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Public Accounts Commission

Volume 487: debated on Thursday 5 February 2009

The Chairman of the Public Accounts Commission was asked


2. For what reasons Tenon was appointed as the National Audit Office’s external auditor for a further year from June 2009. (254299)

Following a competition in 2006, the Commission appointed Tenon for three years, with the option of two one-year extensions. The Commission has been satisfied with Tenon’s performance and has decided to exercise the option to extend the appointment for a further year, to July 2010.

Tenon has made a number of important recommendations on, for example, business reporting arrangements, the management of fee income and how to deliver work programmes in the most effective way. With all the recommendations accepted, its work has ensured that the National Audit Office, working with the Public Accounts Committee, continues to be a world-class operation that delivers a £9 saving for every £1 spent. That means that £656 million is delivered back to the taxpayer every year.

Are we not back, however, to the central dilemma of Plato’s “Republic”: quis custodiet ipsos custodes? Who should audit the auditors? Have we not got a cosy cabal between Tenon and the NAO? Tenon failed to detect—or overlooked or declined to report on—the gold-plated, fur-lined expense arrangements of the former Comptroller and Auditor General, Sir John Bourn. What confidence can we have in its forensic ability to report on the things that matter in relation to the operation of the NAO?

As the hon. Gentleman knows, we have now put in place a completely new governance structure for the National Audit Office. For the first time, there will be an independent chairman working with the Prime Minister. We have appointed Sir Andrew Likierman, who is probably the country’s leading expert on resource accounts, to be the chairman of the NAO, and he will lead a board that will directly oversee the Comptroller and Auditor General in terms of his expenses and all the things that the hon. Gentleman has mentioned. At the same time, the board will ensure that the Comptroller and Auditor General continues to be fully independent in delivering value-for-money reports. We have also, with the Prime Minister, appointed Amyas Morse—a first-class appointment—who will deliver the kind of improvements that the hon. Gentleman wants.