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Appointment of the Chair of the National Audit Office

Volume 537: debated on Wednesday 7 December 2011

Agreement of the Chair of the Committee of Public Accounts signified.

I beg to move,

That an humble Address be presented to Her Majesty, praying that Her Majesty will appoint Professor Sir Andrew Likierman to the Office of Chair of the National Audit Office.

This is the first time that a Prime Minister has moved a motion to appoint the chair of the National Audit Office, and it is a direct result of the legislation that we have brought forward to implement the Public Accounts Commission’s recommendations on strengthening the governance of the National Audit Office, including through new board arrangements and an independent chair.

At a time when we are getting to grips with a record budget deficit, and when families and businesses up and down the country are working hard to make ends meet, it is more important than ever that we get the best possible value for money in public service delivery. That is why, for example, this Government have delivered £3.7 billion of savings in just 10 months—enough to pay the salaries of 200,000 junior nurses or 150,000 secondary school teachers.

The National Audit Office has a vital role to play in holding the Government to account and in ensuring that we achieve the greatest possible value for money. The proposed chair is Professor Sir Andrew Likierman, currently the NAO’s acting chairman. He was appointed following an open competition by my predecessor the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) and the former Chair of the Committee of Public Accounts, my hon. Friend the Member for Gainsborough (Mr Leigh). The intention was that Professor Likierman should become the chair of the new NAO in due course, and he has indicated his willingness to continue in the role for a further three years.

Professor Likierman is a distinguished public servant with extensive knowledge and experience of business and public service. Since taking up the acting chair role, he has established the NAO’s board as an effective governance body, providing support and independent challenge to the NAO’s decision-making process. He has also provided counsel and advice to the Comptroller and Auditor General at a time of change for both the NAO and the central Government bodies that it audits.

I believe it is desirable for Professor Likierman to be appointed under the new legislation in order to provide continuity as the NAO formally adopts its new governance arrangements, and I have no hesitation in commending this motion to the House.

I am pleased briefly to take part in the debate and to confirm the appointment of Andrew Likierman as chair of the National Audit Office.

In my role as Chair of the Committee of Public Accounts, may I take this opportunity to endorse what the Prime Minister has said about the suitability of Sir Andrew? Although it was my predecessor, the hon. Member for Gainsborough (Mr Leigh), who was involved in the appointment of Sir Andrew as acting chairman of the NAO, it is clear that in any field of open competition Sir Andrew’s qualifications are outstanding. He brings with him a wide breadth and depth of experience in financial reporting, Government finance and issues of governance. His distinguished career has encompassed both the public and private sectors in an academic and a professional capacity. He is a past managing director of the Treasury and head of the Government Accountancy Service. He has advised the Treasury Committee and is currently dean of the London Business School. His suitability for this role is unquestionable.

As the Prime Minister said, Sir Andrew has already played an important role at the NAO. He has been instrumental in establishing the new governance arrangements and providing the leadership to form an effective board during a time of organisational change. He has already contributed to enhancing the credibility, reputation and influence of the National Audit Office in supporting both Government and Parliament to secure better value for money, particularly in the current fiscal environment. I have no doubt that Sir Andrew has had a great and positive impact since he was first appointed in 2009 and that he will continue to do so in future. I wish him well.

I support the motion moved by the Prime Minister. I remember that his predecessor was a bit cross about having to come to this rather quiet little affair, with all his other very heavy responsibilities, especially as he had already appointed the previous Comptroller and Auditor General as an acting Comptroller and Auditor General.

It is worth emphasising that the reason it is important that the Prime Minister is here is that this is the one job—in fact, there are two jobs, the Comptroller and Auditor General and the chair of the National Audit Office—that is not in the sole gift of the Prime Minister. At least there is one job he does not appoint; I am sure that he is prepared to concede this one. It is very important that he is not in sole control and that he appoints the heads of both these bodies—the chairman of the NAO and the CAG—with the Chairman of the Public Accounts Committee. By definition, my right hon. Friend is a member of the Government—that is obvious—and, by changing the rules of this House to create a unique rule, we have ensured that the Chairman of the Public Accounts Committee is always a member of the Opposition. The two people who run the National Audit Office are therefore appointed on a genuinely all-party basis. That is essential.

Of course, I welcome this sealing of the appointment of Sir Andrew. I could hardly say anything else, as I appointed him in the first place. He is a superbly well qualified person for this job. The reason we created the new role of chairman of the board—I worked with Alan Williams, the former Father of the House, to whom, once again, I pay tribute for his many long years of service to this House—was that previously the Comptroller and Auditor General was, in effect, a dictator. He had sole control of the organisation; there was no board, and none of his judgments should be questioned. It is quite right that when the CAG looks at the accounts of Government— when he is holding the Government to account—he should be completely independent and act on his own, and nobody must be able to gainsay him. He must be able to look into every filing cabinet, summon every civil servant, and expose every scandal. However, in terms of running a modern organisation like the National Audit Office, it was right that we should modernise, move with the times, and create a proper board that could oversee the organisation as opposed to the policy, and that is what we did with the appointment of Sir Andrew. He is a good candidate and I welcome his appointment.

I, too, rise to support the motion. Sir Andrew Likierman is a highly suitable candidate.

I must say that at first, I had doubts—not about Sir Andrew, but about the office of chairman of the National Audit Office and the suitability of having a board. I was concerned about maintaining the independence of the Comptroller and Auditor General and making sure that his independence was no way impinged on by any further statutory inhibitions of any kind. I am now satisfied, especially as Sir Andrew has served as the shadow chairman for the past 18 months to two years, that that will not happen and, moreover, that the arrangements between the National Audit Office and its chairman, and in relation to the statutory functions of the Comptroller and Auditor General, which must not be impeded, have been satisfactorily worked out.

Those functions include access, if required, to every filing cabinet. May I say to the Prime Minister that that includes, if required, access to Cabinet papers? That is not—because the Comptroller and Auditor General, as we all know, is statutorily prohibited from looking at policy questions—in order to question policy, but to see that the right judgments were arrived at in obtaining value for money. In the light of the recent discussions that have been held on this subject in relation to the Ministry of Defence, I am pleased that the system worked as it should and that, as in the past, the National Audit Office ultimately had access to Cabinet papers. This was not exceptional—the NAO has done it before—and the system worked as it should. That shows that the judgments that the National Audit Office reached, having had access to Cabinet papers, were the right ones. Because of that, and because of Andrew Likierman’s suitability, I am very happy to support the motion.

It is an honour to support the Prime Minister and the right hon. Member for Barking (Margaret Hodge) on the motion to appoint Professor Sir Andrew Likierman as chair of the new National Audit Office. I should like to echo the tributes of other Members, including my hon. Friends the Members for Gainsborough (Mr Leigh) and for South Norfolk (Mr Bacon), regarding the fine contribution that Professor Likierman has already made as shadow chairman of the National Audit Office and his qualifications for the role.

Since becoming shadow chairman, Sir Andrew has done tremendous work to establish the shadow board as an effective and authoritative governance body. This has set the basis for the future as the NAO takes on its full responsibilities. As the House is aware, the new governance arrangements for the NAO were enacted following a report by the Public Accounts Commission in the previous Parliament. That report recommended that the NAO, led by the Comptroller and Auditor General, should remain the Government’s auditor, independent of Government and answerable directly to Parliament through the commission. The commission also recommended that the NAO should be a corporate body, with existence separate from, but providing resources and support to, the Comptroller and Auditor General.

The new NAO will have a board with a majority of non-executives, including an independent non-executive chair, who will be a Crown appointment, appointed by the Crown in the same way as the Comptroller and Auditor General. The Comptroller and Auditor General will have a fixed 10-year term—previously it was unlimited—and remuneration of the CAG will be agreed by the Prime Minister and the Chair of the Committee of Public Accounts, rather than being linked to permanent secretaries’ remuneration. The report also recommended that the NAO’s audit reports continue to be laid in Parliament, and that the Committee of Public Accounts should continue to hold scrutiny hearings on some of them.

The report’s recommendations were accepted by the previous Government, and provision was included in the Constitutional Reform and Governance Bill, which received cross-party support in the Commons. As the House will be aware, those clauses were lost in the other place during the wash-up stage before the general election, but this year the Government included the provisions in the Budget Responsibility and National Audit Act 2011. The governance reforms envisaged in the provisions strengthen the independence and accountability of the Comptroller and Auditor General in holding the Government to account.

These reforms are entirely in line with the coalition Government’s commitment to transparency and accountability in the public finances, including by implementing whole of Government accounts. As the right hon. Member for Barking noted, effective independent oversight of the efficiency of Government spending is especially important when public resources are under pressure, and these reforms are intended to ensure that the Comptroller and Auditor General and the NAO can fulfil that role.

I support the motion and Sir Andrew Likierman’s appointment as the first independent chairman of the new National Audit Office.

Question put and agreed to.