done in this area—agreed to publish a breakdown of departmental performance, again, after we applied some pressure. I am sure that he was going to do it anyway, but we applied that pressure. That agreement will provide welcome transparency which, as we all know, is essential in measuring and analysing performance. We have a great deal to learn from the way in which the Office of Management and Budget and the Executive Office of the President in the United States ensure that there is complete transparency in all those areas to improve efficiency.
Reliable information, too, is a prerequisite for sound financial management. The effective management of public money is the bedrock, as we know, of successful policy delivery. It is at the very core, too, of the Committee’s work. That is another key theme: sound financial management should be straightforward, but many parts of Government simply cannot get it right. For instance, Government must collect the tax which is owed to them—a simple point—but due to financial mismanagement lots of revenue is not collected by HM Revenue and Customs. We found that not all information on VAT debt recorded on the main VAT computer system had been transferred to the so-called trader register. That may appear to be an obscure point, but it meant that some £900 million of debt failed to appear on the debt case management system. That is hardly a first-rate example of financial management by a department that should be at the forefront of such matters.
We have discussed weak financial management, but “weak” is too kind a description of financial management in the Home Office, which somehow failed to reconcile its cash records with its bank statements. The manager of even the smallest corner shop knows that it is crucial to carry out such a basic reconciliation. At one point, the Home Office appeared to value the sum of all transactions going through it at £27 trillion—more than every single transaction in the world in the past year. That was the result of confusing the value of an invoice with an account code. Those people are entrusted with public money, but they apparently thought that the value of transactions going through the Home Office was £27 trillion. We are told that splitting the mismanaged Department into two is the answer—we will have to wait for the proof of that particular pudding.
It is good news that the Government have acted to tackle weaknesses in EU financial management, and I pay tribute, again, to what the Chief Secretary is trying to achieve. Almost a year has passed since the Comptroller and Auditor General called on each member state to produce a consolidated account for all EU funds spent in that state. One would think that that was an absolutely basic point: why on earth should we not know how an EU state is spending EU money? I urged the Government to set an example by preparing such an account for the UK, as we had not done so before. The Government agreed, and they are developing that with the National Audit Office. I congratulate the Government on being at the forefront of that initiative, and we will watch the outcome with interest, as it may be the beginning of an era of much better management of EU money.
I remain convinced that Government Departments and other public bodies must urgently improve their financial and commercial expertise. Thankfully, there has been progress in appointing commercial directors and professionally qualified finance directors, as recommended by the Committee on many occasions. Only yesterday, for instance, we looked at further education colleges, and we found that there was a worrying tendency for governing bodies not to be interested in procurement and for their business members not to be consulted. That is common, and virtually without drawing breath we could save £75 million that could go back into education. Audit committee members with business experience are increasingly involved in the work of Departments, but are those business members encouraged to influence the main areas of projects, programmes and measures? Despite the unarguable experience of many audit committee members in dealing with the strategic financial management issues with which some Departments are unable to come to terms, the extent to which those expert outsiders are welcomed to the hearth varies. The attitude that people with private sector experience should not be in the highest reaches of government is still too prevalent in Whitehall. That may be unfair, but we have encountered that tendency.
Across the board, the Government appear to have introduced more initiatives, projects and programmes than they can effectively finance and implement at any given point in time. No doubt all Governments have been guilty of that, but we see it especially in the defence and health sectors, as well as in our road-building programme. In our last look at major projects in defence procurement, we were concerned about what was happening in that area. Yesterday, in his inimitable way, the Comptroller and Auditor General told me that to get quarts into pint pots individual projects are drip-fed with resources—again, I presume that has always been Whitehall’s way—time frames are stretched; and specifications are changed. The first consequence is often delay but, as night follows day, cost increases follow project delays. Those are the findings of a man who has a lifetime of experience at the highest reaches of Whitehall. That creates a vicious spiral: overruns cost more; budgets run dry and projects can progress only when extra funds can be freed up; time lines are further stretched; and specifications are subject to revision and reduction. In the end, as the Committee sees again and again, Departments pay more for something; they get it later than they wanted; and it does not do all the things that they need it to do. That worrying picture, I am afraid, is frequently seen in Whitehall.
The Government claim that efficiency savings will free up cash to spend on a host of valuable projects, and they produce anecdotes of isolated successes to cover up huge systemic failures. As we have made clear, however, they have massively overstated the savings that they have made to date. They still fall short of resources, and they continue to drip-feed and delay projects, winnow down their specifications and supply defective services to the citizens of this country. It is right for Departments to be ambitious in seeking to serve the taxpayer, but those ambitions, if they are to come to fruition, cannot but defy the iron constraints of Whitehall’s defective capacity to deliver. I absolve Ministers of blame in many cases—they come, they go—but I repeat, if those ambitions are to come to fruition they cannot but defy the iron constraints of Whitehall’s defective capacity to deliver and the Government’s inability to fund all the programmes that they claim to be implementing.
The Committee seeks to be a strong force for good by taking a balanced look at what is going wrong and identifying where improvements need to be made. We do criticise, but we also advise and commend. These observations are, I hope, valuable and constructive. I am able to make them only as the result of a great deal of hard work by members of the Committee. I should like to thank everyone who has left the Committee since the last debate: the hon. Members for Burnley (Kitty Ussher) and for Portsmouth, North (Sarah McCarthy-Fry), as well as my hon. Friend the Member for Tiverton and Honiton (Angela Browning). In their place, we welcome the hon. Members for Hartlepool (Mr. Wright) and for Sittingbourne and Sheppey (Derek Wyatt), as well as my hon. Friend the Member for Ludlow (Mr. Dunne) I pay tribute, too, to the Committee staff, including those who have departed or joined since the last debate. Mr. Nick Wright was an excellent committee Clerk, and we greatly enjoyed working with him. We welcome from the Foreign Office—we forgive him that—Mr. Mark Etherton. I thank, too, Chris Randall, the Committee assistant, for all her support, and I welcome her replacement, Phil Jones.
Of course, we thank Sir John Bourn and the National Audit Office, whose continuing support to the Committee is invaluable. Unbelievably, on average, the NAO publishes a value-for-money report every six days for us to consider, and its support above and beyond that greatly enhances the Committee’s effectiveness. During the period of direct rule, the Committee dealt with the reports of the Comptroller and Auditor General for Northern Ireland, but luckily that responsibility, thank God, is now about to be taken away. It is not that we did not enjoy it, but we always thought that it should be done locally in Belfast by people on the ground.
Our achievements were affected by other developments. In particular, I welcome the passage of the Companies Act 2006, which gives the Comptroller and Auditor General access rights to audit Government-owned companies. The Act was a long time in the making, but it is an important step. I should also highlight the Chancellor’s request that the NAO work alongside the Better Regulation Executive to develop a process of external review.
Unlike the Chancellor on another occasion, I shall resist making a final dramatic announcement—I am not sure that I have any power to do so, anyway. I shall therefore conclude my speech by saying simply that, with the coming comprehensive spending review, we face the probability of the Government’s tightening their money belt; we know that. True efficiency and sound financial management will be ever more vital in those changing circumstances. As we approach our 150th birthday, I can confidently state that the Committee on Public Accounts will continue to approach our scrutiny of public spending with the unbending commitment that Mr. Gladstone would have expected of us. The Committee is more than strong enough to take on the challenge, and I commend its work to the House.
I agree with our Chairman in welcoming the monitoring role being undertaken in relation to the NHS contract and the Olympics. Those are areas in which the Public Accounts Committee and the Public Accounts Commission could get together to devise a longer-term, more systematic way of ensuring that we identify individual cases that need to be reviewed, as well as a review procedure.
Like the hon. Member for Gainsborough (Mr. Leigh) and all hon. Members, I congratulate the National Audit Office on its work and thank it for the support that it provides. In fact, it is more than support, because without the NAO we would not be able to do our job; we would merely scratch at the surface of problems. We depend utterly on the reports that the NAO produces. Producing a report can take up to six months; the detail of the reports—albeit not necessarily the value judgments they contain—is agreed with the Departments concerned; and they can cost more than £100,000 each to produce. That sounds expensive when one considers that we get two a week to deal with, but when we look at the other side of the picture we see that the NAO is one of the best investments in the public sector because the return it gives to Government is eight times its total expenditure. The money it receives from the Treasury is, in effect, recycled back into the system via the measures that the NAO recommends, and so efficient has the NAO become that, as a result of a request from the Chairman of the Committee and myself as Chairman of the Public Accounts Commission, it aims next year to increase the rate of return from eight times expenditure to nine times—a remarkable achievement.
With my Liaison Committee hat on, I want to thank the NAO for its increasing participation in the work of the Select Committees. In the 17 years since I came back to the Public Accounts Committee—I was a member before I became a Minister in the ‘60s—I have noticed the other Committees’ understandable envy of the qualify of back-up that we receive. I am delighted that, increasingly, the NAO is providing support to the other Select Committees. I hope that the Chairman and I can discuss further with Sir John Bourn methods by which we can expand the NAO’s work into new areas in which it can help Parliament.
In that context—I hope you will forgive me for straying from the subject of the PAC reports, Mr. Deputy Speaker—I want to take this opportunity to remind hon. Members that the NAO is Parliament’s watchdog, not just the PAC’s watchdog. It is a watchdog for individuals Members of Parliament, who can take problems to the NAO. They should not go on fishing expeditions or question matters of policy; the NAO deals with value for money, probity and similar matters. If an MP presents sufficient evidence to start an investigation, the NAO will burrow into the case for them.
Many years ago, I had representations from UK shipping interests worried that, in the first Gulf war, Britain had received only five of the masses of contracts for shipping to the middle east. I delved for a while, but could not get very far, so I spoke to a member of the lobby with whom I had worked on matters royal. He—David Henke—got permission from The Guardian to make inquiries elsewhere in the country and we built up a dossier that we took to Sir John Bourn. He set up an inquiry, which led to a change in the contracting procedures of the Department involved. In the Turkish university case, impropriety was alleged against the institution. No impropriety was found, but inefficiency was, and although the inquiry had cost £80,000, the NAO said that the Department saved more than that through the changes made as a result of the NAO getting involved.
I could cite various other examples of the way in which the NAO’s help is available. It is not to be abused or pushed into the political arena, because that will undermine its standing, but it is there to be used effectively and wants to be used effectively. Sir John often says that he welcomes inquiries from Members of Parliament. Last year, he dealt with almost 100 inquiries from our parliamentary colleagues. It is good to know that they are beginning to realise that that asset is available to them.
I shall not talk today about matters of great importance such as the Gershon inquiry. I have made my views on that subject well known to the Financial Secretary, who has had to suffer my irreverence in the past. Instead, I shall speak about two reports that I think will not be dealt with in any great depth—indeed, I do not intend to go into them in detail—but which are important because of the long-term benefit to be gained from them.
The first is the report on child obesity. We were aware in general that there was a problem of obesity, but I was surprised to learn from the NAO that it costs the NHS £1 billion a year and the economy between £2.3 billion and £3.6 billion a year, and that those costs will have increased by a further £1 billion by 2010. Child obesity is therefore a financial problem but, more important, it is a life problem for our constituents, leading to high blood pressure, heart disease, type 2 diabetes and reduction of life expectancy by up to nine years.
I told the Committee that almost 10 years ago I attended a conference in the United States. At one session, we were told that brand preference had been identified in children as young as two, because of the use in advertising of toys and cartoon images, which created not an awareness of what the product being advertised was, but an awareness that the product gave access to something else that was desirable. Two-year-olds were being corrupted into nagging or wailing at their parents to get the product in question, which was probably grossly unhealthy. At that time—a fair while ago—the Americans were anticipating seeing in the near future heart attacks in patients as young as 14. The problem was that severe. We have a chance to act before the problem becomes that severe in the UK.
The incidence of child obesity has increased in this country. Between 1995 and 2004, the percentage of two to 10-year-olds who were obese increased from 9.9 per cent. to 13.4 per cent. The relevant Departments have been set a public service agreement target—it might not sound dramatic but will be difficult to achieve—of stopping the annual rate of increase in obesity between now and 2010. If they achieve that, they are to be congratulated. It is a little worrying that they did not have up-to-date statistics—they were at least two years old—but they have only relatively recently become conscious of the seriousness of the impending problem.
During our hearing, we were told that Ofcom planned to introduce restrictions on the advertising of foods high in fat, salt and sugar. Since then, it has done so, but those restrictions came under attack for their inadequacy. Which?—in my days as a Consumer Affairs Minister it used to be called the Consumers Association—is singularly critical of them and points out that the method used to define which television programmes are to be subject to restrictions does not cover those that are watched by the highest number of children. Those advertising restrictions relate to those programmes that are designed for children and fail to recognise that children watch programmes other than those designed for them. Indeed, the top 27 programmes most popular with children are all excluded from those restrictions because they are not children’s programmes. The relevant index used shows that the majority of those programmes’ viewers are adults, so, regardless of how many youngsters watch them, they are not covered by the restrictions.
Ofcom’s self-assessment of its proposals claims that exposure to such advertising will reduce by 41 per cent. for 10 to 15-year-olds and by 51 per cent. for four to nine-year-olds. Which? carried out a survey in which 86 per cent. of its members said that that they want restrictions based on the time of broadcast, which would be more logical. It argues that the times when children are most likely to be watching television should be advertisement-free as regards particular products, and estimates that the introduction of such a watershed would reduce by 81 per cent. children’s exposure to advertisements for foods that are damaging to them. I should like Ministers to ask Ofcom to look at the matter again, from the consumer and health point of view, and not so strongly from the financial point of view of the industry. I understand that financial considerations must be taken into account, but the case for profit as against child deaths, heart attacks and illness is not a difficult one for me to assess—I know which side I would be on.
I was a Consumer Affairs Minister many years ago. In fact, it was I who persuaded Harold Wilson to set up a Department for consumers. Having said that it would be better value for money if we gave more money to further education than to universities, I was discreetly moved to a competition remit. When I looked at it, my heart sank and thoughts of my political future disappeared. Then I saw that the last words were, “and consumer affairs”, at which I thought, “This is promising.” Since then, Departments for consumers have become stronger and stronger.
I welcome the revelation that primary care trusts have been asked to weigh schoolchildren annually. However, when I asked what information was given to parents, I was amazed to be told, “Oh no, we don’t give information to parents, but we do feed it back to schools”—presumably in terms of broad statistics rather than individual instances.
It seemed anomalous that information would be fed back to schools, PCTs, children’s centres, local authorities and Government offices, but not to parents. When I asked for an explanation, the Department of Health provided a supplementary memorandum, which said, at paragraph 2(a):
“It is unethical to screen children (ie take children who do not know that they have a health problem and tell them that they do) and inform their parents, when services to treat overweight and obesity are not uniformly available”.
Frankly, that is one of the most unethical comments I have ever heard, yet it was the unanimous decision of the expert advisory group. It is unethical not to be able to tell parents that their children are at risk, when the local trust knows that. Later on, the memorandum says:
“Schools are aware that parents can ask their PCT for their child’s height and weight following measuring.”
Schools are aware—note that—but no one tells the parents. It continues:
“We will take action to let parents know that they can do this.”
That is a preposterous situation. This shows the value of a Select Committee-type inquiry. The Department was forced to backtrack between the time of the hearing and the time that it sent out the memorandum, but the original position remains implicit in the wording of the eventual submission.
I turn to a subject on which I want to get at the facts. I do not expect Ministers to be able to give me an answer today, as it is a very detailed issue; I will be perfectly happy if they write to the Committee subsequently. We had a recent inquiry about the gas distribution network and I asked questions about pipeline replacement. I discovered that 58,000 miles of pipe is regarded as being at risk and that it would take 51 years to replace it, although it represents a third of the total network. That does not mean that every pipe into every house, or anything like it, is at risk, and I emphasise that much of the mileage will be in the major pipelines. However, I suggested that 58,000 miles and 51 years was “staggering”. Mr. Buchanan replied:
“It is very serious quite clearly.”
“Not just serious, but very serious.”
“Yes, very serious.”
We then established that the 51 years had been reduced to 30 years to try to accelerate the replacement process. It will cost approximately £430 million over a five-year cycle to replace the pipeline.
We discovered that there were three different types of pipe. The use of the original cast iron pipes started at the beginning of the last century and continued until 1970. Those pipes are subject to corrosion but, because they are cast iron, their vulnerability can be reasonably predicted, as long as no earth movements occur. A second type of pipe, called ductile iron, was introduced in 1970 to replace the cast iron pipes. However, it emerged that, although the old, cast iron pipes were subject to predictable failure, the failure of the new pipes was unpredictable. That is clearly serious. People have no idea where to start work.
I asked whether a major part of the new piping was in new housing estates that were built since 1970, and that was the case. To be fair, the matter was not the witness’s direct responsibility. He said that he guessed that
“the large majority of it would be in urban areas”.
That applied to the cast iron and the ductile iron piping. I asked when the pipes would be replaced, but it was a frustrating series of questions. I asked three times when work would be completed and got no answer. Eventually, I asked for a report.
We had a written report from Ofgem, but it is not the easiest to read. It is two pages and I assure hon. Members that I shall read only a bit of it. It is important to stress that I do not want to be alarmist. The encouraging aspect of the report is:
“HSE required Transco to decommission all medium pressure ductile iron… mains within 30 metres of property by 30 April 2003.”
As far as I can make out from the report, that happened. We understand from the Health and Safety Executive that that resulted in more than 2,800 km—1,750 miles in my non-metricated language—being decommissioned.
However, buried towards the end of the two-page report is the line,
“serious concerns remain about the integrity of MPDI mains; and… any additional lengths which are found or become at risk must be replaced as soon as reasonably practicable and in any case within 12 months of being found.”
I appreciate that it is not the Financial Secretary’s Department’s responsibility—and I do not mind if a response comes from a Minister who is responsible—but I want to ask him whether the precise “serious concerns” will be spelled out and whether a risk assessment will be conducted of the pipeline network.
I am sorry to have spoken for so long.
I begin by paying tribute to the work of the Public Accounts Committee and the National Audit Office. They are the jewels in Parliament’s ability to scrutinise the Executive and the Government. I was struck by the remarks of the right hon. Member for Swansea, West (Mr. Williams) about the development of the NAO’s work and its support for other Select Committees. As a former member of the Health Committee, I can tell the Chairman of the Public Accounts Committee that some of our work would have greatly benefited from input from the NAO. We all benefit from work such as the report on hospital- acquired infections and many other issues, which the Chairman mentioned.
So many reports are outstanding—in both senses of the word—and are worth the House’s time today. The hon. Member for Gainsborough (Mr. Leigh), who opened the debate, referred to the previous occasion when the House debated outstanding reports as a “graveyard slot.” I fear that a Thursday so close to local elections almost gets into that category. Nevertheless, it is an opportunity for good quality contributions, such as those that have already been made, to draw attention to the work of the Committee and the NAO.
I underline and echo comments not only about the value of the work of producing reports and making recommendations, but about the essential element of following up and ensuring that recommendations are acted upon. For example, the Committee has produced more than one report on hospital-acquired infections over the years and I am struck by the number of recommendations from the first report, which was published more than 10 years ago, that were not implemented. The NAO had to upbraid the Department of Health in its subsequent report of a couple of years ago. I await with interest further reports on the subject to ascertain whether substantive progress has occurred. I fear that much remains to be done.
I want to concentrate briefly on three reports, which are on the Norfolk and Norwich private finance initiative hospital; urban green space, and diet and exercise in prison.
The Norfolk and Norwich PFI hospital is an astonishing example of Government miscalculation, perhaps even negligence. Indeed, the Chairman described it when opening the debate as taking the public sector for a ride. The Committee covered the refinancing of the Norfolk and Norwich PFI hospital in its 35th report in the last Session.
The right hon. Member for Swansea, West mentioned the role of individual Members of Parliament in using the NAO to flag up issues that it evaluates and then pursues, if it sees fit, through inquiry. The NAO’s investigation of the scandal that I am considering was in response, at least in part—a significant part—to referral by my hon. Friend the Member for North Norfolk (Norman Lamb) who, with others, rightly drew the matter to public attention.
In 1998, Norfolk and Norwich University Hospital NHS Trust let one of the first PFI contracts to a private sector consortium, Octagon. As one of the first examples of a PFI scheme, Norfolk and Norwich was something of a guinea pig. The trust might, therefore, reasonably have expected to experience the teething problems that are normally associated with new initiatives. However, it could not have expected that, in 2003—a mere two years after the completion of the hospital—Octagon would refinance the project, tripling the rate of return for its investors from 19 per cent. to a staggering 60 per cent. On the other hand, the Department of Health appears to have expected that to happen. In its response to the report, it states that the
“potential for gains from a refinancing were recognised prior to the contract being signed”.
Indeed, it goes on to state that the policy at the time was not seek a share for the public sector partner
“while the market was still so volatile”.
The Department did not want profit sharing in case it scared off potential investors. It feels as though the intention in trying to secure the implementation of this change in public policy and the financing of major capital undertakings was an attempt to grease the wheels to get the policy off the ground.
I agree with the hon. Gentleman’s last comment about greasing the wheels. Does he agree that one of the most astonishing aspects of the refinancing of the Norfolk and Norwich hospital—which is on the borders of my constituency and which many of my constituents use—was that, at the time of the refinancing, the main contractor, Octagon, ladled on to the contract an extra £106 million of debt? This was not done in order to build an extra ward or the cardiac unit that Norfolk badly needs; it was done solely for the purpose of accelerating Octagon’s rate of return, thereby enabling it to get most of its profit up front without having to go through the bother of running the contract for the subsequent 33 years. What does the hon. Gentleman think that says about the likelihood of Octagon’s running that contract effectively, efficiently and in the interests of the people of Norfolk, when it has already had its profit out of it?
It says that the Public Accounts Committee and the National Audit Office will be spending many years to come looking at these issues and their impact on the public purse, and at the burden that they will place on the taxpayer. It also says something about profiteering, which was certainly a hallmark of the early pathfinders in respect of PFI.
In addition to the obvious short-sightedness involved in all this, such attitudes shows scant regard for the risks that were being faced by the public sector in these situations, not least in regard to the increasing emphasis in public health policy on being flexible and moving more services into the community. PFI locks NHS organisations into models and structures of care for many years while they are paying the debt costs involved.
The trust secured the right to receive less than one third of the total gain from refinancing—just £34 million of the £116 million gained. In exchange for that, the minimum period of the PFI contract was increased by five years, and the trust faced having to pay up to £257 million more, in the event of early termination, than originally agreed. I really must question what kind of a deal that was. While Octagon walks away with the lion’s share of the cash, the trust has been left to shoulder the burden of debt. This smacks of the worst kind of profiteering, and the fact that it was Government sanctioned is a disgrace. I am assured by my hon. Friend the Member for North Norfolk that the impact on the Norfolk health economy has been severe, and that the PCT now faces a £47 million deficit. No account has been taken of this in the Government’s drive to balance the books in the NHS, yet it is a direct consequence of Government policy that the local NHS in Norfolk finds itself in this position.
Some lessons have been learned. PFI contracts are now expected to include provision for the profits from refinancing to be shared equally between public and private sector partners. However, there are still grounds for concern. Does the NHS have the ability, or the Department of Health the will, to prevent such profiteering from happening again? If the Government are to avoid a repeat, NHS staff must be appropriately trained, supported and instructed in how to conclude deals of this kind. The Department of Health, in response to the Committee’s recommendations, agrees with this proposition. It speaks of the need for staff to refer to the code of conduct and the application note, and to consult the refinancing taskforce. Codes, notes and taskforces are all very reassuring, but the Department goes on to say that staff in the trust
“commissioned experienced advisers to assist them in reviewing the private sector’s proposals, including the value for money of the refinancing”.
This leaves a simple question: if Norfolk and Norwich had assistance from experienced advisers, how did it end up agreeing to this deal? And if other trusts have only the benefit of this kind of assistance to rely on, how can we be sure that they, too, will not find themselves involved in such refinancing fiascos? The report acknowledges that the lot of public sector partners in PFI deals has improved as a result of what happened in Norfolk. Yet the adequacy of training and support for staff involved in these deals is still in question. The Department, and the Government as a whole, must ensure that these matters are addressed, if the taxpayer is not to be ripped off in future.
I would like to turn to the issue of urban green space, an issue that was addressed by the Committee in its 58th report of the last Session. I represent a constituency on the outskirts of London, and this is an issue of real concern there. I have seen for myself the passions that a threat to treasured open space can provoke in my constituents. Surrey county council recently sought to grab control of the management of Nonsuch park, which is adjacent to my constituency. Since its joint acquisition in the 1930s by the Sutton and Epsom borough councils and the Surrey and London county councils, the park has been managed and paid for jointly by Sutton and Epsom. For 70 years, Surrey has taken no interest in it and made no contribution towards the running costs.
Then, out of the blue, and without consulting residents, park users, local councillors—anyone, really—Surrey county council announced its intention to draw up plans for the park, including disposing of an historic house. A public outcry, the largest public demonstration that Surrey county councillors had seen in years, and a compelling legal and moral case forced a rethink. The sell-off plans have been dropped, but the unilateral action continues, and concern remains about Surrey’s intentions.
I refer to this local example because the report on urban green spaces highlights the importance of public engagement—something that had been lacking in the case of Nonsuch park. The Committee’s report draws some interesting and alarming conclusions. In one in six of the areas assessed in the report, the quality of open space is declining. Sixty-five per cent. of authorities have not completed an audit of current green space provision, and 70 per cent. have made no assessment of future needs. Two thirds of authorities have not considered the needs of children and teenagers—a key demographic when considering planning green space and, indeed, when tackling issues such as antisocial behaviour and obesity.
The report makes it clear that more must be done to target resources at the areas in most need. It also makes the point that the areas of greatest deprivation need green space the most, yet they often lack such facilities. There is a black hole in terms of provision and needs assessment. Planning policy guidance note 17 requires local authorities to plan for open space by undertaking assessments of both community need and current provision. However, the report found that, four years after the guidance was introduced, one in three urban authorities had not yet started to assess need, and one in five had yet to begin to audit current provision. Given that £700 million of public money went into green space provision in 2004-05, this lack of robust assessment should be a cause for concern.
As I have already said, the involvement of local people in decisions about the provision of green space is crucial. Yet the report found that the needs of one group— children and young people—are
“seldom well reflected in councils’ green space priorities”.
The fact that the needs of this vital group are not even being addressed, let alone met, highlights a serious failure to engage. As the right hon. Member for Swansea, West has already pointed out, another recent Committee report, on childhood obesity, shows that the rate of obesity among children aged between two and 10 has risen from 9.9 per cent. 12 years ago to 13.4 per cent. in 2004. Save the Children, in two reports on “Child Wellbeing in the UK”, identified the overall decline in the amount of available play space and freedom to play between 2002 and 2005 as a key concern. The Committee report speaks to that concern and demands more action. The decline of available play space and the increase in childhood obesity are far from coincidental. In the war against childhood obesity, urban green space is a key battleground, yet the one group whose needs are not adequately addressed are young people.
The report makes it clear that Government investment in green space provision has helped to halt the decline in the quality and quantity of urban green space. However, much of that money is being wasted because of inadequate targeting, planning and engagement with key groups. It is good to see that the Department responsible for these matters accepts those findings, but it will be a critical test to see whether it will translate that into action. It is critical to the health and well-being of local communities that the Government now act.
Finally, I would like to turn to diet and exercise in prisons, which was addressed in the Committee’s 56th report of the last Session and in a previous report in 1998. The question of diet and exercise in prisons is important, not simply because of our duty of care for those in prison, but because of the clear link between nutrition and behaviour. In 1997, a study was carried out on 231 prisoners at Aylesbury young offenders institution. It showed a statistically significant link between a nutritious diet for prisoners and a reduction in antisocial behaviour in prison. The study is now 10 years old, yet the Committee found that the Prison Service had not acted on the findings of the research. It was felt by the Prison Service that further research was needed, but no such research has yet been undertaken. A clear evidence base has been in existence for 10 years, yet nothing has been done. The Prison Service response to those findings is, to say the least, rather vague. It speaks of efforts that are being made to commission further research and bemoans the “complex and expensive nature” of the research. Unfortunately, that is far from the only example of the service’s failure to act on the Committee’s recommendations. Two other key recommendations made in its 1998 report have not yet been met by an alarmingly high number of prisons.
In 1998, the Committee recommended that meals should be served within 45 minutes of cooking. Yet in 2006, 37 per cent.—more than a third—of the prisons visited by the National Audit Office failed to meet that recommendation.
On prison behaviour and diet, did the hon. Gentleman notice in one of the appendices of the report the analysis of the number of prisons in the United Kingdom where porridge is available to prisoners? It became obvious that porridge is not available in a significant number of prisons despite the fact that it is well known not only to reduce cholesterol but to have various other life-giving properties, including the ability to help the body to produce serotonin, which lifts the spirits and reduces the appetite. Does he agree that all prisoners in the United Kingdom should have daily access, if they wish, to porridge?
I could not but agree. Indeed, all hon. Members have access to porridge in the Members Dining Room every breakfast time. It is unfortunate that prisoners cannot avail themselves of that health-benefiting food and do their porridge in that way. Those comments reflect the work of research done in 1997 which shows clear links between behaviour and nutrition. That is why I wanted to draw the report to the attention of the House and the Minister.
Another aspect of the recommendations from the 1998 report was that prisoners should not wait more than 14 hours between meals. Yet in 2006, half of all prisons failed to meet that recommendation. Once again, the Prison Service’s responses are poor to say the least. On the question of the waiting time between cooking and serving, it said:
“The Prison Service will continue to aim to meet this recommendation”—
hardly a real commitment to change. On the question of the time between different meals, it said that it “accepts the conclusion” but that “fully implementing the recommendation” would be “highly expensive”—hardly a resounding admission of change on the way.
We have had three recommendations from the Committee on prisons and nutrition; three failures to act by the Prison Service; and three responses that demonstrate a lack of respect for the Committee by the Prison Service. My fear is that in a further 10 years or so another piece of research or another report by the Committee will find that those things still have not been acted on. For me, this is not about being nice to prisoners—it is not about giving porridge to them because it is a nice thing to do. It is about helping to reverse the cycle of violence in our prisons—violence and disruption that undermine their ability to rehabilitate offenders and cut re-offending rates.
The three reports may seem unconnected, but I believe that they tell a bit of a story: a story of Government who have a desire to jump into bed with the private sector at the cost of waiving crucial protections for taxpayers’ money; a story of a Government whose desire has led them to pour money into urban green spaces without targeting, planning or regulating their expenditure; and a story of a Government who are happy to allow a public body—the Prison Service—run with public money to ignore the recommendations of an important Committee of this House for 10 years. Taxpayers deserve better.
It is a great please to take part in the debate, as indeed it is a great pleasure to serve on the Public Accounts Committee under the chairmanship of the hon. Member for Gainsborough (Mr. Leigh), who fulfils his role not just with great energy, but with great good humour. I shall begin by addressing thematic points that are illustrated by several of the reports and then consider two or three reports on which we have played a fruitful and productive role in improving public services.
My first point comes back to the original purpose for which the Committee was set up, which is to ensure that public money is properly used and that propriety is followed at all times. Two reports that we considered in the past 18 months demonstrate that it is still necessary to focus on that. The first was the 46th report, “Governance issues in the Department of Enterprise, Trade and Investment” in Northern Ireland. It tells a bizarre and complex story, which I cannot possibly repeat, of a number of inappropriate relationships and a failure of the Government Department overseeing that body to ensure that there were no serious improprieties. The second report, “The joint venture between Dr. Foster and the Department of Health”, was considered more recently. In that case, taxpayers’ money was used to inject equity without a clear rationale or open competition. In both cases, family connections and a mediaeval approach to public money had taken hold. That is totally unacceptable. It is a very good thing that the NAO delved into those labyrinthine problems and that we can speak out on that important issue.
My second point—which should be fairly straightforward to deal with, but clearly is not—is the simple issue of significant cost overruns. There are two recent examples of that. One is the road building programme, where there seems to be a systemic failure, with continuous increases in the region of 25 to 30 per cent., which is significant on a large capital programme. The other example, obviously, is the Olympics. The cost at the time of the initial bid was £3 billion; the latest estimate is £10.6 billion. When we took evidence, there was a great deal of confusion about what items of expenditure on the Olympics would be part of the legacy and what would be part of the two-week sporting event itself. Even taking account of the legacy, it was not clear that there would be value for money. For example, the officials said that there would be 4,000 homes, but there could have been 100,000 homes for the amount of money that is being spent. Altogether, it is a most unsatisfactory episode.
One of the things that concerned me was the attitude of the officials. I felt that once they move into something in which the numbers are very large, they begin to lose sight of the principles at stake and to be ignorant of the issues at stake. I asked whether they knew and were satisfied with the cost of the temporary structures. They immediately realised that I would draw an analogy between those and Henry VIII’s field of the cloth of gold, but they did not know that they were spending $240 million. The culture of irresponsibility should be looked at systematically.
We need to consider two things to shift people’s attitude and behaviour: the skill level and accountability. The British civil service has a number of important strengths, but delivery, practical implementation and management capacity do not generally rank among the greatest of them. Many of us have a feeling that there is not a high price for failure in terms of practical implementation and that there is an insensitivity to management realities and time scales. Obviously, the skills needed vary from Department to Department. The Foreign Office and Treasury are largely policy oriented, so a policy approach is perfectly sensible and effective. In the case of the Treasury, its delivery has been largely hived off to the Inland Revenue and the Bank of England. However, in many Departments delivery is the essential business of the Department. Policy is about delivery.
Over the past 40 years, numerous attempts have been made to broaden the practical experience of senior civil servants. Generally they have not succeeded, for a very good reason: the world is too complex. When we expect people to know about giving policy advice to Ministers, being sensitive to political realities, and drafting legislation and steering it through the House, and also to know how to run large bureaucracies, we are expecting them to be good at two completely separate jobs. We need to get away from the idea that civil servants can be superbly gifted in every field. We can run a system of government on the basis of a cadre of able, intelligent, committed people, but we cannot run it on the basis of exceptionalism.
It is interesting to note the instances when things seem to have worked well. When the Committee took evidence, I was struck by what had been achieved when vital technical skills were imported from specialist professions. There have been two success stories. The seventh report of the Session 2006–07, “Department for Work and Pensions: Using leaflets to communicate with the public about services and entitlements”, might appear obscure, but it has a very interesting background. The Department took a broader look at its problems and, having encountered considerable difficulty in organising information on benefit entitlements, recruited a logistics expert from the Canadian army whose previous job had been directing United Nations operations in Sarajevo. There was a person who really could crack the problem. We recently produced a report on national health service food procurement, in which there had been numerous inefficiencies. The Department of Health had recruited someone from the financial sector, who had also had a significant impact.
Departments need to build up skills within the civil service and the public sector. We recently considered their use of consultants, which was not a particularly happy experience. We concluded that although expertise was being brought in, we were not achieving very good value for money.
I think that all the Committee’s members have been probing the issue of whether particular groups working in the public sector should be paid significantly more than other mainstream civil servants. It is clearly a tricky issue for the Chief Secretary, because we do not want public sector pay to go rip-roaring off. Medical consultants are an example of that. A report published only yesterday shows that sometimes we are too generous. However, in other instances, because we underpay staff in the public sector, we buy in services from the private sector. That means paying not just for the people providing the services, but for profit margins, marketing and so forth, so that the whole exercise becomes much more expensive. It is quite pleasing that both the Office of Government Commerce and the Shareholder Executive, whose representatives we met recently, have said that they want to build up groups with, in particular, financial expertise to solve that problem.
As I said earlier, I believe that accountability matters. On a number of occasions, weaknesses in accountability have led to overspends, inefficiencies and poor value for money. Obviously, there will be a problem if there is a long chain of command in a large organisation, but it strikes me as a basic, simple principle that in the public sector accountability should be to the public, either in their role as users of services or in their role as citizens. All chains of accountability should flow to them. However, we have seen too many instances when things do not work in that way.
When we examined NHS deficits, the National Audit Office produced an amazing spaghetti junction-type diagram. The most alarming information was that foundation hospitals are accountable to Parliament. When I asked the officials how that was to be effected, they said “Through you”. That filled me, at least, with horror, because I did not believe that we were capable of fulfilling such a role in respect of all the foundation hospitals in the country. The idea that the buck could stop with us in any systematic way struck me as rather unrealistic.
For the fifth report of the Session 2006-07 we looked at a regulatory body, Postcomm. Under the structure that had been established, the industry would report to the regulator, who would then report to us. One of the problems that struck me as we took evidence was that Postcomm was not very sensitive to the needs of post users. It had not taken adequate account of the costs of lost or late mail, or of the needs of rural areas. Having decided on a strategy and introduced the market, it then proposed to consult the public. Again, we saw a weakness in the chain of accountability.
A third example, mentioned by the hon. Member for Gainsborough, is the Rural Payments Agency, which failed to pay farmers their entitlements. The chief executive has been relieved of his position and there have been some ministerial changes, but we are bound to ask whether that was a reasonable response to the circumstances. Did responsibility for those failings lie at ministerial or official level? There is a case for saying that the English system was too complex in comparison with the Scottish and Welsh system and that the policy design fault lies with Ministers, but it is clear that there was also considerable incompetence at civil service level.
Ministers cannot be expected to line-manage their staff in such detail. It is perfectly reasonable for Ministers arriving at a Department to assume that, by and large, the Department can either tell them that something is not possible, or deliver what it says is possible. If there is not that relationship between Ministers and officials, Ministers lack the levers that they need in order to implement policy. We need to strengthen ministerial control. In the name of neutrality, Ministers have been left with no leverage. For example, a Minister cannot ask a permanent secretary to leave if the relationship between them breaks down. That would not be tolerated in any part of the private sector. The chief executive of BP, for instance, was recently asked to leave by the chairman because the relationship was not functioning adequately.
Another possibility is that we simply rely on professional standards. I am sorry that that my hon. Friend the Member for Great Grimsby (Mr. Mitchell) is not present, because he alerted us to the different patterns in different parts of the public sector. If we assume that professionals are able to distinguish their personal interest from the public interest, we can use professional standards as a form of accountability. The report, “Progress in implementing clinical governance in primary care” found that the Department of Health used that system. There is no inspection of the doctors; their professionalism is relied on. We found that the standards of governance were directly related to the quality of patient experience, albeit more work needs to be done to improve both of them. That is in stark contrast to the situation in schools. We produced a controversial report, “Poorly performing schools”—the 59th report of the 2005-06 Session. Interestingly, the evidence was largely gleaned not by the National Audit Office but by Ofsted, the regulator. There is a completely different system of accountability in respect of schools.
To summarise, I suggest that good policy delivery requires having the right skills in place, strengthening public accountability—partly through democratic structures and for citizens as well as consumers—and relying on both professional standards and independent inspection and regulation.
I want to give some examples of where I think that the NAO and the Committee have helped to improve services and service delivery. The hon. Member for Gainsborough mentioned the inquiry into reducing brain damage by addressing stroke care—the 52nd report of the 2005-06 Session. That is a serious problem: it is the third biggest cause of death, and there are huge costs to the individual and the economy. Early action has a significant impact on outcomes. I was interested in the report as this is a significant health problem in County Durham, because of the health overhang from the heavy industrial work many people there did in the past and because of lifestyle. In my local hospital—Bishop Auckland general hospital—there is an excellent centre led by the consultant, Mr. Mehrzad. Last December, the local patient and public involvement forum held a one-day conference on stroke facilities in the area and stroke care. It brought together patients and practitioners and it used the PAC report as a basis. We now know that the Department of Health is taking this matter seriously and that they will prepare a proper strategy that will be produced later this year.
Like my right hon. Friend the Member for Swansea, West (Mr. Williams), I was interested in the eighth report on tackling childhood obesity. Again, there was a delivery chain that looked like spaghetti junction; 27 agencies were involved in that process. We took evidence from three Departments: the Department for Education and Skills, the Department of Health and the Department for Culture, Media and Sport. The Department of Health has huge NHS costs that are projected to rise significantly, but in the DCMS and DFES this matter is not a priority, yet they are the Departments that have the policy levers. There has been a certain dilatoriness in respect of how the policy has been pursued. When we took evidence in May last year, the DFES permanent secretary was unaware that the extra money that it had provided was inadequate to equip school kitchens. Since then, great progress has been made. The School Food Trust under Prue Leith is tackling the problem.
There is a similar problem in the DCMS. My right hon. Friend the Member for Swansea, West talked in detail about the proposed controls on television advertising which Ofcom will produce. Action was originally promised in 2004, and we were told that if voluntary action was not achieved by 2007 we would have legislation. That timetable has now been pushed back to 2008. It is becoming increasingly unlikely that the 2010 target will be achieved. In an interesting intervention, Stephen Carter—the previous head of Ofcom—wrote an article in the Financial Times in which he straightforwardly admitted that it was not his first concern to regulate the broadcasting industry in the interests of public health. He said that if that is what Parliament wants, it should set things up differently. He said that his first concern was the broadcasting industry and its health. We need to think more clearly about how cross-departmental efficiency is to be achieved. Members might wish to take a look at early-day motion 404 on controls on television food advertising to children and join with the 211 other colleagues who have agreed that they need toughening up; I commend doing so.
If we are to be successful in fighting childhood obesity, we also need to look at non-broadcast promotions. Yet another structure has been set up to deal with that. The Committee of Advertising Practice looks at matters such as texting, posters and press advertisements. Which? has described the code that the CAP has produced as “woefully inadequate” and as
“vague and open to interpretation.”
It wants there to be consistency between the non-broadcast code and the broadcast code, proper Food Standards Agency nutrient profiling and an approach that covers the whole under-16 age group.
With another hat on, the DCMS is promoting sport and children’s play as a solution to the problem. We have examined the Olympics. New evidence has come out suggesting that if we wanted to maximise the participation of children and young people in sport, it is highly unlikely that we would go about that by spending £10 billion on the Olympics. However, the DCMS was pleased to tell us of the £155 million that the national lottery is putting into children’s play, and that is a positive new development. If Members want to ensure that the money for children’s play is not siphoned off to the Olympics, as might also be threatened in respect of some other lottery moneys, they might like to attend the meeting of the all-party group on play next month, at which we will meet the lottery to discuss this issue.
As the hon. Member for Sutton and Cheam (Mr. Burstow) said, this matter is also related to the 58th report, “Enhancing urban green space”. I take issue with one aspect of his remarks. I think that the story in this respect is basically a success story, as more than 90 per cent. of urban authorities have satisfaction levels of 60 per cent. However, he is right in that when we probed the Department for Communities and Local Government on the situation in respect of children, we found that their needs were not well understood. We found that two thirds of local authorities had not considered the needs of children and young people. The official who appeared before us used a wonderful expression—he said that thought was being given to consolidating parks and urban green spaces. He did not mean that they would be consolidated, of course, because how can anyone consolidate something that is two miles away from something else? What he meant by that was that lots of money will be spent on some of them to make them really nice and that builders will be allowed to have the others.
That is of relevance to what my right hon. Friend the Member for Holborn and St. Pancras (Frank Dobson) found when he conducted a review of children’s play, which is that what children really want is things that are local to them and that they can easily access so that they can go to them independently without their mums or dads. In that connection, we looked at interesting maps for antisocial behaviour. Again, it is a shame that my hon. Friend the Member for Great Grimsby is not here, because he pointed out the striking contrast between Hull and Grimsby. The level of antisocial behaviour is much higher in Grimsby than in Hull, and he did not know why as both areas are very similar, sociologically. However, I can tell the House that Hull city council runs a very good play programme. It would be interesting if the NAO looked more widely, initially in London, to determine whether there are similar correlations around the country.
I do not want to take up more than my fair share of time, so I shall conclude by saying something about the work that we did on the NAO report entitled “Gaining and Retaining a Job”, which focused on the support for disabled people provided by the Department for Work and Pensions. The original report compared the broad range of schemes run by the DWP with the Remploy factory network. The Remploy factories fared extremely badly in the comparison. I was interested in that as I have a Remploy factory in Spennymoor in my constituency. I have talked to the people who work there, and I know that they value the factory very much. The NAO review found that £330 million is spent on getting disabled people back into work, of which £120 million goes to subsidising the Remploy factory. However, only 9,000 people work in those factories, compared with the 120,000 to 150,000 who access other schemes.
At first blush, the Remploy factories seem to be 10 times more expensive than the other schemes, but two things became clear when we looked into the matter in more detail. First, we discovered that we were not comparing like with like. The Remploy factories get a full subsidy so that they can offer permanent jobs, whereas the other schemes offer small interventions with the aim of trying to help someone to find a job. Although it is possible that the job might be permanent, it is far more likely to be the sort of short-term employment that people with disabilities do not value nearly so much.
Secondly, we were able to get to the bottom of the management costs problem that had aroused much conflict. The trade unions believed that the main problem was that management was wildly inflated, and that no other changes would be needed if that problem could be cracked. In contrast, management adopted a very defensive position. Our report was able to uncover some of the relevant facts. The House will know that there have been many changes in Remploy as a result of a ministerial review. This afternoon, the trade unions will publish a strategy document compiled by the accountants Grant Thornton. As I understand it, the strategy will enable most of the factories to stay open and to remain within the financial envelope that Ministers, quite reasonably, have set.
That is an example of how the work done by the PAC, in respect of a very serious matter, has increased the level of facts available and reduced the amount of conflict. The PAC is sometimes critical of organisations or of how public funds are used, but I hope that the examples that I have given of how we have acted constructively demonstrate that the Committee is not against the public sector. We do not look at public sector organisations and say, “They’ve messed everything up. It’s clear they can’t manage anything and everything has to go to the private sector.” The examples of how we have improved public sector efficiency demonstrate that it is possible to deliver better public service for all citizens.
It is a pleasure to follow the hon. Member for Bishop Auckland (Helen Goodman), and I should like to start by agreeing with her about the importance of accountability. She also mentioned the possibility of paying some civil servants more, something that Partnerships UK has shown can be done. The Shareholder Executive to which she referred is looking into the possibility of doing the same and, although whether what has been done with the director general of the NHS IT service produced value for money is still open to question, it is true that civil servants can be paid more, and sometimes should be.
The hon. Lady was also right to say that the PAC must make sure that we are not regarded as being against the public sector just for the sake of it. There are some very good examples of good work being done in the public sector, and perhaps we could do a little more to make that clear. However, the PAC deals with public accounts, and that means that we must look at the accounts of public bodies. When things go wrong, the people in charge—the accounting officers—should expect to be accountable.
The PAC’s Chairman, my hon. Friend the Member for Gainsborough (Mr. Leigh), earlier called me an anorak, and I have decided to try to rise to the challenge and prove him right. To that end, I can tell the House that the Comptroller and Auditor General has qualified 22 accounts including the armed forces pension scheme, the Assets Recovery Agency, the Department for Work and Pensions—which has had its accounts qualified since 1988—the House of Commons Members’ account, the NHS pension scheme, the NHS compensation for early retirement scheme, the Revenue and Customs prosecution office, and the Home Office.
In addition, a further 15 non-resource accounts are also qualified. They are Energywatch, the Ordnance Survey, the Marine Fisheries Agency, the Council for Healthcare Regulatory Excellence, the Nuclear Decommissioning Authority, the HMRC’s trust statement—which is a mere £1 billion or so adrift because of tax credits—the Civil Nuclear Police Authority, the social fund, the Child Support Agency client funds account, the NHS Pensions Agency administration account, the Northern Ireland national insurance fund, the British Transport Police, the Public Health Laboratory Service board, NHS Direct and the Health Professions Council.
I have read out the names of all those accounts to make sure that they are on the record. I believe that every one of the accounting officers involved should, as a matter of complete routine, be required to report to our Committee to explain why their accounts were qualified. Their job is to be the legal guardian of public funds voted to them by Parliament, and to account legally for how that money is spent. If, by marking the accounts as qualified in some way, the CAG is telling us that he is not able, in certain respects, to form an accurate opinion of how the moneys have been spent, the PAC ought to know about it. We ought to know why he has qualified the accounts, and we ought to discuss the matter with the accounting officers concerned. In many cases, of course, we do know those things. The HMRC chairman is a regular customer of ours. His accounts have been qualified in the past three or four years because of tax credits, but that is a relatively new development. However, I think that we ought to establish, as a routine principle, that accounting officers come before us when accounts are qualified.
The Chairman of the PAC mentioned the Home Office, whose accounts are qualified this year. They were disclaimed last year, and one member of the Committee asked Sir John Bourn what that meant. He replied that a disclaimer signified that he had no information at all with which to form any opinion whatsoever. My hon. Friend was right to mention that the Adelphi accounting system showed the Home Office accounts to have £27.527 trillion. In the Home Office’s defence, I point out that there was £27 trillion in both the credit and debit columns, but the total is 2,000 times the size of the Home Office’s actual turnover—and 1.5 times the gross domestic product of the entire planet. The Australian auditor who had been put in charge of the account inserted a rather blunt note to the Home Office audit committee to the effect that there might be something awry. The figures suggest that he might have been right.
My first point, then, is that I believe that all such matters should be referred to the PAC as a matter of routine because accountability is so important. My second point has to do with gateway reviews. That matter is a hardy perennial, and in the past the Financial Secretary has made speeches explaining why gateway reviews cannot be more public. I heard his predecessor—who is now the Secretary of State for Communities and Local Government—use exactly the same wording, and people who scrutinise the trade press will know that the Secretary of State for Work and Pensions has used it too. It is clear that someone in Whitehall knows how to do copy and paste, but that does not alter the fact that not holding gateways in public has a deleterious effect.
Several colleagues have mentioned the Rural Payments Agency. Extracts from the gateway reviews are published in the back of the report into the episode involving the RPA, which was in many ways disgraceful. That means that they are available now, although they were not at the time. After a rosy start in March 2001 where the
“report concluded that the proposed change programme has strong stakeholder support and a focused and energetic management team”,
three years later by May 2004, the gateway review, now marked as red, stated:
“This is a complex Programme requiring fundamental change in the way the Agency operates. In respect of releases 1a and 1b, although testing has been delayed the process is under good control, the problems are understood and we believe that delivery will be successfully achieved in the coming weeks.”
Again and again one of the key points is testing being delayed or compressed, and it was testing being compressed to a point where it was inadequate which was one of the big problems in relation to tax credits. The review went on:
“In respect of releases 2 and 3, the combination of the timescale left, the number of serious risks identified and the fact that the final policy decisions will not be made until July, with the system well into design and build, result in a critical situation that will require urgent action.”
They were designing and building a system although they did not know yet what the policy was, which takes us back to what the hon. Member for Bishop Auckland said earlier.
Some seven or eight months later, in January 2005, the gateway review, still at red, found the review team under strong leadership but said that
“there is no room for further change requests, which would lead the programme into serious difficulties and overload the operation of the Agency.”
Six months after that, in June 2005, still at red, the review said:
“The programme is in considerable difficulties.”
Anybody with a farming constituency could have told the team that. The review continued:
“The Agency have sought to keep to the February timescale, but the risks of failing have continued to increase. The team were concerned that there is not a finalised and secured contingency plan, nor clarity about when it could be invoked.”
There was still a further nine months before the chief executive was removed from office.
In May 2006, some two years after the first red review, the next red review said:
“The computer system performed well technically but the business processes required to use it, in order to make full payments in the early part of the payment window, were not fit for purpose.”
When read twice that seems to contradict itself. It basically says that the computer system performed well but was not fit for purpose or that the processes required to use it were not fit for purpose. That is the sort of double Dutch with which the public, farmers and Parliament are confronted. The conclusion, as if we did not know it, was:
“The Agency is now in crisis management.”
My point from all that is that had everything been more widely discussed and publicised earlier, something might have been done earlier. The Financial Secretary might say that I do not understand, as if the gateway review had been public, these things would not have come out. The point is that we were all able to tell from our own experiences at the rock face that things were badly wrong, yet the process by which things were put right was extremely slow.
Although several hon. Members including our esteemed Chairman have referred to the Rural Payments Agency, everything that I have just said is outside the terms of this motion because we have not yet had a reply from the Treasury in the form of a minute. In future we should change the wording of our motion slightly because we are unduly hidebound. I refer to the Rural Payments Agency, the Olympic games, NHS IT and the Dr. Foster NHS information services, to which the hon. Member for Bishop Auckland referred. All four are important and of central concern to the Committee, but all are outside the terms of this motion.
We tend to rely on our esteemed Speaker or one of his deputies being not au fait with the anorak work that we do to such a degree that on any particular interstice or minutiae he or she cannot say whether something is within the terms of the motion. It is unfortunate that we should have to rely on that, as I found to my cost when I was trying to place on the record some points about NHS IT last July only to find that the Speaker had noted that they were outside the terms of the motion. I brought my remarks to a slightly more rapid conclusion than I had proposed.
Choose and book, the doctors’ appointment system, on which the NAO did a report to which we have replied, and which has been the subject of a Treasury minute, accounts for a small proportion of the total national programme for IT in the health service. Although NHS IT is costing, depending on whom one believes, at least £12 billion—if one believes the NAO—and although it was thought of in February 2002, the contracts were being let from autumn 2003 and here we are in the spring of 2007, it has yet to be discussed properly in a debate in Parliament. Earlier this week we issued a report saying that there is a significant danger that the clinical benefits will not be achieved by the end of the contract period. Our motion should be amended to take account in particular of the reports to which the Treasury has issued a minute in response and, more generally, to take account of the work of the PAC and the NAO. We unnecessarily hamstring ourselves if we cannot talk about matters such as NHS IT and the Olympic games.
A very good article appeared in The Daily Telegraph on Tuesday on that subject and I shall make it available to the Minister. I can probably be forgiven for saying that I thought it was a very good article because I wrote it myself. [Laughter.] It is certainly worth his attention and I shall make sure he gets a copy.
Finally, since I know that two other Members wish to speak, I want to talk about the efficiency programme. I am pleased to say that it is certainly within the terms of the motion. The NAO produced a review of the efficiency programme, on which we took evidence and on which the Treasury has issued its minute. In the original NAO report a chart showed the overall likelihood of delivery against the Gershon savings and said that although significant chunks of the programme were good, requiring only refinement, some were mixed with some aspects requiring substantial attention and some were problematic requiring urgent attention, a small percentage required urgent and decisive action and were “highly problematic”. In December 2004 that amounted to 3 per cent. of the programme, but by December 2005 that had increased by a third to 4 per cent. When I asked the then chief executive of the Office of Government Commerce which Departments were being referred to, his reply was, “I can’t tell you that. That’s advice to the Prime Minister.”
Earlier this year we had an interesting seminar with the Chief Secretary and chief executive of the Office of Government Commerce, to which a number of members and former members of the PAC came. I showed the Chief Secretary a chart which I got from the Office of Management and Budget website. When the Committee visited the United States last summer we had the opportunity to meet Clay Johnson, the deputy director in charge of management inside the federal Government. They have a different approach. Their score card is completely public and can be downloaded from the website. Not only do they say which Departments are responsible for which particular scores, but some Departments, for example the US Department of Justice, put their traffic light scores in the lobby of the Department so that all employees can find out where they stand. We could learn a great deal from their much more open approach.
Last summer I spoke at a conference at the French Ministry of Finance. One of the other speakers was Barry Anderson, a senior official at the Organisation for Economic Co-operation and Development. He used five words which are apposite. He said:
“Sunshine is the best disinfectant.”
We understand what we are here to do, which is to scrutinise public money—money paid in taxes by constituents to the Government for public purposes—and to discharge a trust. That trust can be better discharged if there is greater openness and transparency. I hope that the Treasury will take that on board because there is still some way to go.
One of the problems when one is the seventh speaker in a debate is that almost everything that can be said has been said, so I apologise if some of my remarks are a repetition of some of the excellent points made by previous speakers.
One of the biggest advantages of the peace dividend in Northern Ireland is that we in the PAC have now examined the last ever Northern Ireland departmental report. That is a source of joy and pleasure for me, as I am sure it is for other members of the Committee.
First I pay tribute to the Comptroller and Auditor General, Sir John Bourn, who showed tremendous enthusiasm and a remarkably dry sense of humour in his use of words such as “disclaim” before the PAC, and to all those at the NAO who do such a tremendous job. I also pay tribute to Mark Etherton, the Clerk of the Committee, and other of his colleagues for their work in servicing the PAC. I pay tribute, too, to the witnesses. Those permanent secretaries who come to the Committee who are open and straight, and get to the point, make far better witnesses, even when they are concealing mistakes, than those who dither, beat about the bush and waffle.
A wry smile crossed my face when my hon. Friend the Member for Bishop Auckland (Helen Goodman) mentioned the good humour of the Chairman. I suspect that the good humour is shared only by those of us who sit around the table rather than those who sit behind the desk. I pay tribute to the Chairman. The way in which he conducts the meeting is remarkable. He is non-partisan; the Committee is non-partisan. Only one thing disappoints me, and I made this point last time. I understand the reasons, of course, but sometimes when the media pick up on the excellent work of the PAC it appears to the lay public that we are being critical of Government policy. I am sorry that the hon. Member for Sutton and Cheam (Mr. Burstow) is not in his place now. Towards the end of his speech, he was being political. I was disappointed; it shows that he does not understand the PAC culture when we talk about government inefficiencies and the things that we can do to make government more efficient.
I also smiled at the reference to the hon. Member for South Norfolk (Mr. Bacon) as an anorak. There is a rumour circulating that the reason the anti-stalking and harassment legislation was introduced is the forensic skill that he demonstrates both on the Committee and outside it when he chases up the written questions that he has asked and the memos that he has sent. The Chairman of the Committee referred in passing to the fact that the PAC’s constitution requires a Chairman to step down after two terms. It also requires the Chairman to be a member of Her Majesty’s official Opposition. I look forward to the hon. Member for South Norfolk being the Chairman after the next general election.
One of my concerns is the fact that when it comes to public discourse on our work the PAC appears only to be critical of the work of Departments and permanent secretaries. The reality is that we often commend innovative work by Departments. A recent example is biometric passports; an innovation led to a project being completed not only on time but under budget.
When we have an unprecedented level of public investment, it is clear that after 10 years there will be significant inefficiencies. We must not forget that we have helped to uncover some inefficiencies and that that has led to savings. I believe that, because there has been so much public investment, there is a duty on those of us who voted in favour of it to scrutinise it and ensure that every pound is spent properly and we have proper value for money and maximum potential for saving.
I want to talk about two PAC reports. The first deals with the National Offender Management Service. My interest in NOMS stems from the fact that Wandsworth prison is in my constituency. One of the matters that we looked at is the increased numbers in custody, which has a direct bearing on the ability of Wandsworth prison and its excellent governor Ian Mulholland to do as good a job as possible in rehabilitating those who are guests of Her Majesty’s prisons.
The report examined the challenge of accommodating record numbers of prisoners and the action taken to do so. It considered the impact on education and other training of prisoners. It is worth thinking about the context of our report. One of the frustrations that all members of the PAC share is the time lags between the National Audit Office doing its work, the report being agreed by the relevant Department, the report reaching the PAC, the PAC interviewing witnesses, the publication of our report and the Treasury responding with its minute.
That demonstrates the point. I am sure that the Minister on the Treasury Bench will accept that due to the hard work of the PAC millions of pounds have been saved. Clearly, if it takes a minimum of 18 months between our making recommendations and change on the ground—it takes time for Departments to change their practices—there is a question about whether the PAC can provide value for money.
We looked at the prison population between 2002 and 2004, during which period there was a 17 per cent. increase. One thing that was clear from the report was that the rising numbers of prisoners caused major operational problems for NOMS. The real problem is that it is difficult to predict further increases in prison numbers. We cannot predict levels of crime, the success rate in securing convictions or changes in court sentencing powers. However, we have learned from the experience in 2002 that there is a need for the Prison Service to put in place contingency plans because sometimes things go pretty badly.
We know why prison overcrowding is a major problem. It means that prisoners cannot receive a suitable level of care or be properly rehabilitated. I know from my own experience in Wandsworth that it leads to increases in the incidence of self-harm and suicide. More than 700 prisoners are transferred to hospitals under the Mental Health Act because they live in overcrowded prisons. It also leads to disruption of the education and training of prisoners. I am afraid that all those points did not reach the same sunshine that the hon. Member for South Norfolk maintains led to his neighbour, my right hon. Friend the Member for Norwich, South (Mr. Clarke), losing his job as Home Secretary and to the excellent changes that were made with regard to foreign prisoners, which would not have come about were it not for the work that we did.
One of our recommendations was for the courses that prisoners follow in prison to be provided in shorter modules. When prisoners are transferred, if their education files are not transferred with them, it can lead to real problems, especially when it comes to the most ill-educated prisoners. If we magnify the problem with education files being transferred, we can see one of the reasons why there is a huge problem with foreign prisoners. Information may not be transferred between the immigration and nationality directorate and prisons when prisoners are transferred. It leads to debacles such as that which led ultimately to the Home Office being declared not fit for purpose.
The second report that I want to focus on is on improving poorly performing schools in England. All MPs have primary and secondary schools in our constituencies, so we are all interested in this report. We examined poorly performing schools, the development of relationships between schools and other organisations, strengthening school leadership and dealing with deep-rooted failures. It is worth looking at the context of the report. Earlier, I referred to the massive public investment of the past 10 years, and although there have been significant concerns about inefficiencies, now for the first time we have the data that will enable us to examine what has been happening to schools and whether improvements can be made.
In conclusion, there are thematic lessons that can be learned from the work of the PAC, and my hon. Friend the Member for Bishop Auckland referred to some of them. In a previous PAC debate, the Chairman told us of his discovery that the first PAC meeting was held not in Gladstone’s time but in 1690. Tongue firmly in cheek, the hon. Gentleman also told us of his concern that he could not find a Treasury minute of that first meeting. I hope that my colleagues on the Treasury Bench will have heard the concerns about time lags raised by me and other PAC colleagues and that there will be fast progress so that we can reap the rewards of the PAC’s work and learn lessons from it.
I am grateful for this brief opportunity to address the House. As a new member of the Committee, I was not present for much of the time when these reports were under consideration, so I do not feel qualified to comment on them. However, I want to make a few quick points to address two themes that other Members have touched on, including the Chairman of the PAC.
The first point is the issue of responsibility. Too often, when there is a problem and individuals from a Department or agency who are responsible for creating it or for overseeing the Department or agency are asked to come before the Committee, we find that they have either been shuffled off to another Department or given another responsibility. The people who actually appear before us can then hold up their hands quite legitimately and say, “Not my problem, sir, although I recognise that there was one”. That is a particularly unsatisfactory means of holding individuals to account. The most extreme example relates to the chief executive of the Rural Payments Agency—mentioned by the Chairman. The individual concerned refused to appear before the Committee. I hope that the House will look carefully at the responsibility of accountable officers to appear before the Committee when required to do so in such cases.
Another issue arises in relation to ministerial responsibility. Again, the most extraordinary situation involved the RPA. Despite a record fine imposed by the EU for the RPA’s mishandling of the single payment system, the Minister who was ultimately responsible—the Secretary of State—found herself promoted to Foreign Secretary. Of course, that may be more a reflection of the political manoeuvring to succeed the Prime Minister and of his wanting the right allies in place than of the right hon. Lady’s responsibility for doing her job.
I want to refer in particular to the report on the Olympics. It is extremely encouraging that the PAC will regularly review that substantial public spending commitment. I speak as a recently appointed vice-president of the London 2012 cross-party group, so I am a supporter of the Olympics. In the nether reaches of the NAO report, there was a reference, which was not picked up during the hearings, to the funding implications of cannibalisation of lottery proceeds as a result of the requirement to fund the Olympics.
We did not touch on that matter during our hearings on the first Olympics report as they took place before the budget was reassessed, but I draw the attention of the NAO to paragraph 48 of the report of 2 February, which noted the estimate that 59 per cent. of Camelot’s £750 million funding stream might come from players switching from existing games. The report states that in fact 77 per cent. of games money was being cannibalised and the discrepancy would be significant for other good causes, especially bearing in mind that an extra £400 million will be needed from the lottery to fund the Olympics. I look forward to encouraging the NAO to scrutinise that matter in greater detail in its subsequent reports so that we have a proper picture of the impact of lottery funding for the Olympics on other good causes.
I pay tribute to the work of the PAC and its Chairman, my hon. Friend the Member for Gainsborough (Mr. Leigh). As we have heard this afternoon, the Committee carries out an invaluable role in scrutinising the spending of taxpayers’ money and it is a great privilege to take part for the third time in the debate on its work. As the Chairman said, the Committee is a force for good and over the past few months its members have demonstrated the unbending commitment to which he referred. The PAC’s work would not be possible without the dedication of the Comptroller and Auditor General and his staff at the National Audit Office. I am certain that the House would like me to convey its gratitude to Sir John, his staff and the NAO, as well as to the members of the PAC and its staff.
As to the contributions to today’s wide-ranging debate, the Chairman of the PAC kicked off with a speech focused on financial management, leadership strategy and delivery. He highlighted the catastrophic failure of leadership at the Rural Payments Agency and outlined some of the tragic consequences— including, in some cases, suicide—of its administrative problems. He rightly highlighted it as a textbook study of how not to run a project in government. He also highlighted the Committee’s concerns that officials often promise notes with further information, but they do not arrive or are delayed, so holding up reports.
My hon. Friend the Member for Gainsborough was also right to underline the outstanding quality of many public officials, emphasising that although the Committee has serious criticisms of many projects undertaken in the public sector, that should not be taken as a criticism of public officials and civil servants across the board. Of course, most of them do an excellent job. Interestingly, my hon. Friend also highlighted another continuing problem in the public sector—low-quality data and information systems. Those problems have been manifested in respect of patient safety and the lack of reliable recording systems for those sorts of incidents.
The right hon. Member for Swansea, West (Mr. Williams) spoke with great insight about child obesity and the Committee’s valuable work on that issue. He spoke in favour of strengthening the proposed restrictions on advertising to children.
The hon. Member for Sutton and Cheam (Mr. Burstow) talked about the report on the Norfolk and Norwich hospital, to which I shall return. He also rightly highlighted the report on urban green spaces. Although it was one of the Committee’s less controversial reports, it underlines a matter of enormous importance. I shall return to that report later in my speech.
The hon. Member for Bishop Auckland (Helen Goodman) expressed in strong terms her concerns about cost overruns. She referred to a culture of irresponsibility among certain officials and expanded on two particular issues, both important in that context—the need to ensure that civil servants have suitable skills and that they are properly accountable.
My hon. Friend the Member for South Norfolk (Mr. Bacon) spoke with his usual insight on the importance of ensuring that this debate, which we have every year, is effective. I share his concern that so many of the Public Accounts Committee’s recent reports are not formally on the agenda today because of delays in receiving official Treasury minutes. I join other hon. Members in urging the Treasury to speed up its response and to consider amending the procedure relating to today’s debate so that we can discuss the most up-to-date work from both the PAC and the National Audit Office. My hon. Friend also talked with great insight about efficiency programmes and how to improve them.
The hon. Member for Tooting (Mr. Khan) referred to an important report on the National Offender Management Service. He was absolutely right to highlight the importance of dealing with prison overcrowding, because overcrowded prisons result in significant interruption to the education and training programmes that are vital for prisoner rehabilitation. Overcrowding also poses the risk of greater incidents of self-harm. The hon. Gentleman’s remarks on poorly performing schools provided another useful contribution to our debate.
My hon. Friend the Member for Ludlow (Mr. Dunne) highlighted the importance of keeping track of the cost of the Olympics—another issue to which I shall return later.
Today’s debate has demonstrated that the PAC’s work over the past few months has been wide ranging. I cannot cover every report, so I have grouped them into three areas: reports on less controversial matters where the Committee had important advice for Government organisations but did not identify critical major failings; reports where significant failures were identified in terms of value for money; and reports outlining more serious systematic failure and lack of competence.
In the first category, I shall first mention the PAC’s report on urban green spaces—a matter of huge importance to my constituents in Chipping Barnet. One of the report’s most interesting aspects is that, as well as emphasising the obvious environmental benefits of such green spaces, it underlines the importance of wider policy goals such as improved health, urban renewal and better community cohesion. A number of Members have talked about the importance of open spaces in the campaign to tackle the important problem of child obesity. The Government and local authorities would do well to heed the concerns of the PAC about ensuring that there is as much public involvement in running green spaces as possible. The involvement of community and voluntary groups can be successfully improved on. That is something that runs well in my constituency. Local authorities across the country would do well to listen to those concerns about green spaces. The PAC highlighted the fact that, although public green spaces are classified as greenfield sites for planning purposes, back gardens are not and hence enjoy inadequate planning protection. I would like the Government to look at that.
Another issue of concern for many of my constituents is the quality of postal services. I was concerned to read in the Committee’s report on Postcomm that insufficient attention was given to the 15 million items of mail that are lost, stolen or damaged each year by Royal Mail.
We have heard from a number of Members about the important advice given by the Committee on improving care to those who suffer a stroke. The Committee continues to be at the forefront of the debate on improving health care in our country. The Department of Health admitted to the Committee that it needed to do more to improve rapid access to brain scanning and to deliver a greater proportion of care through specialist stroke units. As the Chairman has pointed out, implementing the recommendations of the Comptroller and Auditor General could save the NHS £20 million a year and could save as many as 10 lives a week.
Some good news was contained in the PAC’s report on the tsunami, which described the response of the Department for International Development as “both rapid and impressive”. It is important to include the good news, as well as the bad news.
The news is less good in my second category of reports, where significant failings were identified. I would like to look at the latest of the PAC’s influential reports on skills. When taking evidence, my hon. Friend the Member for Tunbridge Wells (Greg Clark) extracted the admission from the chief inspector of schools that, in the period under consideration by the PAC, the percentage of substandard schools had increased. Commenting on the matters in the report, Sir John Bourn said:
“It is unacceptable for any school to carry on providing a poor education over a period that can take up a large part of a child’s school career and deprive them of future prospects and opportunity.”
The Committee returned to some of the problems in our education system in its report on improving skills for employment. It expressed concern that money intended for employment-related skills training was being used to make up for failings in the school system. It is being used to equip people with basic literacy and numeracy skills, which they should have acquired in the school system. The Committee’s recent report on the matter was the latest in a series of quite hard-hitting reports on the chequered history of the Government’s skills initiatives, including the debacle on individual learning accounts, when the Government were forced to withdraw a flagship scheme following allegations of large-scale fraud and abuse running to £97 million.
A key role for the PAC is scrutinising the Government’s efficiency programmes. Here again, some significant concerns were raised. The Committee’s report on Gershon in July last year concluded:
“While progress has been made, reported efficiency gains should…be considered as provisional and subject to further verification.”
When the NAO reported again on Gershon in February, it concluded that only 26 per cent. of the efficiency gains so far claimed by the Government stood up robustly to scrutiny. The rest were uncertain or impossible to verify. The Comptroller and Auditor General’s verdict was:
“Many reported efficiency gains still carry a significant risk of inaccuracy.”
We have heard that there has been progress in terms of the measurement of baselines, but I want to highlight measurement problems, including the failure, in many cases, to include the cost of an efficiency programme in calculating overall savings. In the light of the continuing dispute and uncertainty surrounding the measurement of Gershon savings, a transparent approach from the Government is vital if the programme is to have any credibility. Yet the PAC told us that the Office of Government Commerce refused to provide it with
“basic factual information about the likelihood of departments achieving their efficiency targets.”
I welcome what the Chief Secretary said about making the programme more transparent in future, but it is vital that we have clear figures on the split between cashable and non-cashable savings. So-called non-cashable savings are difficult to quantify or verify, so much so that the Education and Skills Committee has accused the Department for Education and Skills of trying to redefine the concept of money with its claims on non-cashable savings. The Chairman of that Committee warned that the Department was laying itself open to the challenge that it was claiming “fantasy savings”, not real ones. Getting clear figures on the proportion of genuine cashable efficiency is of significant importance to an assessment of whether the Gershon programme will work.
Many have expressed concern that the Gershon programme is having a negative impact on service quality. The PAC recently stated:
“Greater assurance is needed that the quality of public services is not being adversely affected. Service quality needs to be measured robustly to ensure the Programme achieves true efficiencies rather than just cuts in public services.”
We would do well to consider the example of the Department for Work and Pensions because that Department bears a significant part of the burden of implementing the Gershon programme. The PAC identified that more than 20 million calls to the DWP went unanswered in 2004-05. Of course, the switch to call centres was triggered in large part by the Gershon efficiency programme. The Work and Pensions Committee also reported that Gershon programmes had contributed to a “catastrophic service failure” at Jobcentre Plus.
The reports in the third category cover some of the more systematic failures in Government administration. I should mention the devastating report on the refinancing of the Norfolk and Norwich hospital. As we have heard this afternoon, the PFI contractor managed to treble the rate of return for its investors to 60 per cent., while leaving the public sector partner with greater risk and a wholly inadequate share of refinancing gains. The Committee concluded that that was unacceptable
“even for an early PFI deal”.
It was worrying that we heard this afternoon that the trust was directed by Whitehall officials not to try to include a clause on refinancing gains in the contract. I will not dwell on the report on that matter because we discussed it on the last occasion we debated such reports on the Floor of the House, but it is worth noting that the incident was not isolated. Investors in the Ministry of Defence joint services command and staff college increased their return by 72 per cent. after refinancing, while the investors in Darent Valley hospital and Fazakerley prison both increased their rate of return by 144 per cent. after refinancing.
The Committee’s more recent work on the health service has documented the continuing troubles with the national programme for information technology, which is running two years behind schedule with no firm implementation date yet settled. We found out from the report that staff remain to be convinced of the benefits of the programme and that it has not been integrated into a wider programme to improve the way in which the NHS works. We can see serious danger signals, so I hope that the Government will now get a grip on the programme before it goes very badly wrong.
It is primarily the PAC’s hard-hitting work on the Home Office on which I would like to focus while considering the third and last category of reports on more problematic matters. In January 2006, Sir John Bourn started a ball rolling that eventually revealed the full extent of the crisis in that troubled Department when he gave a disclaimer of opinion on the 2004-05 Home Office accounts. Frankly, that was a staggering step. As we heard from my hon. Friend the Member for South Norfolk, Sir John Bourn did not give a qualification of the accounts. The errors and mis-statements were so serious and numerous that the Auditor General could not reach an opinion at all on the state of the accounts. It was not surprising that when the permanent secretary of the Department gave evidence to the Committee, he felt compelled to offer it an apology.
It should be pointed out that the then permanent secretary, Sir David Normington, signed the accounts only because he was told that he had to so that they could be presented to Parliament, even though they were being presented unaudited. It was his predecessor as permanent secretary, Sir John Gieve, who was responsible during most of that period. What does my hon. Friend think that it says about the system that, after having presided over such a fiasco, Sir John Gieve was promoted to be the deputy governor of the Bank of England in charge of financial stability in the banking system?
It certainly does not give me a great deal of confidence in the method used to appoint members of the Bank of England committee, but it is probably more constructive to focus on the system, rather than the individuals involved, although I share a number of my hon. Friend’s concerns on that point.
To be fair, the situation as regards accounts is improving, but it remains a matter of concern that Sir John has qualified his opinion of the accounts for the past two years, and the report by the Committee details a continuing major problem concerning the release of foreign prisoners. It concluded that between February 1999 and March 2006, more than 1,000 foreign nationals were released without being considered for deportation. They included four murderers, 14 rapists, 15 child sex offenders, eight kidnappers, 107 other violent criminals, and 184 drug dealers. Sir David Normington admitted under questioning in the PAC:
“I cannot defend that. That is not acceptable.”
The Committee reached the deeply worrying conclusion that
“The Home Office does not have a grip on the issue of foreign nationals released from prison and not deported, and was unable to provide full information to the Committee about the numbers or locations of such offenders. It could not provide any assurance that foreign nationals are no longer being released from custody without consideration of deportation, or that definitive action is being taken to improve the situation.”
“systemic failings affecting the whole Department”
“symptoms of a deeper lack of leadership and co-ordination.”
As we have heard, there were continuing problems in the Home Office in relation to the state of our prisons, with overcrowding undermining the ability of the Prison Service to monitor those who may be at risk of self-harm or suicide and producing a highly disruptive effect on the education programmes that are so vital for effective rehabilitation. The Committee was critical of the use of temporary portakabin units to house a sudden growth in the prison population in 2002. A number of the units had not been tested or used for prison accommodation before, and could not be properly secured. Many of them of suffered from leaks, condensation and security problems. Some were of such poor quality that prisoners had to be given their own keys because of the fire risk. In the PAC’s study on tagging offenders, it noted with concern one case in which more than £8,000 in compensation was paid to two offenders who were returned to prison because of damaged tags. The Home Office had destroyed the tags before their appeal was completed, and could not prove that the offenders had been responsible for the damage.
In conclusion, it is clear to me that the Government probably have a long way to go before they can instil in the public sector the real culture of efficiency for which the Comptroller and Auditor General, the National Audit Office and the PAC have long been calling. I shall close by referring to a speech that I made in January last year, when I first had the pleasure of winding up a debate on the reports of the PAC. In that speech, I pointed out how important it was for those in charge of the London Olympics to listen to the advice of the PAC on project management and safeguarding taxpayers’ money, and I hope that they will do that in future. I expressed the hope that that would help them to avoid many of the mistakes that have characterised Olympic projects in the past. It is therefore with anxiety and disappointment that we have witnessed the Olympic budget treble in a matter of months. I hope that in future years we will not, as I predicted in January last year, be standing here discussing PAC reports on what went wrong with the preparations for 2012.
It is my privilege to respond on behalf of the Government to this debate, which has reflected the hallmarks of the Public Accounts Committee. Like the Committee, it was serious, wide-ranging, authoritative, sometimes highly critical, but at all times conscious of the need to be constructive and concerned to ensure that the Government are delivering services that are better value for money to the public. The debate was led in exemplary fashion by the hon. Member for Gainsborough (Mr. Leigh), who chairs the PAC, in a way that exemplified the qualities of his Committee.
In many ways, Winston Churchill caught the way in which a confident Government should respond to the PAC when he said:
“Personally, I am always ready to learn, although I do not always like being taught.”
Although Ministers may sometimes flinch or wince at the conclusions that the Committee draws—certainly, a PAC hearing is one of the least favourite appointments in any accounting officer’s diary—the Government share many common aims with the PAC. In its 63rd report, which was published on the day in July when we last debated the PAC’s work, the PAC said:
“Providing high quality and cost effective public services is not easy.”
It said, too, that people
“want public services that work. They want them to be easy to find out about, simple to use and responsive to their needs.”
The Committee’s work is a valuable contribution to efforts to achieve that challenging task.
May I pay formal tribute, too, to the Comptroller and Auditor General and the National Audit Office? The PAC has high expectations of the NAO, which rises admirably to the task of meeting both the specific need of supporting the Committee’s work and the wider needs of Parliament in holding the Executive to account. When we debated the PAC’s work in July, I promised that the Company Law Reform Bill would extend the NAO’s remit and reach. I can confirm to the House that, working in collaboration, the Treasury and the NAO have identified about 80 non-departmental public companies to which the Comptroller and Auditor General can be appointed as auditor when the Bill’s provisions come into force in April next year, including Investors in People, the UK Film Council and the Student Loans Company.
The NAO audits over 500 accounts, so that will be a significant addition to its workload. However, I know that the Comptroller and Auditor General and his staff will work hard to ensure a smooth transition when the Bill’s provisions come into force. In recent years, there has been a significant growth in the NAO and a very significant growth in the resources allocated to it. The £90 million budget for the NAO this year is almost double its budget in 2001. Oversight is the responsibility of the Public Accounts Commission, but we all look forward to the NAO achieving efficiency gains in the same way as the Executive are rightly expected to do.
May I turn to the contributions to the debate before making some points about the Government initiatives in which the Public Accounts Committee is interested? I knew about the extraordinary experience of my right hon. Friend the Member for Swansea, West (Mr. Williams), but I did not know that he was a member of the PAC in the 1960s, before becoming a member of the Government. He concentrated on two reports, both of which he rightly said have the potential to achieve long-term benefits. He was concerned about childhood obesity, which is the subject of the Committee’s eighth report. It is clear from the report and from his remarks that that is a complex issue and that the challenges are long-term. However, the strategy that is in place has started to produce results. I agree with a specific point that he put to me—it is wrong not to give parents the information that they need about their children’s weight. I shall look into that for him, and ensure that he receives a reply. I shall take up, too, his concerns about the replacement requirements in the gas distribution network, and similarly ensure that he receives a response giving the Government’s view about his concerns and about the risks for the future.
May I welcome the hon. Member for Sutton and Cheam (Mr. Burstow) to his first PAC debate as the Liberal Democrat spokesman? He dealt with the PAC’s 35th, 56th and 58th reports, and brought to bear on them his established reputation and interest in social policy. He made some serious points about the report on prisoners’ diet and exercise. I thought that we would be deflected by the interventions by the hon. Member for South Norfolk (Mr. Bacon), just as the Committee’s evidence-taking session last year was deflected. I am fortunate enough to receive the minutes of evidence, and the hon. Member for Tunbridge Wells (Greg Clark) spent almost his entire allotted time for questioning exploring the nature of porridge and its place in the penal system. I had not realised, however, until the intervention by the hon. Member for South Norfolk that porridge helps the brain to release serotonin. In fact, I had not realised that there was such a thing as serotonin.
More seriously, the hon. Member for Sutton and Cheam said that the two crucial questions are these: have the lessons from PAC reports been learned and, more to the point, has action been taken as a result of the assertion that lessons have been learned? I believe that the PAC’s reports, including the ones that he mentioned, help Members of Parliament both independently and as members of departmental Select Committees to pursue the continuing concerns that the PAC has raised and therefore the answers to those two questions.
My hon. Friend the Member for Bishop Auckland (Helen Goodman) rightly said that skills and, in particular, accountability are the hallmarks of good governance and good Government. She acknowledged that although the British civil service has many strengths, management capacity is not generally one of them. She spoke not only from her experience on the PAC but from her experience in the British civil service, so her comment is especially telling. She referred to five reports during her speech and drew the important conclusion that good public services and good delivery of those services depend on the right skills, strong democratic accountability and regular regulation and inspection.
The Chairman of the Committee described the hon. Member for South Norfolk as “a bit of an anorak”—a soubriquet that the hon. Gentleman was happy to accept—and “an East Anglian roundhead”. To be frank, I prefer the latter description, which is more swashbuckling and more in keeping with the energy that the hon. Gentleman brings to the PAC’s work and to this afternoon’s debate. The hon. Members for Chipping Barnet (Mrs. Villiers), for Gainsborough and for Sutton and Cheam and my hon. Friend the Member for Tooting (Mr. Khan) all paid tribute to the work of the hon. Member for South Norfolk in triggering the exposure and assessment of the problems in the Norfolk and Norwich hospital PFI project.
The hon. Gentleman expressed general concern about transparency. I welcomed the recognition by the hon. Member for Gainsborough both in today’s debate and in the Budget debate of my right hon. Friend the Chief Secretary’s move to consolidate the breakdown of departmental performance in the efficiency programme. The hon. Gentleman described his comments in the Budget debate as a bouquet for the Government. We do not get many of those from the Opposition, so we are happy to accept that one.
The other concern expressed by the hon. Member for South Norfolk centres on the publication of the conclusions of Office of Government Commerce gateway review processes. He made it clear that he has heard me explain the position before, so I shall not repeat that explanation. He knows the concerns about compromising the value and purpose of those reports and that process, but I confirm that I am considering the general approach to the release of information on gateway reviews.
Given the comments made by my hon. Friend the Member for Tooting about delay in the PAC receiving Treasury minutes, I can only hope that the minute dating from 1690 that could not be found is not one that the PAC is still waiting for, but has been mislaid. My hon. Friend is right to say that through its work the NAO has contributed to savings of millions of pounds. He is also right to draw attention to some of the wider issues in the 44th report, because although most attention was given to records about foreign prisoners and their release, the report set out some other important detailed concerns that set an agenda for the Home Office to pursue in future.
The hon. Member for Ludlow (Mr. Dunne), who is new to the PAC, was unfortunately short of time to speak in the debate. I know the serious contribution that he has made to a succession of Finance Bills on which we have served together, and I am sure that he will make a valuable contribution as a member of the Committee.
The hon. Member for Chipping Barnet caught the tone of the debate well. She talked about both good news and bad news. She talked more about bad news than about good news, but perhaps that is her job. She was right to conclude by commenting on the serious failure in the system of Home Office accounting which resulted in the accounts being disclaimed by the Comptroller and Auditor General. Progress has been made, as the Public Accounts Committee has acknowledged, not only on the accounting side but on the policy and delivery side.
Let me turn to some of the initiatives that the Government have been taking that the PAC will be interested in. They are very much in line with looking for a more economic, effective and efficient delivery of public services. In the Budget, my right hon. Friend the Chancellor set out how the 2007 comprehensive spending review will build on the strengths of the public service agreement system to drive improvements in the areas that we regard as our policy priorities, while at the same time developing a framework for supporting performance management that enables a more user-focused and devolved approach to public service delivery. That will include each Department publishing at the CSR a new comprehensive set of strategic objectives that it will use to manage and report on performance and to inform resourcing decisions. Alongside a smaller set of cross-cutting public service agreements, those developments will allow a more coherent and better aligned framework for performance and financial management across the board.
On better links between performance and financial management and monitoring, I have today informed the Treasury Committee that we in the Treasury intend to pilot combining the departmental report and resource accounts for 2006-07. At least one other Department—the Department of Trade and Industry—will participate in the same pilot. One of the main benefits that I expect is a reduction in the overlap of information and the confusing differences between estimated out-turn figures in the departmental report and actual out-turn figures in the resource accounts, which are published within a few weeks of each other. It will also lead to closer links between reporting on outputs and performance, on the one hand, and inputs and spend, on the other, with spending data being audited and hence more reliable. Our work in the Treasury on our 2006-07 annual report and accounts is on track for publication in early June.
The hon. Member for Gainsborough dwelt on a specific concern that he described as the first of his four components of capable Government—financial management. For the past two years, with support from the PAC, a major drive has been under way to improve the professionalism of finance functions in Government. In passing, I should like to pay tribute to the work of the Treasury’s finance director, Mary Keegan, who has led this work. I am pleased to be able to tell the House that as a result more than 90 per cent. of Government spend is now being overseen by professionally qualified finance directors, with additional work ongoing to strengthen financial skills across Whitehall.
Competent Government and improving financial management is about more than just the finance function within a Department, however. Also critical are overall governance arrangements and the financial management capability of general managers throughout Government organisations. In the previous PAC debate in July, I was able to advise the House that a new learning facility to help managers in Government to improve their financial skills had just been launched. Today, I can confirm that access to this tool is being made available to all Members of Parliament; we can expect to find further details in The House Magazine shortly.
In his opening speech, the Chairman of the Committee referred to the value of departmental capability reviews. I welcome the way in which the review teams are working with Departments that have thus far been reviewed to offer practical support in following up the recommendations. I want to underline the fact that the Government take very seriously the lessons that are emerging from those capability reviews and see them as an important opportunity to improve service delivery.
As Minister responsible for the Office of Government Commerce, I felt that the model of a capability review was so useful that I borrowed the discipline and built it into the reform plans that I set out in January in the document, “Transforming Government Procurement”. The reforms that we are now pursuing are designed to deal with the two points that the hon. Member for Gainsborough urged on us, namely, that the Government need to become more commercially astute and that the OGC should be raised up the civil service pecking order. The plans for reform will achieve that. They are intended precisely to recognise that good procurement is essential to good public service delivery and good government as well as good value for money in both.
I want briefly to consider the initiative that the UK has led in Europe on financial management and monitoring European spend. I am heartened by the PAC Chairman’s response and that of others. If all member states work with their national audit institutions and Parliaments to improve their control and scrutiny of EU funds, we could make significant progress in getting a positive statement of assurance on the EU budget from the European Court of Auditors. The Netherlands and Denmark are taking a similar initiative to that of the UK and Sweden has said that it will do the same. In our annual White Paper on EU finances, which is due next month, we will present further information on the UK initiative.
I said earlier that the PAC’s work is not always comfortable for the Executive—it should not be. It is inevitable and right that the PAC’s work focuses on things that have gone wrong, although it acknowledges examples of good practice, as we heard this afternoon. When things go wrong, the central challenge for the Government is to learn the clear lessons and act to ensure that things are better in future.
I ended the debate in July with a quote from a Roman poet. That is the advantage of having such learned as well as skilled officials to support me as a Treasury Minister. Today, I should like to end with a quote from an American theologian, Tyron Edwards, who said:
“Some of the best lessons we ever learn we learn from our mistakes and failures. The error of the past is the wisdom and success of the future”.
The PAC’s work undoubtedly helps ensure that the Government can build success out of the lessons of the past.
It is a great pleasure on behalf of PAC members to thank the shadow Chief Secretary and the Financial Secretary for their positive and non-partisan summing up of the debate.
I especially thank the Financial Secretary for his comments about taking up various recommendations that the Committee has made, especially on EU spend, the capability reviews and public service agreements. We are grateful to him for taking our work seriously. I am sure that he agrees, given his interest in theology and history, that those who do not learn from the mistakes of the past are condemned to repeat them. We pay tribute to his work as a member of the Committee. He is, uniquely for a Minister, a member of the PAC. I do not know why that is the case, but the Financial Secretary—not the hon. Gentleman personally, of course—has been a member of the Committee for several centuries.
I thank all hon. Members who took part in the debate. It is a pleasure to hear Ministers and shadow Ministers going through all those who spoke and referring to their contributions in detail. Sadly, that does not often happen in other debates.
I hope that the suggestion of the right hon. Member for Swansea, West (Mr. Williams) about child obesity will be taken up. It is important to ensure that parents are told if a child is found to be greatly overweight. If the debate achieves one thing, it is important for the Government to take that point on board.
I also hope that the Government will take on board the point of the hon. Member for Sutton and Cheam (Mr. Burstow) that it is unacceptable for recommendations that the PAC made in 1998, and that the Government accepted—about prisoner diet, including that there should not be more than 14 hours between meals served in prisons—to remain on the table 10 years later.
The hon. Member for Bishop Auckland (Helen Goodman), with all her Treasury experience, made an important speech. We still have not got matters right. We expect too much of civil servants: we want them to wear the hats of brilliant policy advisers and of those capable of delivering successful projects. I know that the Government are aware of that problem, however, and in the past few years we have made enormous progress in moving away from the mandarin culture.
I hope that permanent secretaries will take note of what my hon. Friend the Member for South Norfolk (Mr. Bacon) has said today. He listed all those departmental accounts that had been qualified. There is too casual an attitude about this; some Departments think that if they have their accounts qualified, they will not have to appear in front of the Public Accounts Committee.
I would say to the hon. Member for Tooting (Mr. Khan) that I wish there would be a front-page splash in the Daily Mail saying, “Public Accounts Committee Congratulates the Government”, but it will not happen. However, we will do our best to try to be positive whenever we can.
I thank all those who have spoken in the debate, especially the Front-Bench spokesmen and, of course, my hon. Friend the Member for Ludlow (Mr. Dunne) who, sadly, did not have time to deliver all his speech. We on the Committee will continue to do our best to hold the Government to account in a positive and unpartisan way.
Question put and agreed to.
That this House takes note of the 35th and the 43rd to the 63rd Reports of the Committee of Public Accounts of Session 2005-06, and of the Treasury Minutes and the Northern Ireland Department of Finance and Personnel Memorandum on these Reports (Cm 6879, 6900, 6908, 6924, 6959, 6981 and 7017); and of the 1st to the 8th and the 10th Reports of the Committee of Session 2006-07, and of the Treasury Minutes and Northern Ireland Department of Finance and Personnel Memoranda on these Reports (Cm 7018, 7019, 7020 and 7035).