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Comptroller and Auditor General

Volume 655: debated on Wednesday 6 March 2019

[Relevant document: Seventy-fifth Report of the Committee of Public Accounts, HC 1883, Selection of the new Comptroller and Auditor General.]

I beg to move,

That an humble Address be presented to Her Majesty, praying that Her Majesty will appoint Gareth Davies to the Office of Comptroller and Auditor General.

I would like to start by paying tribute to the outgoing Comptroller and Auditor General, Sir Amyas Morse, who has led the National Audit Office since 2009. The past decade has been a period of great change in the public finances, during which Sir Amyas has served with distinction, displaying the independence and professionalism that have been the hallmarks of his career. He has now reached the end of his non-renewable term, and I am sure I speak for the whole House when I thank him for his service and wish him the very best for his future endeavours.

May I as a Back Bencher, but also as a Select Committee Chair who drew on Sir Amyas’s services, record one aspect of him that so struck me, which was his attitude to public service? He had a golden DNA that ran through him, with a knowledge and a certainty about how he should serve this House and, through this House, the public. However friendly one got with him—one might be on Christian name terms—one knew it meant nothing if he did not think something was the right thing to do.

As I have said, Sir Amyas’s professionalism and integrity shone through the work that he did and, as a Select Committee Chairman, the right hon. Gentleman knows that and has experienced it at first hand.

In line with the Budget Responsibility and National Audit Act 2011, the appointment of Sir Amyas’s successor, Gareth Davies, has been agreed with the Chair of the Public Accounts Committee, the hon. Member for Hackney South and Shoreditch (Meg Hillier). With three decades of audit experience, gained in both the public and private sectors, Mr Davies is eminently qualified to be our 17th permanent Comptroller and Auditor General, a position he will hold for a non-renewable term of 10 years.

I am sure that, under Mr Davies’s leadership, the National Audit Office will continue its proud history of rigorous and independent scrutiny of Government, and that the people of the United Kingdom can have every confidence that their taxes will continue to be spent in an effective and proper manner. Mr Davies will be a worthy servant of this House and this country. I am delighted to support his appointment, and I commend this motion to the House.

I rise to offer the Opposition’s backing to the appointment of Mr Gareth Davies as Comptroller and Auditor General. The position was initiated by William Gladstone, a Liverpudlian at birth who lived at Seaforth in what is now my constituency of Bootle and actually went to school in Bootle at one point.

The importance of the position is reflected by the fact that the Prime Minister is in attendance and has formally moved this appointment. Similarly, its significance is demonstrated by the rigorous vetting process undertaken by the Chair and members of the Public Accounts Committee. This reflects the central role parliamentary Select Committees play in modernising Parliament, ensuring that the appointments made by Governments of whatever colour receive proper parliamentary scrutiny.

As the chief executive of the National Audit Office, the work of the Comptroller and Auditor General cannot be overestimated. The NAO provides an indispensable role in independently auditing Government Departments, ensuring financial transparency and good value for money, as was mentioned by the Prime Minister.

I know that I speak for all Members when I say that the NAO’s work is vital in establishing an accurate picture of Government spending and in helping Members to properly hold Ministers to account. That work will be more important than ever as Ministers continue to spend increasing amounts of public money in preparation for no deal, with appropriate oversight from this House. I have no doubt that the new Comptroller and Auditor General will continue the forensic examination of accounts that we have all come to respect and that I hope the Government and their Departments—particularly those that have “Transport” in their name—will recognise, now and in the future. At this pressing time, the NAO’s workload will be made even heavier by the Government’s departmental spending review, which may put more strains upon services.

I echo the Prime Minister’s tribute to the outgoing Comptroller and Auditor General, Sir Amyas Morse. He has served with distinction under difficult circumstances, given that under his tenure the NAO has not found itself protected from cuts to resources and staffing.

Let me turn to the appointment of Mr Davies, who has more than 30 years of mixed experience as a public auditor, including work with local public services, central Government and the charity sector. The Opposition support the recommendation of the cross-party Public Accounts Committee and its satisfaction

“that Mr Davies has suitable audit and professional experience and demonstrates the necessary independence and resilience to make a success of the role.”

It goes without saying that Mr Davies is taking over the position at a difficult time and has an important task ahead. However, the Opposition are confident that he will perform his role with distinction and diligence. On behalf of the Opposition, I wish him well.

I am delighted to catch your eye in this important but short debate, Madam Deputy Speaker.

I first served on the Public Accounts Committee between 1997 and 1999, under the chairmanship of my right hon. Friend the Member for Haltemprice and Howden (Mr Davis). Since September 2017, I have served as its deputy Chairman. There is probably only one other Member of this House—my hon. Friend the Member for South Norfolk (Mr Bacon), who is sitting beside me—who has served on the PAC during the tenure of both Sir John Bourn, the previous Comptroller and Auditor General, and Sir Amyas Morse, the current holder of that office. Of course, they were both very different. In some ways the job has evolved with changing circumstances, such as the review of the whole of Government accounts, but in other ways it has not; the NAO’s basic auditing function and its value-for-money reports are exactly the same as when I first joined the PAC. Each CAG and each Chairman of the PAC has different ways of working.

Under the excellent chairmanship of my hon. Friend—as I call her for this purpose—the Member for Hackney South and Shoreditch (Meg Hillier), the CAG and the NAO are much more available to give briefings to Members and answer their queries than they ever were in the old days. The briefing session before each PAC hearing and the appointment of lead members has made the Committee’s huge workload—with public sessions twice weekly—manageable for its members. It also means that they are able to specialise, so the Committee’s work is much more professional. Together with the excellent work of the NAO, those changes have led to the Government accepting approximately 80% of PAC recommendations.

Departments could and should make better use of the information that the PAC and the NAO provide. The PAC is probably the most important Select Committee in this House and it’s whole raison d’être is to scrutinise the entirety of Government expenditure. That is reinforced by the convention that its Chairman is always an Opposition Member.

The CAG is a parliamentary appointment that is then approved by the Government, as in the motion so graciously moved today by the Prime Minister. I thank her for being present, given all the multifarious and difficult responsibilities that she has at the moment. Her presence demonstrates just how important an appointment it is.

That brings me to the appointment of the 17th Comptroller and Auditor General, Mr Gareth Davies. Having chaired his pre-appointment hearing at the PAC on 21 January, I have no hesitation in endorsing his appointment. There was an extremely strong shortlist, but he emerged as the best candidate. The CAG is instrumental to ensuring that Parliament is able to carry out its financial scrutiny of the Executive via the PAC, with the support of the NAO, so the vacant post was advertised to a very wide talent pool. The shortlisted candidates then underwent a technical assessment with the Auditor General for Scotland and extensive interviews and testing with a diverse panel of NAO staff. The process was stringent, and I believe that it has found an excellent successor to Sir Amyas Morse.

There can be no doubt about how eminently qualified Gareth Davies is for the job. He has more than 30 years’ experience as a public auditor and has worked at a senior level both in public services and in central Government. A University of Cambridge mathematics graduate, he qualified as a chartered accountant in 1992 and then worked in audit for several local authorities across London and the south-east, as well as for the Department of Health. Since 2012, he has served as head of public services at Mazars LLP, before which he was a managing director at the Audit Commission.

It would be wrong not to record my thanks to the departing CAG, Sir Amyas Morse, for his unparalleled and invaluable work. Under his tenure, the National Audit Office has been at the forefront of scrutinising the Government’s preparedness for exiting the European Union, so it has been influential in shedding light on the scale of the task that lies ahead. Where necessary, Sir Amyas has been unflinching in his criticism of the actions of Government Ministers, or the Government as a whole. It has been an immense pleasure to work with him, and I wish him well in whatever he decides to do in the future. He was not only extremely technically qualified for the CAG’s work, but unfailingly courteous. He will be missed.

As other Members have done, I thank the Prime Minister for coming to the Chamber today to move the motion. It is a symbol of the importance of the Comptroller and Auditor General’s role that it is supported both by the Prime Minister and by myself, as a representative of the Opposition and as Chair of the Public Accounts Committee. I am honoured to chair the Committee, but it is only 157 years old, whereas there has been a Comptroller and Auditor General in some form for considerably longer.

The position that we are approving today is a constitutionally significant one, because the Comptroller and Auditor General has to deal with whichever Government are in power. They need to be fearless and strong in their attention to how the Government spend the taxpayer’s money, manage projects that deliver for the citizen and ensure that they are being done as well as they can be. It is therefore important that we appoint someone with backbone, robustness and serious experience. Interestingly, this is the only time in the position’s history that we have required applicants to hold a financial qualification—although the incumbent, Sir Amyas Morse, does have such a qualification.

I am reminded today of Sir Amyas’s comment that it is not his job to be popular. It is important that the Comptroller and Auditor General be able to stand up for what they believe is right, based on the facts and the numbers, and ensure that the House is provided with the real numbers so that we can debate the issues.

I am delighted that the hon. Members for The Cotswolds (Sir Geoffrey Clifton-Brown) and for South Norfolk (Mr Bacon) are present. They have both served as my deputy Chair, a role that I created for Members of the Government party. As parliamentarians committed to scrutiny, we recognise the importance of the Committee’s work, whichever party is in power. It is important that we have the decent information that the National Audit Office provides.

As my party’s Front-Bench spokesperson, my hon. Friend the Member for Bootle (Peter Dowd), noted, the Comptroller and Auditor General is also the NAO’s chief executive, so it is important that they have the ability to lead an organisation of some 800 people. In that respect, Gareth Davies also has my confidence.

I put on record my thanks to the outgoing Comptroller and Auditor General, whose term of office is limited to 10 years and will come to an end on 31 May; Gareth Davies is due to take over on 1 June, if his letters patent are issued. Sir Amyas has been a fearless advocate for what is good in the public sector and for challenging Governments of whatever party—he has worked under different Governments of different hues—to ensure that Parliament is provided with the information that it needs to engage in scrutiny.

May I add a word of appreciation for Sir Amyas’s accessibility to me and other Back Benchers who are not members of the Public Accounts Committee?

I thank my right hon. Friend for that comment. It is certainly my ambition, as well as the NAO’s, that the information and support that it provides should be available to all Back Benchers, so that all Members of this House can properly scrutinise whichever Government are in power. With a 10-year term it is possible, as it has been with Sir Amyas Morse, that the new Comptroller and Auditor General will deal with Governments of different political hues. I am confident in his robustness, his steel, his ability and desire to call out what is right and truthful, and his straight approach to his profession. As others have mentioned, he has been an auditor for 30 years. He is highly experienced, highly capable and I highly recommend him.

It is a pleasure to follow the hon. Member for Hackney South and Shoreditch (Meg Hillier). I would like to make two quick points.

The first point is about Sir Amyas Morse, who has been Comptroller and Auditor General for 10 years. I was one of those who cross-examined him when he appeared before the Public Accounts Committee before he was appointed. He has done an extraordinarily good job over 10 years and built up the National Audit Office, from a good position under his predecessors, to a point where it is now without question one of the best supreme audit institutions in the world, if not the best supreme audit institution in the world. He is widely respected both here and internationally. It is quite fair to say that he really has done the state some service. We are all deeply in his debt.

My second point is about the consequences of the abolition of the Audit Commission and the fact that we are now appointing, in Mr Gareth Davies, an individual of the highest calibre who has spent most of his life at the Audit Commission. Following the abolition of the Audit Commission, there are concerns about the departmental understanding of the picture emerging from local audit work. Indeed, as Mr Davies said in his evidence, referred to by my hon. Friend the Member for The Cotswolds (Sir Geoffrey Clifton-Brown), there is still a risk that, even when things are being flagged up by the local auditor, either the governance of the authority itself or the Department are not acting quickly enough to pick up and address those points.

My concern was that there might be, either in slow time or in quick time, a move to burden the NAO with a whole load of extra responsibilities, frankly swamping it with the work of local government audit. In fact, the work of local government audit is being done quite effectively. There is no evidence that it is not being done well. However, there is evidence that it is not being picked up quickly enough and, where local auditors are issuing qualifications, the Department of State concerned, in this case the Ministry of Housing, Communities and Local Government, is not necessarily responding quickly enough. Under the new Secretary of State, who has been in office for nine or 10 months, I am confident that changes are afoot, particularly since the debacle of Northamptonshire County Council. I just wanted to make the point that it is very important that we do not take an extremely good institution that is well-run and functioning extremely well, and try to extend its scope unnecessarily. I was therefore very relieved when I read Mr Davies’s other evidence where he said:

“When an organisation like the NAO demonstrates its capability, it is very tempting to give it additional tasks, and if you are not careful you can lose focus on your prime objectives.”

I was very gratified to see that he is extremely cautious about doing that. I commend his wisdom, evident in the evidence he gave to my hon. Friend the Member for The Cotswolds, and I commend his appointment as Comptroller and Auditor General.

Madam Deputy Speaker, as you know I am a newer Member to this House. There is no better apprenticeship for being an MP than sitting on the Public Accounts Committee. I would like to start by placing on the record my thanks to the hon. Members for Hackney South and Shoreditch (Meg Hillier) and for The Cotswolds (Sir Geoffrey Clifton-Brown) for chairing our Committee so ably.

Without the National Audit Office and without the robustness of its reports, we could not do the job we do quite as well as we do. I pay tribute to Sir Amyas Morse who, right from the get-go, has been—the hon. Member for The Cotswolds said exactly this—unfailingly courteous. That is the first thing one notices about him: that easy smile. Behind that, however, is an intelligence of steel. He has a knack for calling out obfuscation, fudge and imprecision in our civil service, but also a reputation for being completely fair. That is exactly what we in the Public Accounts Committee aim to do. I will genuinely miss him and I wish him all the very best.

I am looking forward very much to working with Gareth Davies. We grilled him. Believe me, we did not give him an easy ride when he came before the Committee for his appointment. I was interested to know in particular, as a trustee of Oxfam and Save the Children, what part he had played in their recent scandals and what he had learnt from them. I have absolute confidence that that and all his other experience will bring great things to the NAO. I very much look forward to working with him.

Question put and agreed to.