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Public Accounts

Volume 465: debated on Tuesday 23 October 2007

I beg to move,

That this House takes note of the 9th, the 11th, the 13th to the 40th and the 43rd to the 45th Reports, and of the First Special Report from the Committee of Public Accounts, Session 2006-07, and of the Treasury Minutes thereon (Cm 7076, 7077, 7151, 7152, 7216).

Christmas may come only once a year, but other good things come more often, and this is the second debate this year covering the work of the Committee that I am privileged to chair. I am sure that Members will think that a just reflection of the prolific output of the Committee, and of the importance of its work.

Our motto was spelt out some 150 years ago when the House was built and the Committee was brought into being. Above the door of Room 6A, which I have the privilege to use as Chairman of the Committee, is one word, “Assiduity”. That is a watchword for all members of the Committee. We are, we hope, assiduous in holding the Executive to account, and in pursuing savings and improvements in public services. That role is perhaps not taken as seriously as it should be, but it is vital to the work of the House. It is therefore important to have two occasions every year when we can put the spotlight on efficiency savings.

The Prime Minister says that his route map for the governance of Britain includes helping this place to hold those in power more accountable. I contend that that is what the Committee tries to do week in, week out. It can be testing, I know, for permanent secretaries to appear before the Committee, and we make no apology for that. In our last debate, I challenged those most senior of civil servants who appear before us to show without question that they understand the seriousness of their responsibilities to the Committee. I was thinking particularly of the way in which notes are often promised but their production is often subject to severe delay. Various commitments have been given, which I welcome. It is too early, however, to pass judgment on what will happen and whether the commitments will be carried out. I remind those on the Treasury Bench, however, of those commitments on behalf of permanent secretaries. I and my fellow members of the Committee remain on the watch. As we have seen in the past two or three years, it is absolutely vital that notes that are promised are delivered on time.

Does the Chairman of the Committee agree that it is not only important for notes to be made available when they are promised, but for the responsible officers of Departments to appear before the Committee whether or not they remain in post? I am thinking particularly of Mr. Johnson McNeil from the Rural Payments Agency, who failed to appear before our Committee for nearly a year after he was initially invited to do so.

That was a worrying development. Civil servants have a very difficult job, but usually, whatever happens, and whatever mistakes are made, they keep their job. If something goes wrong, however, they know that they must appear before the Public Accounts Committee. Mr. Johnson McNeil presided over one of the greatest failures of government and caused a lot of anguish to farmers. Our hearing, however, was delayed for the better part of a year while various sick notes were put in, phone calls were not returned and so on. Finally, he appeared, and in my view he was a perfectly adequate witness who gave his side of the story.

Another message that we want to pass back to Whitehall is therefore that civil servants must realise, even if they are suspended from their post or have moved on to a different Department, that there is one place that they can be held to account on behalf of the public—in front of the Public Accounts Committee. Their superiors and the whole system must ensure that they turn up.

An appearance in front of the Committee can be testing, but at the same time we try to be fair. We are not in any way party political, and we try to give praise where it is due, and to help the Government. This is not often heard from Opposition Members, but I and my fellow members of the Committee try our best not to be partisan. We try to help the Government, as best as we are able, to learn from best practice in whatever nook or cranny it can be found.

By convention, the debate looks back at matters arising from the Committee’s recent work. It also looks forward, however, as important lessons arise from our reports. We look to officials to apply those lessons and that experience to new challenges in whatever area of government they arise. The new challenges are many and varied.

In the previous debate, in April, I think, I referred to the comprehensive spending review, which arrived earlier this month. What can we glean from it to guide the work of the Committee, given that this is the sort of tapestry on which we draw our work? Well, the squeeze is certainly on. If the aims are translated into action, the munificent Treasury will no longer be showering spending Departments with ever-increasing pots of gold. Everyone will have to raise their game to ensure that more limited increases in Government spending translate into better public services for all. Initiatives to cut waste, slash red tape and make better use of what we already have are essential if the whole edifice is not to crumble.

The Government report that they are on track to realise their efficiency target of a massive £21.5 billion of savings by next March. That is really at the centre of the whole political debate—at the centre of the issue of whether political parties can deliver improving public services and lower taxation. The efficiency programme is the centrepiece of the Government’s efforts to get more for less. The Treasury claimed that it had already achieved an annual £13.3 billion of efficiency savings, but I am afraid that, as we found in one of our recent reports, the claim does not stand up to close scrutiny. Our report cast doubt on the reliability of 74 per cent. of the savings claimed.

It should be crystal clear whether or not any programme has achieved its goal. Efficiency gains must be real and demonstrable, and must be deliverable year after year. Remarkably, it was possible for claims to be calculated without account being taken of associated increases in costs elsewhere. Efficiency is not genuine if, as we have found in a number of cases, it has been achieved at the expense of the quality of service provided.

Guarding against such—let us be generous—confusion is an important task for the Committee. I was therefore pleased to note the Government’s announcement in the comprehensive spending review that there may be what we consider an important role for the National Audit Office in reviewing claimed savings on a Department-by-Department basis. That means an independent audit of what is now at the heart of political debate for all three political parties—indeed, for every political party: I see that parties other than the three major ones are represented here.

If the scale of savings required is significant, the scale of projects that may cross the Committee’s path in the near future is monumental. Let me list some of them. We are talking about £9 billion, already, for the Olympics; £19 billion to replace Trident; £12.5 billion for IT in the health service; at least £5.5 billion for identity cards; and £16 billion for Crossrail, which we debated earlier today and which is finally emerging from its elephantine gestation period. That is more than £60 billion in just one sentence, and I could go on and on.

It looks like boom time for the contractors and consultants, but what lessons can be taken from the work of the Public Accounts Committee to ensure that it will not be the taxpayer who goes bust? We will have published nearly 70 reports by the time the Session ends, far more than any other Select Committee. I will spare the House the details of all of them. Sometimes in the past Chairmen have gone through the whole list, but I think that that is tedious, and there is no point in it. Instead, I shall focus on some of the essential verities that Government will need to grasp in response to the challenges that I have outlined.

First, there is good project management. The Committee has seen a sorry succession of projects cursed by weak management and implementation. With some 100 mission-critical or high-risk IT-enabled programmes and projects, the risks are very high. Given the history of past failures, Government need structures and management processes that will secure greater success.

When things go wrong, everyone pays the price. The implementation of the single farm payment scheme, which was mentioned by my hon. Friend the Member for Ludlow (Mr. Dunne), was inept, and my Committee said so. The timetable was near-impossible. The planning was poor. The testing of IT systems was incomplete. Responsibility was confused. Management information was scant. Above all, top managers failed to face up to the crisis, and, as we heard earlier, to answer for it. Farmers, many of them in my Lincolnshire constituency, were hit emotionally and financially, and the taxpayer had to confront a potential liability approaching £500 million. Let that fiasco be studied for years to come, and let the message be drummed home to senior civil servants: never again.

I was interested by what my hon. Friend said about the Rural Payments Agency. He mentioned testing of the computer systems. A theme that has recurred a number of times, for example in regard to the issue that we examined relating to tax credits, is the failure to engage in adequate testing. The compression of the testing timetable featured in the Committee’s report. What is it about computer systems that gives the Government such an aversion to testing them properly before they are implemented? Or is this a result of Ministers’ shouting from the rooftops that projects must be completed by a particular date regardless of whether they are ready?

My hon. Friend’s last point illustrates a difficulty that arises in Government. We live in a political system under which Ministers understandably want to get their own projects up and running while they are in office. Projects in the public sector are often far bigger and more complex than those in the private sector. The combination of political interference—if I may put it that way—and the sheer scale of projects frequently causes disasters. But let me take up my hon. Friend’s point immediately, and say that we do not always want to be critical.

Another problem may be the fact that civil servants are not prepared—I do not know why, because they should be—to stand up to Ministers. A Minister will get a bright idea and say, “Let us do it this way, let us do that, let us adopt such and such an initiative”—and senior civil servants do not dare to say, “We cannot do that with our current resources” or “We cannot do it while we are firing staff under the Gershon programme” or “We cannot do it because our computer systems will not cope with it”. Civil servants ought to stand up to Ministers; that is what is primarily needed.

It would be great in an ideal world, but it might be rather career-limiting for a civil servant to stand up to his political master in the way that the hon. Gentleman describes. That was one of the problems with Johnson McNeil. We were surprised to hear that a man who had been charged with running such a huge project had apparently never seen the Secretary of State, or had seen her on only one or two occasions. That was rather worrying.

Well, there we are. Perhaps he made the mistake of standing up to a Minister on the first occasion; we do not know.

The single farm payment scheme represented government at its worst, but a fortnight ago the Committee praised the introduction of the first generation of e-passports. That showed that the public sector can successfully deliver a major scheme to time, cost and quality. It was good to see the Identity and Passport Service taking on all the recommendations made by our predecessors. Planning from the outset was for a cautious, low-risk project of which my hon. Friend the Member for South Norfolk (Mr. Bacon) would approve, featuring substantial testing and sufficient time for a progressive roll-out rather than a big bang, a switch and the job was done. There are lessons in that which could well be learned throughout Whitehall.

Does the hon. Gentleman share an impression that I have gained while serving on the Committee under his chairmanship? Does he agree that it always appears novel when we suggest to senior civil servants that they should carry out a “lessons learned” on any project, and that it is frustrating when no one takes responsibility for anything that goes wrong?

That is certainly frustrating. As Chairman, I am trying to establish a greater focus on the Treasury minutes. Members may be aware that our Committee is unique in that the Government must reply to every recommendation, and do so in a Treasury minute. While we are proud of the fact that 90 per cent. of our recommendations are apparently accepted by Government, when we examine the outcome we find that many of them are not adopted more widely across Whitehall, and as the right hon. Gentleman suggests, Members are often frustrated by a lack of accountability on the part of senor civil servants. That is why we are insistent that we will on occasion want not only to interview the current accounting officer, but also to summon back a previous accounting officer when it is clear that the current one is simply speaking from a brief because he or she has been in the post for only a few months and what went wrong was in fact the fault of the previous accounting officer. There is so much shuffling of chairs around Whitehall that it is often difficult for us to direct some light on who or what is responsible for faults.

I respect the civil service and am generally loyal to it—as the son of a senior civil servant, I know that they have a difficult time. However, although we in this House tend always to lay the blame on their political masters, one of the virtues of the PAC is that it recognises the reality that senior civil servants play a powerful role in our system and that occasionally they must individually be held to account. They must be named and shamed, and sacked where necessary if they have been incompetent rather than merely the policy having been wrong. I am sorry to have to say this to the senior civil service—I know that many senior staff read the Hansard reports—but we will in future be prepared to do that more often.

Our 27th report, snappily entitled “Delivering successful IT-enabled business change”, identified essential ingredients that help projects to avoid ending up on the rocks. Clear and resolute leadership is critical, as is strong budget management and having the internal experience and expertise to get the best from contractors. That sounds obvious, but it is a pity that such lessons are not learned more widely. Above all, there must be a crystal clear sense of where people are trying to get to, and a map of how to get there.

Clear and resolute leadership requires senior decision makers to ensure clear lines of accountability and strong progress and risk management arrangements. Ministers must be challenged in order to ensure that plans are realistic—the hon. Member for Great Grimsby (Mr. Mitchell) made that point. The single farm payment scheme and the Child Support Agency are examples of complex and over-ambitious projects that suffered from a blurring of accountabilities.

This sounds like a simple task, but management must also keep a tight grip on budgets. That point takes me on to the subject of the Olympic games. We all hope that, when the finishing line is crossed on 27 July 2012, they will be a great success—I am sure they will be. The risks, however, remain. The original bid seriously underestimated the cost of the games and was far too optimistic about the extent of private sector funding. We will shortly have a hearing on that, and we will constantly point a spotlight on the Olympic games so that we do not have merely an, as it were, post hoc PAC report on the Olympics after 2012; we want to keep close track of them as we approach 2012.

The Olympics budget currently stands at £9 billion. No single individual has overall responsibility for delivering the games and the plethora of bodies involved presents significant risks to timely decision making, among other potential problems. Strong progress monitoring and risk management arrangements are essential, but they are not yet in place. Therefore, the Committee, with the support of the National Audit Office, will continue to keep a close eye on progress. We hope that when we reach 2012 the lessons will have been learned and we can have Olympic games that are both successful and—for the first time ever—delivered on budget.

The public sector faces unique challenges. Its projects are every bit as complex as, and often larger than, those in the private sector. We should be optimistic, as some progress is being made. Our reports show that it is possible for the public sector to impose tight management disciplines on big projects. As Committee Chairman, I am keen to ensure that the PAC pays due recognition to public sector successes—that we do not always seek to carp, but that we congratulate, praise and welcome where appropriate.

The Department for Transport admits that the programme to modernise the west coast main line was originally “naively based”. That naivety had enormous financial consequences, but the Strategic Rail Authority and Network Rail stepped in; they strengthened project management, and passenger numbers are now up and journey times are down, and trains are more likely to run on time. There is much still to do, but we congratulate them on turning things around.

Only if Departments can act as intelligent clients can they be sure of getting the best value for money from external suppliers. Departments need, of course, to understand the process being changed and have clear design requirements, but having the right staff and skills in place to engage effectively with suppliers can be the difference between success and failure. The Child Support Agency did not have the in–house technical expertise it needed to challenge its supplier. No one involved truly knew what they were doing in dealing with the contractors, and the IT system was a turkey from day one. It might prove to have been right to put the CSA out of its misery—most Members accept that—but the Government must also keep an iron grip on the new Child Maintenance and Enforcement Commission. It should not have taken 13 years of failure before the CSA was finally put out of its misery.

Let me now turn to the topic of understanding and communicating the benefits of programmes. Active management and the right mix of staff will go a long way in helping Departments achieve the third in a trinity of success factors: having absolute clarity about the benefits they are trying to achieve. Not only do Departments need to have clarity themselves, but they need to sell the benefits to users, win wider support for change and, ultimately, assess whether the programme or project has achieved what it set out to do. Those are brave words, but when we examined the NHS IT programme we learned that there was still a great deal to do to win hearts and minds in the NHS. That is a major problem with this huge Government IT programme. Scepticism is rife throughout the NHS. With sums involved of more than £12 billion and counting, this is a high stakes game, and the Committee will return to the subject. By contrast, in terms of the west coast main line the SRA successfully engaged stakeholders in support of the programme and to clear effect. If we are to make a success of the NHS IT programme—as we are all committed to do—there must be more engagement with people on the ground, particularly GPs.

Government need to adopt a more commercial approach to procurement. Central civil Government organisations spend approximately £20 billion a year on goods and services. About one third—almost £8 billion—of the Government’s own efficiency savings are expected to come from more efficient procurement. Therefore, procurement is essential to their efficiency programme. There is certainly scope for such savings: in the past six months, in just four Committee reports we identified potential savings of some £1.3 billion a year. Consultancy firms have been on to a good thing, and we found that there was the potential to save £500 million in Departments’ use of consultants by making more use of in-house staff, negotiating better contracting terms and getting improved results for the money they spend. We are pleased that the Cabinet Secretary is taking action, but will that produce results? Is all of this just words in Treasury minutes, or have we now moved on from what we see as an over-reliance on external consultancy firms? There is often enough in-house expertise.

Another £500 million a year could be realised if OGC Buying Solutions was to improve performance and increase co-ordination. I was pleased to see that OGC agreed, and it was set a target to achieve £1 billion a year in savings by 2010.

Best practice would often make a genuine difference if transferred elsewhere. There could, for instance, be the following savings: more than £220 million from the £2 billion a year spent on food in four key areas of public services; and more than £75 million a year if further education colleges adopt modern procurement practice. Opportunities exist, and even in such mundane matters as food procurement the possible savings are staggering.

Wherever possible, procurement must be open and competitive. I will raise one minor example; a relatively small sum was wasted, but it offers a useful lesson. The backroom deal pursued by the Department of Health with Dr. Foster Intelligence was a failure in Government’s duties to Parliament and the taxpayer. The sums involved were small, but fundamental principles were at stake. The choice of company and the haste with which the deal was concluded gave the Committee cause for concern. It is important that we occasionally draw back from all the huge projects and our need to talk in terms of hundreds of millions or billions of pounds and examine a small project, such as that involving Dr. Foster Intelligence, so that we can learn lessons.

I have not yet mentioned the Ministry of Defence. Suffice it to say, given the mismanagement of technical and commercial risks on the Astute submarine programme, which was highlighted in the major projects report, that we will watch progress on the massive Trident replacement programme with two eyes fully open. If hon. Members will forgive the pun, little of this is rocket science; the simple adoption of methods tried and tested in much of the public and private sectors could save the taxpayer billions.

I know that the Government, and Opposition parties, are wary of going back to the public and trying to make the case for efficiency savings. They think that the public do not believe that Government, or a future Government, can deliver efficiency savings, but they can be delivered and that is happening to a certain extent. An important role of the Committee is to put a spotlight on efficiency savings, to convince the Government to carry on with their work and to convince the Opposition that efficiency savings are deliverable now and in future.

I come to my final theme, which, again, I have emphasised before. We can only truly judge whether all the expenditure announced in the comprehensive spending review is effectively used by assessing its impact on the end user—the consumer. It is all very well to talk in technical language, but we often forget that we work on behalf of the consumer, who is also usually the taxpayer.

The Government’s “Transformational Government” mantra calls for public services to be designed around the needs of the consumer, not the provider. Unfortunately, to take just one example, that was not the case in the introduction of the new out-of-hours care system. We found that the preparations for the switch in a system used by 9 million patients a year was shambolic. Patients’ needs are not best served by the ending of Saturday morning surgeries, nor by a situation where access to advice and treatment is difficult and slow, or where no one knows whether the new service is meant for urgent cases only or for any requests for help. We accept that the new service is getting better, but it is costing about £70 million a year more than expected, which is the last thing that primary care trusts wanted or need in this difficult climate.

On a more positive note, we returned in this period to the issue of tackling pensioner poverty by encouraging the take-up of entitlements. We were pleased to note that the Department for Work and Pensions is making good progress in encouraging patients to claim the pension credit to which they are entitled; however, billions of pounds lie unclaimed in the Treasury’s coffers rather than in pensioners’ pockets. Shared targets for the different agencies involved, allowing pensioners to claim linked benefits through a single transaction and focusing effort where we know that take-up is poorer might all help. The Committee is not afraid of new thinking—we seek it and welcome it when we see it—and we also welcome risk taking on the part of the Government.

I have touched on just a few of the Committee’s many reports, and they are sufficient to support our key contentions, although no doubt other hon. Members will highlight their own themes during this short debate. All members of the Committee would wish to say that we rely on our staff. I pay tribute to Mr. Mark Etherton and his colleagues for all their work, and to the National Audit Office, on which we also rely. Its dedication to enhancing scrutiny, improving delivery and support is vital.

I thank those members who have left the Committee since the last debate: the hon. Member for Rhondda (Chris Bryant), whose appearance in the Committee was so brief that he never actually said a word, yet still we welcomed him; the hon. Member for Wrexham (Ian Lucas); the Under-Secretary of State for Communities and Local Government, the hon. Member for Hartlepool (Mr. Wright); and the hon. Member for Sittingbourne and Sheppey (Derek Wyatt). It seems that they have all moved on to Government, and they doubtless toil night and day to implement the Committee’s recommendations. All its other members continue to work hard and assiduously to hold the Government to account, and I am grateful to them for making the Committee a pleasure to chair.

In July, “The Governance of Britain” Green Paper set out proposals to improve the transparency and accountability of Government to Parliament. As the proposals are debated and fleshed out, I am sure that the example of the parliamentary audit of the public’s finances has much to offer. In December, we are organising a conference—I am glad to say that the Chancellor and shadow Chancellor will be attending—to celebrate the decision taken in 1857 by the Select Committee on Public Moneys to create a Committee of Public Accounts. It was a brave decision to create such a Committee then, and it was braver still to entrust the honour of chairing it to an Opposition Member—an example that has been followed in many Commonwealth countries. Any Government might shy away from such a decision today, but they would be wrong to do so.

I am proud to chair what people generally reckon to be the most powerful Select Committee of the House. We have an effective Committee precisely because we are cross-party and always achieve consensus. Since I became Chairman in 2001, we have made 2,500 recommendations, more than 90 per cent. of which have been accepted, and produced 300 unanimous reports—we have never had a vote. We must not be too sanguine about this, because we must constantly work harder and ask ourselves whether these recommendations are being not only accepted, but implemented across Whitehall.

Our eyes will remain open and our heads will not turn the other way. On occasion, our tongues will doubtless remain sharp with senior civil servants, and they will not like it, but we shall study, with great care, progress on the massive projects that I mentioned in my opening remarks. I hope and believe that our reports will be high on the reading lists of the officials concerned. We will continue to criticise when criticism is warranted, and praise when praise is earned. That will be our ongoing contribution to ensuring that the Government are a better servant of the people. I commend the motion to the House.

I shall be brief because I want to touch on only two specific issues, but it would be remiss if, before I attended to them, I did not congratulate my colleague, the Chairman of the Committee, with whom I have had a good working relationship as a senior member. We understand each other’s thinking very well. I should also say how much I value his commitment to the Committee. The same must be said for my other Committee colleagues. Not many Committees have to cope with 60 pages of briefing twice a week and it takes a great deal of dedication to put in the time that they do, with as much enthusiasm as they have.

I, like the Chairman, express my thanks to the National Audit Office for the quality of its reports, and for the service and benefits that it provides to the taxpayer. Each year, it saves eight times its annual budget, and that will increase to nine times next year. I cannot think of anyone else who can claim a record equal to that.

I have touched on both of my two issues before, so these are follow-ups. I want to know what is happening in each area. In our previous debate, in April, I raised the issue of child obesity. We were told that schools are weighing children every year and checking for signs of obesity. The local health authority, the council and Departments could be told about problems, but we were astonished to find that parents could not. It was ludicrous that the relevant advisory committee described it as unethical to tell the parents, because back-up facilities in the community might not be available. That sounded more like a cover-up than a logical explanation. When I last raised the matter, I received a friendly and understanding response from the Minister. It was followed by a letter from the Department in which it indicated that it took the same view as the Committee—that parents had the right to know—and that it would take steps to introduce such a requirement. Months later, however, I still do not know where we are. On the 8 o’clock news the day before yesterday, it was suggested that Ministers might make some recommendations on the issue. When the Minister replies to the debate, will she be able to provide some up-to-date information?

My other issue is strongly shared by all members of the PAC—indeed, by everyone who has ever been a member as far as I can remember: the BBC, which is the beneficiary of a tax on virtually every household in the country, is the one public organisation in receipt of taxpayers’ money that is not accountable to the National Audit Office and, therefore, to the PAC.

The Government, for some misconceived reason, say that the BBC cannot be audited because that would imperil its independence. That was repeated at our hearing in June. I put it to Mr. Peat from the BBC that

“your grounds for objection in the past”—

to such oversight—

“have always been fear of interference in editorial independence.”

He agreed:

“Yes, there must be no perception of any risk to that independence.”

I pointed out that the BBC World Service had been accountable to the NAO and the Committee for decades and that the last time representatives appeared before us I had asked the accounting officer whether, in her many years in the job, she could recollect any occasion on which the NAO or PAC had tried to interfere in editorial content. She said no, but that did not seem to matter to the BBC.

Does my right hon. Friend agree that if a Government agency or an aspect of the operation of this House declined to be independently audited, the BBC would be the first to run a programme exposing it?

Yes, and the Sharman committee was set up to examine Government agencies that were not answerable to the NAO. It made recommendations about Government agencies and companies that were not accountable. The Government accepted its recommendations and said that they would bring all those organisations under the NAO. They made two exceptions to the Sharman recommendations: the civil list—that was no surprise—and the BBC. The Government rejected a specific recommendation from Sharman that the BBC should be covered by the NAO, which was anomalous and illogical.

The right hon. Gentleman makes a telling point. Does he agree that it is disappointing, given the new structure established this year for the BBC Trust, that Sir Michael Lyons, who chairs it, should have rejected our overtures to re-examine the accountability of the BBC? In a letter to the Chairman and me, received last week, Sir Michael declined the opportunity of a review.

Does the right hon. Gentleman think that this subject might come up when next we see the director-general of the BBC—in, I think, December—and will he invite the Minister to explain what possible objection there can be, given that the NAO already has responsibility for auditing the BBC World Service, which is a by-word for editorial integrity?

Indeed. There is no logic behind that position, but every incoming Minister in the Department for Culture, Media and Sport—and its many manifestations over the years—has been indoctrinated by officials that they must not touch the BBC. Most people who have seen the nonsense going on with BBC financing recently would think that it is an ideal candidate for investigation by the NAO and the PAC.

Another point that I put to the BBC representative was that the NAO often solves problems, hence its record of saving the taxpayer eight times its annual budget. The BBC’s representative was not moved. I pointed out that BBC representatives appear before Select Committees in the other place and here, and asked whether that compromised its independence. He accepted that that happened, but, he said:

“I cannot think of an example where the Culture, Media and Sport Select Committee have sought to go into contentious or difficult editorial issues. Their focus is on policy.”

That almost stands logic on its head. The claim is that auditing the BBC’s finances is a danger to editorial freedom, but a Committee that has power to question policy is not. If the Government cannot see the difference, one wonders what else could demonstrate the absurdity of the situation. If it is all right for Select Committees to look at the BBC, the PAC should also have full access via the NAO. As I have said, one wonders what the BBC is afraid of; perhaps, given its financial behaviour recently, it is that the public will realise that it is not very good at management.

I put it to Mr. Peat that the situation was illogical. He said:

“My final comment will be that if Sir John”—

the Comptroller and Auditor General—

“wished to suggest at any time that there were areas where there would be benefits from NAO, which have not taken place in the past, I, as Chair of the Audit Committee, would be the first to recommend to the Board of Governors and the Board of Trustees that that should be very seriously considered.”

I asked:

“Sir John, given the opportunity, as you are now, would you ask to have the right to audit the BBC?”

Sir John replied:

“Of course”.

So Mr. Peat had his answer back in June, and we have had our answer again—a flat, illogical refusal in the letter sent to the Committee in the past week. That is not acceptable. The Government should think rationally about the BBC. It is a great institution, but it should not be exempt from the same interrogation and analysis that every other tax-receiving body faces. I ask the Minister to raise that point with her colleagues.

The right hon. Member for Swansea, West (Mr. Williams) asked what the BBC had to fear from giving evidence to the PAC, but the reaction of certain civil servants shows that it has quite a lot to be afraid of.

My first observation follows from the remarks made by the right hon. Member for Swansea, West and by the PAC Chairman, the hon. Member for Gainsborough (Mr. Leigh). It has been announced that the National Audit Office’s remit will be extended to look in more detail at how savings can be made in each Department. Given that the BBC is going through a similar process, it would seem logical that it should be subject to similar scrutiny.

I have never been a member of the PAC, but that is not necessary to appreciate its importance. I welcome the opportunity to discuss the Committee’s prolific work since it was last debated in this House. The Government place ever greater focus on efficiency savings, so it is important that they continue to set ambitious targets, with delivery being scrutinised in great detail.

When the House last discussed the PAC’s work, the hon. Member for Gainsborough spent some time talking about the capability gap—whether public bodies can deliver public services. That question is now being considered by the Government, with Departments assessing their capability to deliver what is required of them. The PAC plays a very important role in that process, as is evident from the scope of the contributions made in the debate so far.

One question in particular has emerged from the PAC’s work over the past six months, and the hon. Member for Gainsborough touched on it his remarks: who is affected most keenly by the capability gap in the delivery of public services? Very often, the people who are most in need of help are most let down, and that is especially obvious in the tax credits system. It seems that the people who lose out by being caught up in overpayments are those at the margins, the ones on the lowest incomes who go in and out of work at different levels of pay. Ironically, they suffer most when their circumstances improve.

We are considering various reports today, but I draw the House’s attention to the one that shows the scale of the problems in the tax credits system. The PAC is not alone in investigating the matter: the recent ombudsman’s report was also pretty damning, stating that HMRC

“took a very rigid approach and assumed high levels of understanding of the system in terms of whether or not it is ‘reasonable’ for someone to know they were being overpaid.”

Comments such as that contrast significantly with the Treasury minutes in respect of the PAC’s conclusions, especially where they deal with the cost of some of the proposed changes to the system and their impact on expenditure. In particular, the Treasury minutes on the impact of the proposed changes to the disregard rules state that

“there are still some uncertainties surrounding the costing. In particular, it remains the case that while the overall cost of the package is not affected by the order with which the changes are modelled, these interactions mean that the costs of the individual elements of the package are affected by the assumed order with which the changes are modelled.”

The irony is that, although the Treasury is open about its uncertainty about the impact of the changes, it expects a sophisticated level of understanding among the people who are supposed to use the system.

I am sure that all hon. Members have constituents who come to them for help with tax credits because they do not know where else to turn. Such people may have been thrown into debt after receiving a claim for overpayment that goes back over a number of years and runs into many thousands of pounds. One lady came to see me whose tax credit overpayment amounted to quite a few thousand pounds. She was doing everything that she could to meet the demand, and was even trying to save some money for her children. She told me that, for the first time, she was using for living expenses the money that every month she normally put towards child care and into a savings account.

That is what tax credit overpayments can do to people even when they try to do everything right. It seems that the system has become more important than the individual. One constituent of mine completely changed his bank account, because that was the only way to get out of the tax credit system altogether. People are taking extreme measures, and it is very worrying that, in its response to reports such as the PAC’s, the Treasury says only that it will “take note” of recommendations, rather than agree to them. I think that it should go back to first principles and agree to look at the system again, as the question goes beyond how the system is administered and what value for money is achieved. The important question posed in many reports produced by the PAC—and it is one that the Public Administration Committee looked into when I was a member—has to do with how systems are structured.

The hon. Lady mentioned tax credits, about which there have been various reports, but does she agree that one of the most extraordinary aspects is that HMRC now has a higher level of fraud and error than any other Department? The CAG has laid a qualified opinion against the accounts of the body that is supposed to collect taxpayers’ money—a state of affairs that should not be allowed to continue.

The hon. Gentleman is absolutely right about that, and the saddest thing is that the tax credits structure was set up with the best of intentions. On paper, it seems that the scheme should work perfectly and help everyone to the exact extent that they need support, but the reality is that it is far too complicated. People come to me all the time who say, “I’d rather not have any money whatsoever than be subjected to this system.” That makes me wonder whether the Government should not look at tax credits again. Perhaps they should consider a fixed-payments system, as that might be fairer to the people whom they are trying to help.

The wider theme has to do with the Prime Minister’s approach to such matters. His intentions are no doubt genuine, but the structures are sometimes so complicated that they are out of control. Other reports that we are considering this evening make that clear. For instance, the report on pensioner poverty shows that millions of pensioners eligible for pension credit still do not claim it. Some pensioners find the system too complicated, while others do not want to undertake assessment on the telephone. Yet others find that the pension credit interacts with other benefits, such as those for council tax and housing, in too complex a manner. Once again, the question to be asked has to do with whether that system is more important than the person whom it is supposed to serve.

Another problem is that the amount of bureaucracy involved will rise as more pensioners become eligible for pension credit. If 80 per cent. of pensioners become eligible for the entitlement, at what point will the Government decide that it should be universal rather than means tested? Most worryingly, the PAC report on pension credit found that certain vulnerable groups will be left behind. In theory, no pensioner living in poverty will miss out on pension credit, but the reality, especially in rural areas, is that such people are difficult to identify and to target.

The experience with other schemes is useful in that regard. For example, Warm Front was a big, national programme that was easy to roll out to assist people living in conurbations, as the index of deprivation could be used to identify whole wards where poverty was concentrated. However, it proved very difficult to pick out people living in small pockets of poverty in neighbouring wards, even though they were in as much need as those targeted under the scheme. It is important that the same groups of people are not left behind by other Government schemes.

Another theme raised in today’s debate has been the poor quality of commissioning. That has further undermined the structures adopted for Government schemes such as the ones that I have described, and it has also had implications for service and for cost-effectiveness. The PAC report into the NHS IT project showed that there had been huge cost overruns, no clear idea about the overall expenditure on the project and significant delays to important aspects.

The situation in respect of tax credits is similar. When I was a member of the Public Administration Committee, Sir David Varney talked about instituting a change in the operation of the tax credit system so that instead of payments stopping immediately when an overpayment was found there would be a three-week window to give the individual an opportunity to appeal. Sir David said that it would take a year to institute that one change in the computer programme; no doubt, since then there have been other unintended consequences that needed to be resolved.

Those examples raise questions about Departments’ experience in commissioning such services. What are the reporting standards when problems—relating to the CSA, for example—are investigated by the Department? One of my constituents had a problem with the CSA; payments had been made to the agency for the best part of two years yet she had received nothing. I wrote to the CSA on her behalf and was told that the agency accepted that there was a problem with her case, caused by some of the IT changes that had been taking place. The CSA could not tell me when, or if, it would be able to resolve the problem, but as it had written to me it assumed the matter was closed and contacted my constituent to tell her so. In how many other cases do the records show that a problem has been resolved when that is patently not so and people continue to receive a poor service? Can we be sure that the lessons are being learned? The Public Accounts Committee plays an important role in that regard.

The PAC report on consulting made a series of recommendations, which were taken up by the Government, to ensure not only that Departments know how much they are spending on consultants and that they routinely assess the value of using them, but also that they share the information so that best practice can be adopted across Departments. It is great that the recommendations have been accepted, but what is being done to ensure that lessons are learned when responsibility is pushed down to local level?

The Committee’s report on out-of-hours services made it clear that primary care trusts were not experienced enough to know what they were trying to commission. In my constituency, a PCT took on a new deliverer of out-of-hours services, claiming that it offered better value for money. The result was appalling services that were internally audited so the people commissioning them had no idea about what was being delivered. Only when the matter was raised in the House did Serco pull its finger out and start to invest considerably more in the service than it had intended. If responsibilities are to be devolved to local government, or any other local body, lessons learned at national level need to be passed on, too.

The same point applies to Sure Start, where the Committee’s report showed that there were capacity problems and that staff lacked financial capability. We need to make sure that local authorities know what is being asked of them and that it is clear from the Government’s point of view.

The capability gap needs to be properly identified and the PAC plays an important role in doing so. It often has a vital role, too, in helping to fill the accountability gap: for example, in its work on the Rural Payments Agency, because people had no way of channelling their frustration, and on the NHS. Similarly, there is no clear chain of accountability in the CSA or tax credit systems and the Committee satisfies that lack. Without the doggedness of the Committee, the Government and their Departments would be much slower to learn their lessons.

I thank the Committee for its excellent work and urge Members to continue it.

The hon. Lady talks about lessons learned. Does she agree that a common theme in many of the systemic failures, which, as she said, often affect the most vulnerable in our society, is that the delivery of schemes that were broadly approved in this place is made too complex? The CSA, the RPA and the miners’ compensation scheme are just three examples of such over-complexity. How can the message be spread across Departments that they should keep things simple? If we keep it simple, the failures will not multiply and spread as they have done, especially in IT systems.

The hon. Gentleman makes an important point. My concern is not just how the lessons are learned in new bodies in the future, but how we deal with the results of existing schemes. It should not have taken 13 years for us to realise that the CSA was in such a state that it needed to be replaced entirely. What happens about the legacy issues? Unfortunately, we cannot start with year zero; we have to work with the legacy, which is where the eminently sensible recommendations of the PAC play a really important role. As a cross-departmental Committee, the PAC can help to unravel some of the complexity so that the impact of its recommendations is felt more widely.

The Committee must keep up its excellent work; otherwise, the vulnerable individuals who seem to suffer most at the hands of a system that is not working will keep coming to our surgeries because they have nowhere else to turn.

In saying that I will be brief, I shall be unusual, and actually be brief. I did not intend to speak in the debate, except of course to ingratiate myself with the Chairman of the Public Accounts Committee, whose work I so much respect. However, I have some observations.

The PAC is the most exciting Committee on which I have ever served. I am rapidly developing my Perry Mason skills, although I am not yet quite brutal enough. At first I was nervous and diffident in the blood sport that is the lust to kill civil servants. I used to quake, but I am learning to be as nasty as the rest, and I hope it will stand me in good stead in parliamentary debates.

The experience has been exciting. The Public Administration Committee comes second after the Public Accounts Committee, and it is certainly sexier, but the Public Accounts Committee is the best one to be on. There are a few problems, however.

We never get to grips with the people who make the mistakes and fail in their performance; the perpetrators disappear. In business, when someone makes a disastrous mistake they are richly rewarded with a golden handshake and sent into retirement, to start their own company—or some other symptom of failure—but we do not even have a system for sending failures in the public service to run power stations in Cleethorpes, which would be a profitable and interesting occupation. There seem to be no sanctions, and we are not getting to grips with the people who make mistakes. As the Chairman said, it would be useful if we could examine the accounting officer under whose aegis the mistake was made. We cannot do so, which is infuriating.

Equally infuriating, many of the mistakes are made by politicians and parties—by us. In this era of 24-hour news coverage, there is a tendency to govern by initiative. We constantly announce new initiatives, approve them in this place, because they are obviously common sense, and rush them in. The Child Support Agency had near unanimous support in the House, as did some of the other developments that have gone so disastrously wrong. Initiatives are rushed in with a chorus of approval and pushed on to Departments by Governments—Governments of both parties, although we are a fairly initiative-prone party. New Labour is more initiative-prone than old Labour and, if the Conservatives ever get back to power, they will probably go in the same direction.

As I tried to intimate in my intervention on my Chairman’s speech, the problem is that civil servants do not stand up to Ministers and say, “This can’t be done with these resources. We need more staff. We can’t do this when the Gershon process is firing and getting rid of the people whose skills we need, whose contacts we have and whose experience we want to mobilise on this project. We can’t do it without our existing computer systems.” I know that there is a problem in the sense that the wool is too easily pulled over the eyes of the civil servants by the salesmen from the super computer companies.

I am not looking at my hon. Friend with malevolent intent. The big computer and IT companies seem able to sell quite extravagant and unnecessary systems.

My hon. Friend is right to draw out the theme that very senior civil servants do not resist the undeliverable wishes of politicians. That might, apply—poetically—to the National Audit Office itself, which is sucked into the snake-oil attractions of things such as the private finance initiative, and draws its teeth before writing critical reports of projects associated with that initiative. The NAO is not free from blame in that respect, is it?

I cannot accept that accusation from my hon. Friend, although I accept most of his accusations against other organisations. We agree fairly substantially about them. In a sense, the NAO was too soft in the early stages about the private finance initiative, but it then gradually began to get tougher as it got to grips with the issue. In demanding that the savings from the selling on of PFI debt be paid back to the public sector, it has shown that it has more teeth and is able to deal with the issue. Perhaps it was a little too welcoming at first, but it now has the situation under control. This is a learning experience for all—for the NAO as well as for us.

I therefore acquit the NAO of my hon. Friend’s accusation. Its reports are very cautious and one has to understand their language and read through them. Sir John Bourn tends to hint at things rather than come out extravagantly and say, “These people are making a terrible mistake. It’s an absolute disaster!” Instead, we have a mild response in the report, but that is inevitable. We are working in that kind of atmosphere, and it is up to us as politicians to put the political punch into it and start laying the blame and throwing the accusations around. It is not up to the NAO. Let us not be critical of it.

I am critical, however, of the unwillingness of civil servants to stand up and say, “This won’t work,” or, “It can only be made to work with a lot more extra spending.” The rural payments were a classic instance of that. Ministers, with support from the farmers, went for the most complicated system. It was a system that nobody else used, and I do not know why we went for it. By that time I had come off the Environment, Food and Rural Affairs Committee, but my hon. Friend the Member for North-West Leicestershire (David Taylor) might be able to tell us the answer. Politicians went for the most complex system, and it was pushed through at a time when the Rural Payments Agency was getting rid of staff who had close contact with the farming industry and knew the people in their area. Those staff were being fired, but subsequently had to be brought back, because the agency could not do the job.

Fortunately, the agency’s head eventually appeared before the Committee and gave quite a good account of himself, although I still think he was wrong. He sent monthly reports to Ministers saying, “We’re on course and things are on line to start the payments.” Then he began to put more weasel words in and said that the agency was not quite ready. Then, finally, the total disaster emerged. However, he did not, at the start, say to Ministers, “We can’t do it with these staffing levels; we can’t do it and get rid of these people; we can’t do it on the basis of the regional structure that we have.” He did not say that, but he should have done. The Chairman of the Committee said that making such comments would have been career-limiting—and so it would. But presiding over disaster is even more career-limiting, and it is necessary to point that out.

I have criticised civil servants by saying that they do not have the commercial skills to negotiate better deals on PFIs, and that is certainly true at local government and hospital level. There is a Treasury team to advise them and put backbone into them, but it cannot do everything and go all over the country.

I criticise civil servants in that regard, but perhaps the hon. Gentleman is going to criticise me.

I am interested in what evidence the hon. Gentleman has for his assertion that presiding over a disaster is career-limiting. After all, the permanent secretary at the Home Office, Sir John Gieve, presided over such a mess that its accounts were presented to Parliament unaudited. His punishment for that was to be promoted to be deputy governor of the Bank of England in charge of financial stability in the banking system, which of course was to the fore when we had the Northern Rock fiasco. That is the sort of thing that we might expect to find in Gilbert and Sullivan, but not necessarily in real life.

The Northern Rock of ages was well cleft for him. I was really rebutting the point made by the Chairman of the PAC that it would be career-limiting to stand up to Ministers. It is essential that that be done; otherwise everybody is left with egg on their face. Let us not say that it is career-limiting to preside over disaster; let us say it is career-changing and possibly a path to promotion.

My hon. Friend is most generous in giving way again. As one of the two rapporteurs on the RPA disaster for the Environment, Food and Rural Affairs Committee, may I cite another example to the hon. Member for South Norfolk (Mr. Bacon)? At the time of the disaster, the permanent secretary to the Department for Environment, Food and Rural Affairs, Sir Brian Bender, was seamlessly moving onwards and upwards, almost without trace. That is a another classic example.

Order. I am sorry to interrupt the harmonious dialogue between two hon. Members, but I am struggling to understand which report is being discussed. We do not actually have a report on that subject. It is fair enough to develop a general point about the competence or otherwise of civil servants, but we are not debating the report on the Rural Payments Agency.

I am most grateful to you, Mr. Deputy Speaker. I was talking about the report on the Rural Payments Agency, but I shall now proceed to talk about the reports on PFI contracts and Government consultancy contracts that are within our purview today.

The report on consultants, in particular, shows a much more critical attitude to civil servants on the part of Government than I would want. We have a fine civil service in this country, but it has been downgraded—first by the Conservative Government, whose leaders had a path in their heads and imposed things on the civil service, and then by us, who did not quite trust civil servants. The result has been that instead of taking policy advice from civil servants, the Government prefer to have the imprimatur of outside consultants, at enormous expense. What the second report—there was an earlier one in 2002—shows is the enormous fees paid to consultancies, and as we all know, consultancies are a system for telling us what we wanted to hear in the first place.

And for recommending their friends to carry through the execution of the project. That is the procedure. Our report showed that the Government were making excessive use of consultants and pointed to the need to build up expertise in the Departments rather than handing work out to consultants. It is a question of respect for the civil service.

I said that I would be brief, but all the interruptions have made me take a detour for what seems like the past three quarters of an hour. I shall conclude with a couple of observations about the way in which we deal with the reports. Perhaps it is the geriatric in me, but I find our procedures a bit confusing. A National Audit Office report comes out, and we have a session on it. We then write a report, and when it is finally published, we get telephone calls from people asking us about something that we have totally forgotten about. The procedure is not seamless; it is not well knit together. There is not a stage at which we can really produce a conclusive report on an issue.

The second problem is that, as I said at the beginning, in all our proceedings we are not actually dealing with the people who made the mistake—the people who took the decision. If we are to produce an effective report, we need to know what happened to them. We need to know whether any sanctions were imposed on them, or whether they took a seamless path to promotion, as my hon. Friend the Member for North-West Leicestershire put it. As Virgil said,

“facilis descensus Averno…sed revocare gradum…hoc opus, hic labor est.”

That is, it would be difficult to pull those people down again. We, as a Committee, need to know what happened to them, and whether any sanctions were imposed on them. However, the Committee should be able to acknowledge that many of the mistakes are ours; they are made by politicians, and result from our not thinking a project through before we ask the civil service to implement it.

It is a pleasure to take part in the debate. I have been a member of the Committee for six years, and have seen a number of common themes emerge. I want to address just a few of those themes, with particular reference to the reports mentioned in the motion.

The first issue that I shall deal with—I hope that the Exchequer Secretary to the Treasury will address this point in her reply—was touched on by the hon. Member for North-West Leicestershire (David Taylor) in his intervention on the hon. Member for Falmouth and Camborne (Julia Goldsworthy). The question is: what is the centre doing to make sure that when projects are spread out across Whitehall Departments and agencies, things actually happen? Obviously, there is inherent tension between avoiding a situation in which the Treasury is too involved, and tries to micro-manage matters that should be the responsibility of Departments, and avoiding sitting back and watching a Department make a mess of things with the taxpayers’ money given to it by the Treasury.

I have not had the pleasure of being a Treasury Minister and being vexed by such issues—although I am sure that that is something that history will correct in the fullness of time. I am sure that Treasury Ministers worry very much about that tension between the centre and departmental responsibility. The tendency has been to let Departments sort things out. Some years ago, there was the fiasco of the individual learning accounts—an adult training scheme with great intentions, which was designed to help the most vulnerable, and which failed miserably. I remember thinking, “Where was the Treasury?” Similarly, in the case of the Rural Payments Agency—although I respect the fact that we are not talking about that issue today, Mr. Deputy Speaker—it was for the Department to sort out the issue. The Treasury left the Department to it, and left it to bear the financial brunt, too.

The Paddington health campus scheme was the subject of our ninth report, and at the time I found myself thinking about not where the Treasury involvement was, but where the Department of Health involvement was, in relation to the local strategic health authority and the local hospital trusts involved. The ostensible purpose of the scheme was to merge the St. Mary’s NHS Trust and the Royal Brompton and Harefield NHS Trust. However, as conclusion (i) of our report said,

“The Paddington Health Campus scheme, as proposed…was based on an inadequate Outline Business Case, constructed without the benefit of input from doctors and nurses as to the required clinical content.”

We went on to say, in conclusion (iii), that

“It took several years after the initial outline business case for the Campus partners to reach a clear position on the clinical content of the Campus, the land required, the planning constraints and the likely cost and affordability of the scheme. The scheme’s development was also handicapped by insufficient manpower and capability. NHS Trusts taking forward building schemes should have early external assessments…of their capacity to deliver complex schemes and firm timetables against which they can measure progress.”

The Treasury minutes responded:

“Trusts are advised to appoint a dedicated full-time project director and DH has established specialist Project Director’s courses at selected universities. Proven, high quality Project Directors are also deliberately moved to new schemes so hard won experience and expertise is not wasted.”

That is all very good, and I think that we all say amen to that. However, the question is this: the Government may think that it is good to have full-time project directors, and that they are necessary for delivering projects successfully, but are they actually acting on that in practice?

That brings me to my second question, which is not so much about the centre versus the local, but about whether we are getting the basics right, at whatever level. Our 14th report was on delivering digital communications through the Bowman programme. That was a so-called combat infrastructure platform—a battlefield communications system. The project was inherently complicated, because it sought to make sure that all the different players in a battle, whether they were battle tanks, infantry or air support, could talk to each other, and to HQ, and all that had to be delivered properly. It was an extraordinarily complex project, yet it did not have a senior responsible owner. It was not that the senior responsible owners kept changing, as we have seen happen in many projects; there just was not one at all. As our report concluded,

“There is no individual within the Department with full responsibility for ensuring that the Bowman CIP”—

combat infrastructure platform—

“project meets its objectives. In 2006, the Department belatedly appointed a senior officer to act as Senior Responsible Owner. But he lacks the authority and time to effectively discharge this onerous responsibility and is only supported by a small staff.”

The Ministry of Defence, and subsequently the Treasury in its minutes, concluded that that was an omission, and that:

“It is the Department’s policy that large and complex projects or groups of projects have a Senior Responsible Owner appointed on behalf of and accountable to the Defence Management Board.”

It is a good idea to have project directors and senior responsible owners in charge of projects, but even if a senior responsible owner is in charge, is that enough? It would appear not, because our first conclusion in our 27th report on IT-enabled business change, which was referred to earlier, was:

“A fifth (21 per cent.) of Senior Responsible Owners of mission critical and high risk IT-enabled programmes had not met with the nominated Minister and a further 28 per cent. met the Minister less than once a quarter. For these major high risk undertakings to succeed, Ministers need to be briefed fully and candidly at least quarterly on risks, progress and cost escalations”.

In its reply, the Treasury states:

“Ministers and Accounting Officers should, in particular, be briefed when there is significant deviation from the programme or project plan—that is, where there is more than three months slippage”.

I am bound to ask, why should Ministers not be briefed all the time? Why should they be briefed only when there is slippage? Should not Ministers know what is going on in mission-critical projects all the time, whether they are going well or not? Why do Ministers not say, at an early stage, “Why don’t you have a senior responsible owner?”?

I remember talking to a Minister who was involved in one high-profile case that the Committee considered—a typical IT project that had gone wrong. I am sad to say that that Minister resigned, because he had the wisdom to vote the right way on the Iraq war—that is to say, against—and he could not do that and support the Government policy of the day. I am glad to say that his career has been restored now; he is actually in the Cabinet, so that may give hon. Members a clue as to who I am talking about. I remember him saying, in respect of a particular project, “I sat in a room, having listened to what people said, and having read about the matter, and I said, ‘This isn’t going to work, is it?’” He said that there were 12 people in the room—civil servants and consultants—and they all said, “Oh yes, Minister, it will work.” He said that there was no one in the room who said, “Well, actually, no. You’ve got a point; there are some serious concerns.” There was no critical friend at court to make sure that the concerns were given a serious airing and had a serious voice, and as a result, he signed off the project. Of course, his instincts and concerns were absolutely right, and the project hit the buffers, just as so many others do.

In another case, I was talking to the senior computer contractor from a major firm which has been involved in many of the projects that we have examined, who was desperate to talk to the Minister to find out how to resolve an impasse and get some clarity on direction, and finally begged the Department for a meeting with the Minister. Within 10 minutes of that request, the permanent secretary himself was on the phone saying, “You don’t talk to Ministers. We talk to Ministers.”

If I were a Minister—as I mentioned to the Exchequer Secretary earlier, she does not seem to think that that is likely, but in the fullness of time I very much hope that we will have the chance to put into practice some of the things that we are talking about. It seems to me essential for Ministers to find critical friends at court, who would tell them not what they wanted to hear, but what they did not want to hear. I am sure that the more intelligent and switched-on Ministers do that. There is also the problem, as we heard earlier, of civil servants not being able to get the access that they require to Ministers, as we heard again in the context of the Rural Payments Agency.

In relation to the 27th report, there was one answer from the Treasury that I thought was particularly interesting. We said in our conclusion (iii) that

“over half of Senior Responsible Owners (SROs) are in their first SRO role, and nearly half spend less than 20 per cent. of their time on such duties.”

Lack of time was a key factor in some of the other projects that we looked at. We went on to say:

“Lack of relevant experience, combined with a regular turnover of post-holders, adds unnecessary risk to the management of IT-enabled change.”

We said:

“To address these issues, departments should appoint a Senior Responsible Owner at the outset of an IT-enabled business change on the presumption that he or she will remain in post until the programme or project is delivered, with performance and reward linked to agreed targets and milestones.”

I shall not refer to the RPA, as that report is not under discussion, but I worked on major IT projects for almost 30 years before coming to this place. Does the hon. Gentleman agree that one of the common themes with major IT project failures is that the client Department needs to be an intelligent client, and it cannot be an intelligent client if it outsources virtually every aspect of the development of computer systems? It needs to have its own internal trusted, experienced people, who can balance out the glowing reports given by the would-be supplier of the software.

I completely agree. I remember the then chairman of the Inland Revenue, as it was then, Sir Nick Montagu, fiercely denying what was plain to everybody else—that the Inland Revenue had ceased to be an intelligent client, because so much of its sourcing function and its buying function was spread out among different consultancies that it was only one or two of the consulting firms that had an overview of what was going on. The Inland Revenue was no longer capable of answering the intelligent questions that one wanted to ask, because too much of its expertise was outsourced.

I was talking about the appointment of a senior responsible owner, and the presumption that the SRO would remain in post until the project was seen through. The interesting thing was the Government’s answer in the Treasury minute, in which the Treasury says:

“The Government agrees that continuity of leadership is of critical importance”.

That is in paragraph 11, on page 3 of the minute on the 27th report. However, the next sentence states:

“Although the natural progression of civil servants between roles may mean that a project has more than one SRO during its lifetime, the expectation should be that the SRO should change only when absolutely necessary, at appropriate stages to allow an orderly handover, and that the SRO will not move on until a replacement has been put in place.”

That is common sense, but why does the natural progression of civil servants between roles mean that a project should have more than one SRO? Why should not the SRO finish the project, deliver it and then get the natural progression to the next post in their career? Unless and until they have completed the project, they should not have a natural progression. If that means paying civil servants more in post, so be it.

I know that I am not talking rubbish about this, because I have heard Sir Peter Gershon, and before him various other civil servants, talking about the need to reward civil servants who stay in post to see projects through. Yet here we have the Treasury saying

“the natural progression of civil servants between roles may mean that a project has more than one SRO”.

I say that the SRO should see the thing through. The project should be short enough for one SRO to deliver it. It should be done in bite-size chunks that can be delivered. That is one of the central problems that we face in getting an improvement across Government.

Does the hon. Gentleman think that one of the reasons why civil servants may move on is that projects tend to overrun for so long that if they stayed for the duration, civil servants might be claiming their pension by the time the project was finished?

The hon. Lady probably has a point. No matter where a project stands and how well developed it may or may not be, the culture of the civil service says, “Come on, Carruthers, your two and a half years are up. It’s time for you to get some more experience. You’re going to be transferred to the Cabinet Office”— or to stamping passports in Tristan da Cunha, depending on how well or badly he has done. That is valued more highly than the delivery of a project. I do not think that the delivery of a project has enough value inside Whitehall.

There is an explanation for that, which is unfortunate. Delivery of a project is not what causes civil servants to do well, because in a Darwinian sense it is not highly enough valued. What is highly valued is the ability to get Ministers out of a hole—I do not blame the present Government; I think this is universal with Governments of all parties—and to help Ministers explain why things that look like a disaster are “the best that we can possibly have done, considering the difficult combination of circumstances with which we were faced, Minister.” A civil servant who can do that will prosper. That is the fault of politicians, not civil servants.

That is a scandal. We must start changing the culture and valuing the delivery of projects, and that requires changes on the part of politicians, so that Ministers are not trying simply to grab a quick headline, but to deliver commitments and see them through. That is probably as difficult for the present Labour Government as it will be for a future Conservative Government. It is a fundamental and inherent problem in delivering good government.

I shall refer to one more thing in the Treasury minutes on the report. We had said in recommendation (ix):

“The Office of Government Commerce and the Delivery and Transformation Group have not had the power to halt failing programmes and projects. The Treasury’s new Major Projects Review Group will however be reviewing all new business cases for high risk or mission critical programmes”.

For some years I have wanted to see some central capacity—some power at the centre— to say, “You’ve failed. No more money. We’re pulling the plug.” It seems obvious that that power should sit in the Treasury, but the Treasury minute answering that point, paragraph 21, says not that the Treasury will have that power, but rather:

“The Government agrees that the MPRG should make it clear to Departmental project owners what they need to do to address its concerns.”

There is enormous fear of greater interference. I appreciate that there are people saying that there is too much interference from the centre with Departments, just as there is from Departments down across the country—but one of my first points, which I hope the Exchequer Secretary will address, is whether the balance is right. We do not want huge amounts of intervention. We want the right intervention and the right power at the right time at the centre. I am not convinced that we have got that balance right.

My next point, which is related, is that the same problems occur again and again. In our 31st report on the Government’s use of consultants is a good example. We said in recommendation (ii):

“Departments and OGC do not routinely know how much money is spent on consultants”,

in recommendation (iii):

“Consultants are often used when in-house staff have the necessary skills and are less expensive”,

in recommendation (iv):

“Departments do not routinely assess the value of the work they receive from consultants”,

in recommendation (v):

“The capability of departments to be intelligent customers”—

the point made by the hon. Member for North-West Leicestershire—

“is weakened by insufficient sharing of information on consultants’ performance”,

and in recommendation (vi) that

“40 per cent of clients consider they have used consultants when it was not necessary.”

We said in recommendation (viii):

“Departments do not regularly plan for, or achieve, the transfer of skills from consultants to their staff to build internal capabilities”

and in recommendation (ix):

“Some consultant charges lack transparency”,

and so on.

The interesting thing is that not only were all those recommendations and the themes relating to them clearly identified in our Committee’s 2002 report on better value for money from professional services—we make this point in our recommendation (i), which the Treasury refers to in its minute in reply on page 31—but the Cabinet Office identified those problems in a study which its own scrutiny unit did eight years previously, in 1994. It stated clearly that the Government were poor at identifying when consultants should be used, poor at appointing them, poor at project management during the process, poor at transferring skills to in-house staff and poor at learning lessons for the future.

None of this is new at all, which is why I asked the Exchequer Secretary about the tension between the centre and the local and the centre and the Department, and about whether, without being heavy-handed or bureaucratic, things can be done to improve that balance. I hope that she will find time to address that issue specifically.

I have been reading Michael Barber’s book “Instruction to Deliver”, in which he discusses the need to improve Departments’ performance, in an environment in which the Treasury would not co-operate. He refers to Sir David Normington, who is now at the Home Office, telling him about the problems that he would face. The Treasury would shut him out, permanent secretaries would neither talk to him nor give him information and he would not be able to get to the Prime Minister—then Mr. Blair—because the policy unit would be in the way. That meant that he would probably be finished before he even started, so he had to think about how to get round the situation. He proposed a series of simple measures and behaviours to be adhered to—including, by the way, abolishing the delivery unit after a few years. He thought that that would help to improve its performance, and I think that in some ways it did. The whole story illustrates a vexing and long-term problem in the nature of how we govern ourselves, and I would be interested in the Exchequer Secretary’s thoughts on that.

Finally, I want to say a quick word about the BBC. I see no good reason why it should not be subject to the same degree, quality and type of scrutiny as other bodies that undertake public expenditure. The criticism that it, an important national institution, has come in for recently may be down to the fact that it has not had enough of the right scrutiny early enough. I am sorry that the hon. Member for Falmouth and Camborne is no longer in her place, because a good example of BBC extravagance took place in her constituency, when Dame Ellen MacArthur arrived back from sailing around the world. We are all familiar with BBC producers turning up to cover the same event; I have asked people, as a party game, how many BBC producers they think turned up to cover the return of Dame Ellen. They usually say five, 10, 15, 20 or even 30—but in fact 64 BBC producers were there. With the best will in the world—

Order. The hon. Gentleman is going a little far from the brief that is before the House; I suggest that he steer his way back.

I shall steer away from those rip tides, Mr. Deputy Speaker, but I hope that the Exchequer Secretary will think about that issue, because I know that other Members, including the right hon. Member for Swansea, West (Mr. Williams), are concerned about it.

I shall make one other point before concluding. The Public Accounts Committee’s 20th report on the national programme for IT stated on page viii:

“We are concerned in particular that iSOFT’s flagship software product, ‘Lorenzo’—on which three fifths of the Programme depends—is not yet available despite statements by the company in its 2005 Annual report that the product was available from early 2004.”

The software company said that the product would be available, but still it was not. Paragraph 33 of the Treasury response stated:

“The Lorenzo product is expected to be available during 2008.”

I will not dwell on the issue, because I am a bit bored with making well-researched and informed speeches on the national programme for IT in the health service, only for Ministers to say things that are manifest nonsense. I shall not encourage the Exchequer Secretary to say something that is probably not true; all I ask is that she, or one of her colleagues, will come to the House to inform us when the Lorenzo product becomes available. I do not think that paragraph 33 is true; time will tell us that.

I said that I would refer only to paragraph 33, but I should also refer to recommendation 4, one of the most important of our report. It stated:

“In view of the slippage in the deployment of local systems, the Department should also commission an urgent independent review of the performance of Local Service Providers against their contractual obligations.”

The purpose of that recommendation was to help the Treasury and central Government in their battle against computer contractors. Such an independent review would show that the local service providers had failed in respect of a whole panoply of contractual obligations into which they had entered, and make it much easier to unravel the contracts without huge cost to the taxpayer.

It is a great pleasure to follow my hon. Friend the Member for South Norfolk (Mr. Bacon), who confirmed his six years’ experience on the Public Accounts Committee. That considerably outweighs mine; I have just had my first anniversary.

I have also enjoyed serving on the Committee. I have come to appreciate the value of its work in identifying management failings in the public sector—whether they involve value-for-money or efficiency issues. We have heard many such failings rehearsed by hon. Members this evening.

I should like to highlight one particular aspect of the Committee’s effectiveness which I have noted from a number of our evidence-taking sittings. It appears that the threat of a National Audit Office investigation followed by a PAC report can have an electrifying effect on the relevant Department or agency. When the permanent secretary or chief executive of the agency come before us, they quite regularly seek to respond to our questions by pointing out what improvements they have made since the National Audit Office report was written.

As the hon. Member for Great Grimsby (Mr. Mitchell) said, there is a considerable delay between the publication of the NAO report, our meeting to discuss it, the publication of our report and the publication of the Treasury minute. During that whole period, the Department or agency concerned is under a degree of scrutiny. In many cases, their ability to point to improvements resulting from what has been flagged up in the initial investigation is remarkable. That is clear evidence of the effectiveness of our Committee, and I doubt whether other Select Committees have such an effect; I am sure that they do on some issues, but not as frequently as ours does.

The Committee also occasionally has an electrifying effect on Ministers, who, although they do not appear before us, can make policy adjustments as a result of our conclusions. Sometimes, such measures include the ultimate rectification, which may lead to the scrapping of the initiative or the agency—we have even seen the scrapping of a Department in the past year or so.

I should like to give two specific examples of the effectiveness of our work. The first comes from the 11th report on supporting small business, published on 6 February this year. The Small Business Service was formed in 2000 as an executive agency within the Department of Trade and Industry. On 19 June 2006, a month before I joined the Committee, the PAC took evidence following a highly critical NAO report, which had identified 265 separate funding streams within the Small Business Service. They were included in a total of some 2,500 business support schemes promoted by various branches of the Government. The then Chancellor had spotted that that was a potentially inefficient way to help business, and in the 2006 Budget he announced an initiative to reduce the schemes to a mere 100.

In autumn 2006, the decision was taken to reform the Small Business Service, which has now been reconfigured as a policy unit within what was then the DTI, with 50 core staff—some 10 times fewer than in 2004, when it employed more than 500 people. Since the publication of our report, the Small Business Service has been rectified out of existence and ceased to have executive agency status. On Monday, I looked at the website of the Department for Business, Enterprise and Regulatory Reform to see how many schemes were still in operation. The Minister may well be on top of this, but she might be surprised to know that of the 2,500 original schemes, 2,497 were in operation, despite the Chancellor’s proposal to reduce the figure to 100. She may like to comment on that in her closing remarks.

This morning, I had a meeting with representatives of the Engineering Employers Federation for the west Midlands. During a wide-ranging discussion of support measures for business, one of the messages that came out loud and clear was that there is still considerable confusion about the provision of advice from Government to business. There is a plethora of advisers and schemes but a shortage of cash to help business with the promotion of their endeavours, whether domestically or internationally through exports. I encourage the Minister to consider the proposals in the pre-Budget report to change business taxation, because another message that came across loud and clear is that the changes to capital gains tax, supplementary business rates and increased corporation tax rates for small business are extremely unwelcome in that sector. Taking some advice from the business community on those measures, alongside work through the plethora of schemes that I mentioned, could well have much more impact on promoting small business. I hope that the Minister will consider that.

The second report of our Committee that clearly had an impact was our 37th report on the Child Support Agency and the implementation of the child support reforms. The failures of the CSA have been well rehearsed in this Chamber over many years. The Government have now decided to replace it, and introduced legislation to do so in June this year. They had looked at the Committee’s conclusions, and I think that we can take some credit for helping to identify failings in three specific areas. The first of those concerned the identification of uncollectible debts. As we know, the CSA has some £3.5 billion of debts from non-resident parents. The Committee identified, through the persistence of our questioning, that of that amount £1.9 billion is deemed to be uncollectible, partly because the debts were attributed to non-resident parents as a device by the officers involved to try to frighten them into making a contribution by putting a debt on the system which could subsequently not be taken off because of IT incompetence. The system’s inability to correct that anomaly was one of the fundamental reasons why it was decided to scrap it.

The second area concerned the backlog of cases stuck between the different phases of the system, where progress was being made but it was painfully slow. More than 100,000 cases remain stuck, and nothing can be done. The third area concerned our pointing out the effectiveness of similar schemes in other countries, particularly Australia. In our conclusions, we identified the effectiveness of the Australian system in providing access to personal tax information on non-resident parents as being an effective way of establishing their genuine income rather than their claimed income. I believe that the Government have taken that on board in the legislation they have introduced and there will be access to information held by Her Majesty’s Revenue and Customs. I welcome that.

I should like briefly to touch on a few other reports to highlight some of the areas where we have been helpful or could be helpful to the Government in looking at ways to improve delivery of public services. In March this year, our 13th report on smarter food procurement covered a whole range of aspects of Government procurement designed to provide not only efficiency in the use of public money but other policy initiatives. We have heard about the importance of healthy eating as a means of trying to address public health among children in schools, including in relation to obesity. The public sector could play a much greater role in encouraging the health of our children and young people.

More effective procurement can lead to direct cost savings for the agencies involved, as well as much wider social and economic benefits. That does not apply only to health. With the advent of bluetongue disease, which now covers most of southern England, a major role could be played by Government Departments, especially the Ministry of Defence and other major procurers of large quantities of meat products. If they were required to buy British meat, as opposed to importing it from other countries, that could have a significant impact on improving the lot of British farmers who are suffering all over the country.

That brings me to our 32nd report on the Department for Environment, Food and Rural Affairs, where we looked at rights of access to open countryside. As a result of persistent questioning through our Committee when we met last November, we established for the first time that DEFRA budgets had been cut across the piece as a means of paying the fine that had been imposed as a result of the Rural Payments Agency fiasco. Although the amounts of money in relation to this particular programme were quite small—just over £1.1 million had been cut from that year’s budget—it was the first time that I had been aware that the Treasury was seeking to resolve the payment of the fine by slicing budgets across its programmes. Harking back to the comment about who gets rewarded or suffers the consequences following failures within Departments, I remind hon. Members that not only civil servants get rewarded for abject failure, but Ministers too. The Secretary of State at DEFRA at the time of the RPA fiasco was subsequently promoted to Foreign Secretary.

Our 19th report was entitled “A Foot on the Ladder: Low Cost Home Ownership Assistance”. We discovered through our questioning that very little information had been available on the effectiveness of measures to encourage low-cost home ownership or on what happens after funds are deployed to help people to get their first foot on their housing ladder. That is another example of persistent questioning in our Committee encouraging officials to respond appropriately to the relevant criticisms that have been made. The Treasury minute in relation to our suggestions confirmed that it would accept most of our recommendations—for example, on measuring how many households had increased their proportion of ownership after the initial purchase of an interest in a shared equity mortgage property, on how often the purchase of a property through one of these schemes helps to free up social rented housing elsewhere in the locality, and on the effectiveness of the help provided to key workers in seeking to get them housed in areas close to where they work. The Government could also learn lessons from advice from other quarters on how to encourage home ownership. My hon. Friend the Member for Tatton (Mr. Osborne) has made some significant proposals to abolish stamp duty, which would have a dramatic impact on encouraging first-time home ownership.

The last report I shall touch on, which was referred to by others, is the 22nd of the Session, the tax credit report published on 9 May. We have been taking evidence on tax credits from the chairman of the Inland Revenue and it is clear from what he has told us that the whole edifice was originally constructed with a significant amount of error—I do not say fraud—in prospect. The Revenue’s accounts have not been signed off by the Comptroller and Auditor General as a direct consequence of that programme, and the extensive fraud and error that it is not able to quantify. It is the case that 2.8 million people have either been overpaid or underpaid tax credits—32 per cent. of claimants as of the latest year end available, 2005-06.

The chairman admitted that a high proportion of errors were designed into the scheme from the outset and I do not need to remind the House that it was the then Chancellor of the Exchequer who designed it. The chairman was unable to quantify precisely how many errors were anticipated but accepted that the complexity of the scheme meant that errors were likely, with individuals having to notify the Department of changes in circumstances each time that they happened.

On a point of clarification, or correction, the accounts were signed, but subject to a qualified opinion. What does my hon. Friend think that it says about the economy, effectiveness and efficiency of tax credits that some of the people who ought to benefit most from them have said, “I want nothing more to do with this, even if it means I’m financially less well off”? What kind of a welfare system evokes that response?

My hon. Friend, along with most other Members, will have had countless constituency cases where, as a result of some of the errors inherent in the system, some of the most vulnerable in our society have been encouraged to repay substantial amounts of money amounting to thousands of pounds. When such errors occur, it undoubtedly shakes the confidence of those individuals in the quality of our benefit system. It is no surprise to hear that some people would rather wash their hands of it.

Another thing that came out of inquiries into tax credits was a lack of transparency in Government when introducing the scheme. The income disregard was increased in the 2005 Budget from £2,500 to £25,000, and at the time I recall that very little, if any, information was provided by the Treasury on the financial consequences of that. An overall number was put into the Red Book, which was an agglomeration of different aspects of the benefit changes involving tax credits, but that particular income disregard was never specifically quantified, and it was only as a result of persistent questioning by our Committee that the Treasury was prepared to come up with the estimated cost of the disregard, two years later. That is a sorry state of affairs, because it had clearly made the calculation but was not prepared to make it public at the time, presumably for reasons of political embarrassment. Again, that demonstrates the value of the Committee in holding not just Government to account, but their officers and organs.

This has been an interesting and useful debate, and I congratulate all hon. Members who have taken part. Through my hon. Friend the Member for Gainsborough (Mr. Leigh), the Chairman of the Public Accounts Committee, I would like to congratulate the Committee on its valuable work. Increasingly, an important part of the scrutiny function of this House falls on the shoulders of the Committee, and it discharges that role extremely well. It will become a more significant role in the future as the effective and efficient delivery of public services moves to the centre stage of the political debate. The reports of my hon. Friend’s Committee are essential reading for anyone aspiring to Government and who recognises that delivery is the key measure by which this Government and future Governments are judged by the electorate.

The Committee has been instrumental in identifying billions of pounds of waste and inefficiency: £6 billion of tax credits overpaid because of complexity built into the system, with £500 million already written off and another £1.4 billion likely to be uncollectable; £500 million relating to the CSA project; £500 million wasted on the misuse of consultants; and as my hon. Friend made clear earlier, the Committee’s eye is very much focused on the £9 billion Olympic budget, and the potential issues that may emerge there.

My hon. Friend referred to the salutary effect that the prospect of appearing before the Committee can have on civil servants. I know from talking to civil servants in various Departments over the years that he is absolutely right. How often have any of us in conversation with a civil servant—at all sorts of levels—heard a reference to the possibility of having to appear before the PAC to account for something as a significant influence on the way that they conduct themselves? I hope that my hon. Friend and his Committee carry on holding civil servants and Ministers to account through that process.

Perhaps we could consider for a moment the context within which the debate takes place. My hon. Friend referred to the comprehensive spending review, which delivers a significantly tighter settlement for the funding of public services than most Departments have enjoyed for a number of years. That throws into focus the agenda of safeguarding public services in this environment, and as my hon. Friend said, it means that everyone has to raise their game to ensure that we can continue to enjoy high quality public services in the face of tough spending limits.

My hon. Friend did not actually refer to the CSR settlement as sharing the proceeds of growth, but that is exactly what it is. It comes at a time when there is an increasing awareness on all sides of the political debate that the public want increasing quantities of ever higher quality public services, but they also want tax, over time, to take a smaller proportion of our gross domestic product. That challenge goes right to the heart of the Committee’s essential role in ensuring value for money and the best possible efficiency in delivering public services.

However, there is another aspect to the debate to which my hon. Friend did not refer, but he could have done. As we live in an increasingly globalising economy, the need to maintain our international competitiveness will increasingly constrain the ability of Governments to go on raising an ever higher share of GDP in tax, even if they wish to, to fund public services. We have to address the desire for ever higher quality public services through the improvement of efficiency and better outcomes, rather than simply increasing the volume of inputs. In a situation where 40 per cent. of our GDP consists of publicly delivered services, falling public sector productivity drags down the overall performance of our economy and thus our international competitiveness.

The challenge will be to deliver ever more with a given level of resource—something that may sound challenging, but the private sector has had to do it for years simply to survive, while delivering ever higher quality products and services at ever more competitive prices. This agenda puts a particular focus on the efficiency savings programme in Government. My hon. Friend rightly referred to the Committee’s report on the shortcomings of the efficiency programme, in which the Committee identified bogus efficiency savings. The apparent efficiency was delivered only at the cost of a decrease in the quality of service—a reduction in inputs but a corresponding reduction in outputs—or, even worse, supposed efficiency was delivered only by not counting an additional input cost somewhere else.

We welcome the possible role for the National Audit Office in reviewing Gershon savings on a Department-by-Department basis. It is clear from the Public Accounts Committee report that greater transparency in the Gershon process and independent audit of its results are needed.

One or two overarching themes emerge both from the Committee’s report and hon. Members’ comments in this evening’s debate. The key theme that struck me is capacity—whether the system has the capacity to deliver the complex, top-down solutions that Ministers prescribe from a political perspective. The impression that one gets from the debate is of a system that is overloaded with initiatives, which are increasingly complex and often require huge IT projects to enable their delivery. One also gets the impression that those who might say to their political masters, “This is not do-able; the system doesn’t have the capacity; you’re asking for too much, too quickly” are culturally inclined not to make such statements. I cannot say whether that reflects career judgments by individual civil servants or a deeper cultural malaise. There is also perhaps a bias towards always assuming the most favourable rather than the most likely outcome when planning ahead. That has led to a series of outright failures, some of which have been mentioned tonight, and a further series of on-going projects, which cannot be described as outright failures but suffer serious continuing problems, which, in many cases, look suspiciously like systemic problems that need resolving.

I was encouraged by references by my hon. Friend the Member for Gainsborough to some successful projects that the Committee had identified. It is vital that the Committee looks for the good as well as the bad and then focuses on the challenge of disseminating best practice across Government, and acquiring and disseminating best practice from the private sector. From my hon. Friend’s comments and the balance in his speech between the good projects and those that have not been so successful, we might conclude that a pretty big challenge remains to ensure that lessons from successful projects are learned and disseminated effectively.

Several hon. Members referred to the tension between what might be termed the delivery and the policy-making parts of Government. In an interesting exchange about the development of civil servants’ careers, a suspicion arose that the policy-making part of Government continues to be perceived as the superior branch. Several hon. Members mentioned difficulties with leadership and accountability and the way in which sometimes nobody appears to be in charge of a project. I understand that the permanent secretary in the Department for Work and Pensions could not tell the Committee who was in charge of the CSA computer project. That echoes a comment that the Governor of the Bank of England made to the Treasury Committee a couple of weeks ago. When asked who was in charge at the time of Northern Rock, he asked whether Committee members would care to define what they meant by “in charge”. Again, that is symptomatic of a cultural problem.

Reference was made to the tendency to move civil servants around before projects were completed. That, again, is a facet of a culture whereby generalism is encouraged and regarded as vital to career development. I do not know whether my hon. Friend the Member for Gainsborough agrees, but there is a case for saying that, although the development of individuals’ careers and the human resources policy of Departments are important, the overriding function of the delivery part of the civil service at senior level is safeguarding the public purse and the quality of outcomes for service consumers. There is a case for saying that the needs of career development must be subordinate to those of effective product delivery. I hope that the Committee will continue to press for that cultural shift in Government thinking.

Does my hon. Friend agree that there should not be a conflict between career development and successfully safeguarding the interests of the public purse? Major multinationals, such as Shell and BP, are interested in bringing on their people. The top management of such businesses tend to be the lifers—people who have been there for 20 or 30 years. They have experienced a huge spread of the business and successfully delivered a range of different projects, gaining different skills in the broader business.

My hon. Friend is right. I am not an expert in civil service human resources practices, but the problem to which he alludes is that people on a fast track, who are expected to go far, are moved between delivery and policy-making functions, and often do not stay with a project long enough and do not acquire a critical mass of experience and understanding in any specific matter. However, the point has been made and Committee members have demonstrated an awareness of and alertness to the issue. I hope that it will inform their overview of the position in Departments when things go wrong and, indeed, when they go right.

My hon. Friend the Member for Gainsborough specifically referred to the Olympics project—a large budget item, which rightly attracted the attention of the Committee because of the dramatic increase in its budget from what was originally envisaged. I encourage him to retain his Committee’s close involvement with and interest in the project because there is a danger that the collective desire in the House and beyond for the London Olympics to be a great success may blind us to some of the risks in the delivery and may even discourage us from challenging and probing deeply some of the things that we are told.

As I understand it, notwithstanding the huge £2.7 billion contingency allowance that is now built into the budget, it has not been allocated—at least not publicly—to different stages of the project. There is therefore no ability to determine whether the contingency fund is being used at a pace that is commensurate with delivery of the overall budget or whether it simply conceals an early stage overrun, even beyond what has been planned in the fund. I also understand that no monthly cash flow forecasts are available yet for public scrutiny to enable us to follow closely what is happening and how the budget is evolving. The whole House should be glad that my hon. Friend has fired a warning shot and that the PAC intends to keep a close eye on the project as it goes forward. We look forward to further reports from his Committee on the issue.

The theme of getting the best out of contractors has also been mentioned by a number of hon. Members who have spoken. The concept of the intelligent client—a client who has the capability to define what he wants and the capacity to monitor the ability of a contractor to deliver it—is a critical part of the delivery of complex projects and will become ever more important as the model for the delivery of public services evolves and draws in ever more outside private sector suppliers. The CSA project was again cited as an example of how not to do it. Indeed, the PAC report pointed out that the Government did not rescind the contract with EDS in 2004 when they had the chance to do so.

The Committee has noted that fully £8 billion of the savings that the Government expect to make in their efficiency programme comes from savings in the procurement of goods and services. Clearly a major initiative is required in that area, including a scheme to make the management of the private finance initiative more effective, through developing commercial skills and managing the pre-tender and tendering processes more effectively. That must be one of the major keys to delivering value for money in government in the future.

A clear message is coming from this review of the Public Accounts Committee’s reports that we are discussing, and it is one of multiple failings and lessons unlearned. As my hon. Friend said in his opening remarks, the Government must up their game. The Committee has identified some major projects in the pipeline where there is potential for further mishap. I hope that the Minister will respond positively to my hon. Friend’s helpful analysis and encourage his Committee to continue to analyse what has gone wrong with projects in the past, what is going on with them now and where there is potential for problems to be averted by applying lessons in the future. On an optimistic note, we were all pleased to hear about the good examples, but we will be even more pleased to hear that there is evidence that those good examples have been rolled out.

We were reminded in a timely way by my hon. Friend that value for money has two components—he did not quite put it like that, but that is what he was telling us. When his Committee was established all those years ago, I suspect that the focus was almost exclusively on protecting the taxpayer and ensuring that money was not misspent or wasted. However, in a modern, enabling government environment, there is also the interest of the consumer to be protected. We need to ensure that the consumers of public services receive the best possible quality services with the resource available to deliver them and that the taxpayer is protected against the unnecessary use of resource. The hon. Member for Falmouth and Camborne (Julia Goldsworthy) also reminded us that it is so often the most vulnerable consumers who suffer the most when things go wrong.

I want to put one further thought to my hon. Friend, which is that we still focus far too much in our political debate on the inputs to public services and on the use of resources. We all do it; we all fall into that trap. Indeed, the Prime Minister did it last Wednesday at Prime Minister’s Question Time, when instead of telling the House about the better outputs that he claimed had been achieved in the national health service, he chose to tell the House how many extra doctors and nurses had been taken on, and how many extra billions of pounds were being spent. I suggest to my hon. Friend that there is a need continually to remind politicians on all sides of the debate that outputs and outcomes matter to the public. We will never win the battle for better value for money and more efficiency in government if we fall into the trap of conducting the debate in terms of inputs. Indeed, if we conduct it in terms of inputs, improving efficiency could even appear to have a negative outcome. I hope that he and his Committee will bear that thought in mind in future reports.

We all wish my hon. Friend and his Committee success in the vital task that they perform and will continue to perform. He finished his speech by giving the House a commitment that his Committee would continue with its eyes open, its collective head not averted and its tongue sharp when necessary. I would encourage him, and the Committee through him, to do just that, and to continue to develop its skill set and its focus, as the process of delivering public services continues to evolve and the role of the Committee necessarily evolves with it. I know that the Committee, under my hon. Friend’s guidance and leadership, will continue to be a driver for a cultural change within government that is so necessary if we are to see the improvements in the efficiency, value for money and delivery of public services that are vital to making them sustainable, so that our children and our grandchildren can enjoy the same high quality public services that we expect to receive today.

It is my privilege to speak on behalf of the Government. I follow in the impressive footsteps of my right hon. Friend the Minister for Local Government, who was clearly respected by all parties and was highly effective in his role. I do not know whether hon. Members noticed, but he could not keep himself away from our proceedings this evening and popped in to listen to the initial remarks of the hon. Member for Gainsborough (Mr. Leigh). Old habits, with him at least, die hard.

Hon. Members who have checked my record of service in the House will know that I have served twice on the Public Accounts Committee: once in opposition and once as a Government Back Bencher. It is a great privilege, therefore, to find myself once more a member of the oldest and, I believe, most prestigious of Committees. The Public Accounts Committee has the crucial task of overseeing how more than £500 billion a year of public money is spent.

The accounting officers’ equally crucial role is to appear before the Committee to answer in public for how the organisations that they manage have discharged their duties, ensuring that taxpayers’ money is spent efficiently and effectively, and that value for money is achieved. As the Committee’s Chairman pointed out, some reports highlight successes and other highlight failures, but I believe that there are lessons to learn from all of them.

As the Public Accounts Committee and the Government alike seek to improve public services, I am keen to ensure that the Government make the most of the opportunities that Public Accounts Committee hearings provide to reflect and to learn lessons. The success of the Public Accounts Committee’s scrutiny owes a lot to the strong commitment within Parliament to its work, supported by the expertise of the National Audit Office and complemented by the significant investment of time that witnesses put in. It is in all our interests to ensure that the process is fully effective. I should like to offer my support by ensuring that my officials follow up and implement as far as possible the Committee’s recommendations, and that we share what we have learned widely within the Government.

The work of the Public Accounts Committee and the National Audit Office—as independent, well-resourced bodies—ensures effective scrutiny and deepens democracy and accountability. I should like to thank both organisations for the work that they do. The NAO produces an impressive number of high quality reports on a broad range of subjects, and its remit has been made broader in recent times.

Before I discuss general Government initiatives that might be of interest to the PAC, however, I will endeavour to address some of the contributions made in this absorbing debate.

I must gently take issue with the Chairman’s scepticism of the Government’s record on efficiency savings. The 48th report developed a traffic light system whereby it categorised 26 per cent. of the £13.3 billion of efficiency savings as totally accurate, 51 per cent. as representing efficiency but carrying some measurement and uncertainty issues, and 23 per cent. as representing savings that were perhaps not really verifiable in a coherent manner. Only by putting the whole of the 51 per cent.—what I would call the amber area—into the red category can doubt be cast on 74 per cent. of the total, as the headline of the report does.

The report acknowledges the difficulty of measuring with total accuracy projects that are not stand-alone initiatives. Indeed, it admits that some areas of programme efficiencies achieved might actually have been understated owing to weaknesses in departmental data systems and complex relations between inputs and outputs. Furthermore, the NAO report declares:

“Projects across the programme are making significant improvements in the efficiency of public services.”

I look forward to working with the Committee on improving our data and measurement systems, but we should also give credit where credit is due as the largest and most complex efficiency programme ever undertaken in government proceeds.

The hon. Member for Gainsborough also mentioned the NHS information technology programme. The programme has moved on a long way since the NAO produced its report and the PAC took its evidence. Without the programme, the NHS could no longer function, and it is already providing essential services and significant benefits to tens of thousands of clinicians and millions of patients. It is therefore a success story that ought to be acknowledged. For example, more than 5.5 million appointments have now been made using the choose and book system, representing 44 per cent. of first referrals. In addition, 397 million diagnostic images are now stored centrally, and 42 million electronic prescriptions have been used in a service that is now available in 41 per cent. of pharmacies and 47 per cent. of GP surgeries. Nearly 400,000 users are registered to use the NHS care records spine, with 45,000 NHS staff accessing it daily. National leadership has been strengthened by the appointment of a chief clinical officer and national clinical leads, and the programme proceeds.

The hon. Gentleman made a point about primary care trusts, and I acknowledge that providing out-of-hours services has cost the trusts more than the Government anticipated. However, with improved commissioning, there is significant scope for reducing those costs in the future. In fact, the NAO report on out-of-hours services confirmed that we were on the right track to provide quality, round-the-clock out-of-hours services, and recognised that patients’ experiences of the services were generally positive. Eight out of 10 patients were satisfied with the services, and six out of 10 rated them as excellent or good.

My right hon. Friend the Member for Swansea, West (Mr. Williams) mentioned two issues that he has mentioned before, as I have seen from reading some of the previous debates on PAC reports. I noted with interest that my advice to share with him bore remarkable similarity to advice that previous Ministers had been given on these occasions. On the issue of child obesity, and the question of whether the results of the national child measurement programme should be shared with parents, I know that the relevant Department is exploring and weighing all the options. My right hon. Friend will be aware that parents are being encouraged to inquire about the results, should they wish to do so, including through the provision of tear-off slips on the forms that they need to sign to give permission for the programme to proceed.

On whether the BBC should fall within the auspices of the National Audit Office for accounting purposes, the Government’s view is that the matter was decided as part of the charter review. The consultation that went along with that review demonstrated that the public did not want any increased power over the BBC to be given to either Parliament or the Government. Let me assure my right hon. Friend the Member for Swansea, West and Opposition Members that the NAO works very closely with the BBC Trust, and the BBC audit committee has close discussions to frame a programme of reviews, which it then undertakes. Members of the PAC then make it their duty to call the BBC to account. The reports are presented to Parliament in full and are looked at closely by the PAC.

The consultation on whether the Government should have more power or influence over the BBC is utterly irrelevant. The National Audit Office has statutorily and deliberately been made completely independent of the Government. That is why it audits Government Departments. If there is a falling back on the basis of that evidence, it needs to be said that it is happening on the basis of no relevant evidence whatever.

I hear my right hon. Friend strongly and take note of what he says.

The hon. Member for Falmouth and Camborne (Julia Goldsworthy) has never sat on the Public Accounts Committee, but said how much she appreciated and understood the importance of its work. Clearly, so do we all. I take issue with her view that fixed payments in respect of tax credits might be a fairer way forward. It is not particularly fair for people whose income goes down in-year—they can lose out—and estimates suggest that about 700,000 people who did not have their tax credits reduced would lose out under a fixed payments system if their income fell. As with all such matters, there is a tension between simplification and having too blunt an instrument on the one hand and complication and a more finely tuned instrument on the other. The hon. Lady will understand that from her experience in her own advice surgeries.

The Minister is right about that tension. However, is not the message from our debate that we have to start from what is doable and recognise the limits of the system’s capacity rather than design products or services that meet some theoretical requirement but cannot be delivered?

That is true, but equally the hon. Gentleman must recognise that fixed payments would make many people worse off. I do not underestimate problems with the tax credit system, but let us remember that it helps 20 million people and has lifted 600,000 children out of poverty. The figures show that 97 per cent. of those on the lowest income levels of below £10,000 a year claim this tax credit. If we compare it with its predecessor, family credit, we find that it is much more effective.

Does the Minister agree that people on low incomes are most vulnerable to fluctuations in their income and that they are most likely to suffer if there is an overpayment, as their tax credits would suddenly be stopped?

Clearly, those who have less of a margin will suffer if problems occur, but it is equally the case that tax credits are more generous to those on lower incomes, so they provide a greater incentive for people to go into work. In my constituency surgeries, I have talked to many people who have been enabled to go back out to work and begin to earn a living by the extra help and assistance given by tax credits. As always, there are difficulties when systems go wrong, but the hon. Lady should not underestimate the amount of assistance that the tax credit system has given to many people. We must put these issues, important and difficult as they are, into perspective.

My hon. Friend the Member for Great Grimsby (Mr. Mitchell) has left the Chamber, but he is clearly enjoying serving on the Public Accounts Committee. As all of us who serve on the Committee realise, it is one of the most enjoyable, effective things that a Back Bencher can do—certainly, that was my experience as an Opposition Member and a Government Back Bencher. Even after the many years that my hon. Friend has been in the House, I am glad that he has finally appreciated the finer things that can come from membership of the Public Accounts Committee.

My hon. Friend’s comments about politicians being the problem, and civil servants not standing up to politicians, were interesting. My experience of the tension between policy and practical enforcement in government is not that civil servants do not stand up to politicians, or that politicians try to force civil servants to do things that are undeliverable. It is more subtle than that. As a Minister, I have had many a robust conversation with civil servants and much prefer to be told what is actually happening. If a measure is not seen to be practicable, any Minister worth their salt would want to know about it, and I have been involved in many discussions about the practicality of doing things. If things go wrong, however, the matter does not always come to light at an appropriate level to prevent disaster. As the hon. Member for South Norfolk (Mr. Bacon) said, the work done by the Public Accounts Committee demonstrates what can be done to ensure that such things do not go wrong systemically.

The hon. Member for Runnymede and Weybridge (Mr. Hammond) and the Chairman of the Committee were right to refer to the fact that the Public Accounts Committee praises as well as damns. That is a good innovation, as it shows that there is a good way of doing things, which tends to reduce risks and increase the chances of major projects being delivered. If we simply take the worst cases—which the Committee is right to look at—we can go into a downward spiral of thinking that everything is bad, nothing works and nothing can ever be delivered on time. But we must also remember that a great deal of good change is delivered, day in, day out, by the public sector, central Government Departments and local government, without the great splurge of publicity that can happen when something goes badly wrong.

The hon. Member for South Norfolk asked a series of questions. I suspect that the most important one was about Lorenzo software. I will investigate the matter and write to him about it, because I will not pretend that I have his oversight of that piece of detail. I am happy to consider what he has said and to do what I can to provide him with an answer.

May I ask the Minister to beware of snake oil salesmen who might try to divert her attention from what was originally contractually promised, as opposed to what is actually delivered? There are products out there that have been called Lorenzo, but which are effectively rebadged old software that predates the existence of the national programme.

If the hon. Gentleman is an expert on that snake oil, I am sure he will not be backward in coming forward to point out any sleight of hand in any of the responses that I have managed to produce for him. I shall be more than happy to talk to him about that in due course.

The hon. Gentleman also raised some interesting points about the culture of the civil service, the way in which promotions are usually acquired, and the weaknesses that he feels that that inflicts on the ability to deliver on major projects. I like to think that the culture is changing, especially as a result of the strengthening of the power of the Office of Government Commerce and the increasing seriousness with which project delivery and change programmes are viewed, in the civil service in general and politically—with both a small and a large “p”. The hon. Gentleman, however, clearly has his own observations to make about the effect that has been produced by that culture and that approach, as he has spent the last six years reading the reports that land on the Public Accounts Committee desk.

The hon. Member for Ludlow (Mr. Dunne) made an interesting speech. He mentioned the Committee’s 32nd report, on the right of access to open countryside, and DEFRA’s problems with its budgets. In such circumstances, the Treasury would not see it as its role to decide on DEFRA’s behalf which budgets should be top-sliced.

If there are unfunded pressures in a Department, the usual approach is to leave the Department to deal with them unless or until a claim is made on the reserve. Only then will the Treasury become involved in the nitty-gritty of deciding whether the claim is justified. It certainly would not want to become involved in telling a Department how to deal with unfunded pressures within its own internal financial envelope. If any changes had come about as a result of that, DEFRA would have decided how to deal with them. Clearly, as the hon. Gentleman pointed out, the allocation of funds to Natural England had a direct effect on arrangements for access to the countryside.

I am grateful for that explanation. Does it mean that when an external event takes place such as a fining by the European Union, the Treasury will not take the initiative but will rely on each Department to submit an application?

No. It will obviously be aware of such events if they are due to happen.

If an unfunded pressure of any sort was expected, there would be a dialogue with the Department concerned. However, if the Department then decided to make a claim on the reserve, the Treasury would make the decision. Although it might have suggestions to put to the Department, it would not insist that the Department do anything in particular about its unfunded pressures; that would be a matter for the Department. As I said earlier, it is a decision for the Treasury only if a claim is made for allocation to the contingency fund. Despite its reputation, the Treasury does not micro-manage every departmental budget.

Given that if a claim is made it is for the Treasury to decide whether to accept or reject it, was a claim made in this case and rejected by the Treasury?

The hon. Gentleman has the better of me. We are dealing with 40 reports, and I cannot give him a detailed answer to a specific question of that kind. However, I should be happy to find out whether I can discover the answer for him.

The hon. Member for Gainsborough spent some time talking about the Olympics. The PAC recently initiated an interesting development in its scrutiny programme by conducting a hearing on preparations for the Olympic and Paralympic games, although of course the work has yet to be finished.

More such hearings are planned. That approach was welcomed by the Opposition Front Bench. It is a new approach. The PAC and the National Audit Office are no doubt aware of the risk that their current involvement could somehow affect their objectivity when they later review the Olympic arrangements after the event, but it will be interesting to observe whether, and how, the approach will improve the Government’s effectiveness in delivering the games.

The Government look forward to staging the world’s oldest and largest sporting festival as an event of which the entire nation can be proud. We intend to provide a fitting venue for a giant celebration of human capacity for achievement and diverse talent. Beyond that global celebration, we are determined to ensure that it brings significant and lasting benefit. Our goal is to leave real and valuable legacies. We want to make the UK a world-leading sports nation. We plan to transform east London. We must inspire our young people to take part in voluntary cultural and physical activity. We shall have an Olympic park that is a blueprint for sustainable development. If we do all that, the UK will be a shining light as a creative, welcoming and inclusive society—the vision that won us the bid in the first place.

During its visit in June 2007, the International Olympic Committee co-ordination commission observed that good progress had been made and that the work was on track both operationally and financially. Its chairman stated:

“we really consider London will be a model for future host cities of the Games”.

We intend to prove him right.

I am sure that my hon. Friend will want to take this opportunity to congratulate the Olympic Delivery Authority on bringing in the first construction contracts on time and under budget. Those contracts are managed by a capable engineer, Howard Shiplee. Will my hon. Friend also commend our Government on introducing project bank accounts and project insurance in an attempt to control any overspend outside the control of the ODA, and to ensure that the construction companies involved get paid and we look after small and medium-sized enterprises as a result?

My hon. Friend is right, and it is nice to hear a contribution that celebrates our success in winning the games and is upbeat about our ability to deliver them. We already know that we are ahead of previous games in terms of preparation and planning, including in securing flows of private funding and sponsorship. Our public investment has generated private investment of about £1.5 billion in the Olympic village and £6 billion in Stratford.

To respond to what the hon. Member for Gainsborough said about preparations, there is one body, and ultimately one individual, with overall responsibility for delivery, and beneath them there are clear reporting lines, as set out in the Treasury minutes. The Olympic board is overseeing preparations for the games. That is being co-chaired by my right hon. Friend the Minister for the Olympics and the Mayor of London, and the Minister for the Olympics reports directly to the Prime Minister. It is also incorrect to state that strong monitoring and risk management arrangements are not in place. They have been explained in the Treasury minutes.

I wish now to discuss broader Government initiatives by briefly addressing five areas that might be of interest to Members. On 9 October, the Chancellor announced in his comprehensive spending review plans that will release £30 billion for reinvestment. The next stage will be for Departments to publish value-for-money delivery agreements by the end of the year. That will set out publicly how they will achieve their value-for-money savings. From then on, they will report biannually on their performance to ensure that the public are informed of progress towards meeting the value-for-money targets. As the hon. Member for Gainsborough has called for breakdowns of departmental performance, I anticipate that he will be keen to read them. The Government welcome the National Audit Office’s continued vigorous interest in scrutinising the process to ensure that it achieves its goals.

A second area of great interest is the progress of the Government Department capability reviews. Fifteen Departments have already been reviewed, and the findings are published on the Cabinet Office website. We await with intense interest the results on the final two Departments: Revenue and Customs and my own Department, the Treasury. They should be published by winter 2008 at the latest. Furthermore, we are keen to ensure that this process has teeth, so once initial reviews are published, each Department has three follow-up board meetings to review progress against the findings.

Thirdly, there are the Sharman orders. In response to Lord Sharman’s report “Holding to Account”, the Government announced that they would strengthen the statutory powers of the National Audit Office’s Comptroller and Auditor General. Parliament has approved a number of orders to give the CAG statutory audit responsibility for non-departmental public bodies and special health authorities. Lord Sharman also recommended that the CAG become auditor of the non-departmental public bodies that have also been set up as companies, and he will become eligible to do so from the financial year 2008-09, once the Companies Act 2006 is in force. The Treasury is working closely with the NAO and the Department for Business, Enterprise and Regulatory Reform—the successor to the Department of Trade and Industry—to ensure that the changes are implemented from April 2008, and to date 90 companies and subsidiary companies have been identified. When the powers are in place, the NAO will be able to offer Parliament a more comprehensive account of public business, so hon. Members will have a fuller picture of how public money is used.

Fourthly, I commend to the House a short and readable new Treasury publication “Managing Public Money”. It is now the Treasury’s reference guide on standards and ethics in the use of public funds. Its predecessor, “Government Accounting”, had been around for many years and was an essential tool for all parts of the public sector, but over time it had become too lengthy and unwieldy. The new publication is much shorter, and is drafted to set out the principles that need to be applied. It is important for everyone making decisions relating to the use of public resources to appreciate the high standards expected. Of particular interest to the House will be the guidance to officials on parliamentary and Treasury controls over public expenditure and the need for legislation to enable Government spending. Copies of “Managing Public Money” have been sent to the Library and to the relevant parliamentary Committees—and they are doubtless in fantastically high demand.

I hope that the fifth initiative that I wish to explain will ease all our work in monetary scrutiny. On 3 July, the Prime Minister announced his goals for constitutional change and proposed that the Executive become more accountable to the public and Parliament through 12 reforms. In addition, the Government are committed to enabling the close scrutiny of public spending, for which reliable information is a prerequisite. We have a strong track record of improving financial management and transparency over the past decade, but in one area Parliament’s task has been complicated by the ways in which records of public money have been formatted.

Largely for historical reasons, we use different systems to set the control budgets, to present the annual estimates and to publish audited accounts. The accounts produced are all accurate and comply with their own reporting principles, but it is not easy, for instance, to compare planned expenditure with actual expenditure when using these systems. The differences between those outputs can cause confusion and inefficiency, so the task of parliamentary scrutiny of public spending is made more difficult than it need be.

The Government have therefore put in place an alignment project. In practical terms that will involve substantial effort, but it will help us to progress in respect of the need for clarity, coherence, consistency and transparency, and therefore better accountability. The core part of the project is a better alignment of budgets, estimates and accounts, but it has wider implications. We will also be reviewing the frequency, format and terminology of all financial documents laid before Parliament. We aim to put changes in place by the end of the CSR 2007 period, subject to legislative requirements.

The Government look forward to consulting Parliament to take that project forward, and will work closely with the Public Accounts Committee and the NAO on its detailed implementation. I hope and believe that it will be a welcome step towards making the various systems used to control and report on public spending easier to understand and more efficient to operate.

Finally, many happy returns to the PAC, which is 150 years old. I do not know what the symbol is for 150th anniversaries, but perhaps in the case of the PAC it should be a magnifying glass. I have been looking at the records of some old debates. I found one from 102 years ago, in which it emerged that the Admiralty had spent nearly £500,000 without having signed a contract to do so. It seems that some things never change, despite all our best efforts. All of us who have been involved are proud of the way in which the PAC is constituted and does its job for Parliament. It provides an invaluable service to all of us, and I wish it a happy anniversary and many more years.

I thank the Exchequer Secretary for her kind words to the Committee. I thank all those who have taken part in the debate, especially the right hon. Member for Swansea, West (Mr. Williams), the Father of the House, who is a stalwart member of the Committee. I also thank him for laying to rest the canard that we are somehow trying to compromise the editorial independence of the BBC. There is no question of our trying to do that.

I thank the spokesman for the Liberal party for her speech, and especially for reminding us of the accountability gap, which I have not heard expressed so clearly before. I also thank the hon. Member for Great Grimsby (Mr. Mitchell), who brings a lot of life to our Committee. He made a fair point about civil servants. Certainly, in my brief inglorious career as a Minister I never encountered a compliant civil servant. It was more a question of “No, Minister” than “Yes, Minister”. There is a serious point, however. We saw with the Rural Payments Agency saga that while the permanent secretary, Sir Brian Bender, had a close and continuing relationship with the Secretary of State, the project director did not. It is a question of officers and men, I think. Many project directors have a tenuous link with Ministers, and that is something that we need to address.

I am grateful for the assiduity of my hon. Friend the Member for South Norfolk (Mr. Bacon), and especially for his comments about the need for a single project director. We have gone back to the point again and again in these debates, but it needs underlining. For instance, for the Bowman project—a huge Ministry of Defence project—there was no senior responsible owner.

I also thank my hon. Friend the Member for Ludlow (Mr. Dunne), who is a new member of the Committee, which reminds me to take up one more important point about where our systems often fail. As we saw with the NHS IT project, we often publish our report only for the Department to say that it has dealt with the problem. That is because we have shot ourselves in the foot, because our report has been so long delayed after the initial NAO report. I am trying to put pressure on the otherwise excellent NAO to try to speed up the process. It is because it is so careful that the process can take so long, but I want to see clearance speeded up. I say to Ministers and civil servants who read the report of this debate that there are often long delays between the NAO team finishing its investigation and its being allowed to publish its report. I want to see the process brought right up to the PAC hearing, so that we get up-to-date information. After the hearing, the NAO should write the draft report much more quickly, so that we can publish it. The whole process should be completed within three months, if possible, so that on the day that the PAC publishes its report we do not get the response from Ministers, as we frequently do, “Well, it’s a very interesting report, but we’ve dealt with all those points.” I am grateful to my hon. Friend for highlighting that point.

I also thank my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond), the shadow Chief Secretary, for his highly intelligent and thoughtful contribution. He reminded us that we are now committed to sharing the proceeds of growth. As a loyal member of the Conservative party, I accept that mantra, which has been put forward by our Front Benchers. It is not for me, as the Chairman of the PAC, to get involved in that debate now, but I am entitled to make the point that just a 2 per cent. efficiency saving every year would deliver £8 billion either for tax cuts or for more spending on essential public services. Our work is, therefore, right at the centre of the debate.

Question put and agreed to.


That this House takes note of the 9th, the 11th, the 13th to the 40th and the 43rd to the 45th Reports, and of the First Special Report from the Committee of Public Accounts, Session 2006-07, and of the Treasury Minutes thereon (Cm 7076, 7077,7151, 7152, 7216).