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Government Spending (Website) Bill [HL]

Volume 688: debated on Friday 26 January 2007

My Lords, I beg to move that this Bill be now read a second time. The Bill is built upon twin pillars of transparency and value for money. I hope it is uncontroversial and will commend itself to all sides of your Lordships’ House.

The Government brought in the Freedom of Information Act 2000. It represents a significant advance in transparency and openness, which we believe are essential attributes of good government. There are now some practical issues about the operation of the Act, but its basic intent is openness and transparency. My Bill is a companion to it, taking openness about expenditure into the computer age.

My party believes that when Governments spend money, they are spending our money. We paid the taxes, and it is our right to know what the Government are doing with them. The Government owe it to taxpayers to be transparent about how they spend money when they remove it from us by way of taxation.

I am not sure that the Government share our beliefs on taxpayer accountability, but I think that we are on the same page on value for money. Governments do not like wasting money, if only because of the ever vigilant Select Committees in another place and the Comptroller and Auditor-General, both ready and willing to criticise. I shall not get into a critique of the Government’s performance on value for money over the past 10 years, because the important thing is that I am sure that there is a desire within government to achieve value for money. Transparency is a weapon in the war to win value for money, and the Bill is designed to improve transparency about government spending, thereby contributing to a climate of openness and debate. Poor value for money should have nowhere to hide.

Before explaining the detailed contents of the Bill, let me set out an important premise on which it is based. The Treasury wants to achieve value for money. That is what I learnt when, many years ago, I spent two years on secondment to the Treasury, and I hope that the Minister can confirm that that remains a core value. The Bill is drafted with significant implementation powers given to the Treasury on the premise that it will want to implement it in a way that exerts the maximum pressure on spending departments to be open about their expenditure. If the Bill passes into law, it could be implemented in a minimalist way—I fully accept that. But my belief is that the Treasury will enthusiastically embrace this approach to openness.

The Bill is entitled the Government Spending (Website) Bill. I had hoped that it would be called the slightly sexier Government Spending (Transparency) Bill, but I was told, politely but firmly, by our excellent Public Bill Office, which has helped me enormously with the Bill’s preparation, that “transparency” is a slogan, and slogans are not allowed.

Clause 1(1) sets out the basic requirement that:

“The Treasury shall create, or cause to be created, a publicly searchable website containing information about expenditure by all government departments and executive agencies”.

There has to be a website, it has to be publicly available, and it has to be searchable. In essence, once it is up and running, citizens can go online to find out, for example, how much the Government have spent with individual suppliers such as EDS, or on particular things, such as travel and entertainment.

Subsection (2) provides that it does not apply to expenditure out of the Scottish or Welsh Consolidated Funds. That is not because transparency and value for money are unimportant in Scotland and Wales, but because they are devolved matters. I hope that if the Bill becomes law, the other Administrations will want to follow suit with their own transparency laws. Subsection (3) makes it clear that there should be no payment for access to the website because barriers to openness would be wholly inappropriate.

Clause 3 gives the Treasury power to specify the content of the website and its availability. Some of this is easy, such as the hours of access. Other aspects are much more technical, such as the classification or coding systems to be used. The Treasury is clearly in the best position to determine how the database should be constructed.

Clause 3(2) allows the Treasury to specify different information for different amounts of expenditure. It may be appropriate for less information to be available for amounts below a threshold of, say, £25,000. The Bill allows the Treasury to achieve maximum transparency while allowing sensible derogations.

Clause 1(4) to (6) deals with the time the information is available, from 30 days after expenditure to five financial years thereafter. This is to allow comparisons to be made over time.

Under Clause 1, the website applies to government departments and executive agencies, but much government money is actually spent by other bodies. For example, most of the Department of Health’s budget is spent by various NHS bodies—strategic health authorities, primary care trusts, NHS trusts and NHS foundation trusts. Any examination of how the £100 billion pounds of the Department of Health budget is spent will need to follow that money through the system. Clause 2 gives the Treasury power to extend the website to public sector bodies that receive government money, but it would not require private sector companies or charities to open up their books if they get public funding. This places a proper boundary on the ability to follow public money.

I am well aware that bringing other parts of the public sector within the website could raise practical issues. I have some knowledge of NHS accounting systems and it would not be an understatement to describe them as diverse. If the website is extended to the NHS, which I certainly hope it will be, it will be important for the practical issues of coding and consistency to have been addressed first.

Political issues could also be at stake. Because of the way that the licence fee is structured, the BBC could be required under Clause 2 to bring its expenditure within the website. I personally think that that would be a good thing, but I recognise that it would not be without controversy and should be decided by Parliament. That is why, in Clause 8, I have made the power in Clause 2, which is to extend the website beyond government departments, subject to the affirmative procedure.

The Bill contains relatively few exemptions from disclosure because it is based on the presumption of openness. The Freedom of Information Act 2000 has more exemptions but the scope of that Act goes way beyond how money has been spent and covers policy matters and details of dealings between the Government and others. For historical records of expenditure, the exemptions should be very few in number. Clause 4, however, contains important exemptions for information that would prejudice national security and related matters. Those are in line with the exemptions found in the Freedom of Information Act.

Clause 5 makes it clear that the Data Protection Act 1998 is not changed by this Bill, so private information about civil servants’ salaries, for example, benefit payments or the tax affairs of individual taxpayers will remain private.

Clause 6 gives the Information Commissioner an important power to examine compliance, and subsection (2) allows the relevant Secretary of State to make regulations to facilitate the use of these powers.

The philosophy of the Bill is to trust the Treasury to want to implement it in a way that achieves maximum transparency and value for money. But it is also right that there is scrutiny by Parliament, so Clause 7 provides that the Treasury must prepare a report each year on the use of the website and, crucially, the effectiveness of the website in allowing public access to information about government spending. The report would be laid before both Houses of Parliament and I am sure that one or more parliamentary committees would take an interest in the way that the Bill was implemented. I express a personal hope that a committee of both Houses dedicated to the availability of information for the public could be set up, but that is a question above my pay grade.

In relation to the Bill itself, I should finally mention commencement. Under Clause 9, the Act comes into force one year after it is passed. That one year is to allow the Treasury to create the website and set the detailed rules and procedures. I believe that is a reasonable timeframe for an initial website, bearing in mind that the complexities of, say, the NHS, do not have to be addressed at the outset. The Bill asks, in effect, for only a pretty basic website. Over time, I am sure that the website could be made richer in content and more sophisticated in functionality. The best can be the enemy of the good, and there is no harm in starting in a modest way.

What will all this cost, and can it be done? The US Federal Funding Accountability and Transparency Act 2006, which is the original inspiration for my Bill, is already law in the US. The Congressional Budget Office estimated a cost of $4 million in the first year and about $15 million in total over the first four years. Surely it cannot be any more expensive to do the same thing in the UK. I do not believe that a figure of £2 million in the first year and £7.5 million over four years cannot easily and willingly be found in the Treasury’s existing budget of around £180 million a year.

I have a passionate belief in the power of open and transparent information in achieving value for money. I hope that passion is shared by other noble Lords. I commend the Bill to the House.

Moved, That the Bill be now read a second time.—(Baroness Noakes.)

My Lords, I congratulate the noble Baroness, Lady Noakes, on introducing this Bill. There is a pretty widespread sense of unease across the country that the Government have spent very much more on public services, but that the additional output and improvement in services has not been seen to be proportionate. A frequently asked question is, “Where has all the additional money gone?”. Under existing accounting rules and practices, it is extraordinarily difficult for a Member of your Lordships’ House, far less an ordinary citizen, to answer that question and to discover in any detail whatever how government expenditure has been incurred and spent. Therefore, this Bill opens a window into this largely closed world, which many citizens and specialists in particular policy areas would greatly welcome. Therefore, we support the Bill.

At the very least, the fact that there was greater openness would cause both civil servants and those bidding for contracts to think even harder than they do about value for money. If I and the noble Baroness, Lady Noakes, and anyone in the country can look up a particular area and see in some detail how money is being spent, we can exercise what judgment we have on whether value for money has been sought and achieved. Whether it is a civil servant or a consultant—I declare an interest as a consultant who sometimes bids for public sector contracts—if we think that someone is able to look over our shoulders, that is a very good constraint on all concerned.

What, then, can the objections be to such a Bill? First, there could be a technical objection that it cannot be done and it is far too complicated. Secondly—I am not sure whether the noble Baroness mentioned this—there is the question of commercial confidentiality. It could be said that in dealing with many aspects of government policy, the Government are contracting with someone to deliver or provide something, and it would be completely improper for the details of that contract to be made public. The answer to both those questions lies in the Federal Funding Accountability and Transparency Act in the United States. Frankly, if the US federal Government feel that they can do it and that commercial confidentiality is not an over-riding constraint, those arguments should fall here.

I am extremely grateful to the noble Baroness for directing me to the White House website—not a website that I usually frequent. Two things struck me about the information that it gave about the Act, as it now is in the United States. The first thing is the extent to which it felt able to go down to pretty small contracts. I think the noble Baroness mentioned £25,000. The United States has gone down to $25,000, and it will publish details of expenditure down to that quite fine-grain level, which is very impressive.

The other thing, which I hope might infuse our discussion, is that this was a bipartisan Bill in the United States. The President warmly signed it, it was supported by people on all sides, and one of its principal sponsors was Senator Barack Obama from Illinois, who is as near to new Labour, despite his wobble on Iraq, as you can get. Here we have a Bill that, in the United States, has bipartisan support, has been accepted as practicable and has been signed into effect. Therefore, although I do not necessarily want to follow American policy, I respect it, and I believe that this is one area in which we could usefully follow it.

My Lords, I thank the noble Baroness, Lady Noakes, for placing the Bill before the House so that a select group of your Lordships may consider this very important issue.

The Government view the provision of public spending information that is clear, concise, timely and accurate as extremely important. I agree with all the points that the noble Baroness made at the beginning of her speech. Our view is reflected in the fact that one of the Treasury’s formal objectives, as set out on its public website, is to,

“achieve world-class standards of financial management in government”.

The noble Baroness asked for confirmation that value for money is still a core value of the Treasury, and I confirm that it is.

The noble Lord, Lord Newby, asked what the objections are to the Bill. The Bill may appear to imply that the Treasury does not currently make up-to-date and comprehensive government expenditure information freely available. On the contrary, the Treasury’s public website, which had well over a million hits last year, already contains a great deal of information about public spending. This includes: copies of the central government supply estimates for a five-year period, which contain detailed departmental spending plans for a particular financial year; and copies of public expenditure statistical analyses going back to 1999.

Each publication contains detailed spending information covering a number of outturn years, as well as spending plans for future years. Data are broken down in a variety of ways, and include departmental groups, central and local government, and public corporations by country, region, and function. They also include copies of the Budget and Pre-Budget Reports going back to 1998; detailed information about Treasury spending controls, including past and forthcoming spending reviews that set budgetary limits on spending by government departments; and the public sector finances databank, which is updated monthly and contains runs of data for various aspects of expenditure and finance.

This list is by no means exhaustive but, I hope, gives a flavour of the large amount of public expenditure information that is already made available on the Treasury’s public website. This is in addition to the expenditure information available on other government department websites, such as departmental reports. Such reports also provide information on public service agreements to show not only how much we spend but, just as importantly, what we are achieving with those resources.

Crucially, work is already under way in the Treasury to further expand the quantity of expenditure information on the public website, as well as to restructure the information to make it easier to navigate and search. This means that the public website will, additionally, hold detailed background and guidance material related to public spending issues. The Treasury’s aim is to have this enhanced website material in place on its public website later this year.

This Bill’s requirement—the creation of a new website specifically for spending data—would be contrary to the recommendations arising from the review of public services by Sir David Varney, Service Transformation: A Better Service for Citizens and Businesses, A Better Deal for The Taxpayer, which was published on 6 December 2006. This review, which is available on the HMT’s public website, recommends,

“a freeze on the development of new websites providing citizen or business e-services created by departments, agencies and non-departmental public bodies, unless authorised by the Ministerial Committee on Public Services and Public Expenditure Sub-Committee on Electronic Service Delivery”.

It also recommends that,

“by 2011, almost all citizen and business e-services migrate to Directgov and and all e-transactions are provided through these two primary websites. This means that all departments should then have one corporate website, utilising shared infrastructure, and all other sites will be closed”.

The Varney review was referred to in the main Pre-Budget Report document, also published on 6 December, which again is available on the Treasury’s public website. It stated:

“The Government strongly welcomes this report and will take forward its recommendations as a comprehensive service transformation programme”.

While I would argue that the reasons that I have given thus far are sufficient to justify this House expressing reservations about this Bill, I feel that I should also refer to one of the Bill’s specific provisions. Section 1(4) requires that,

“information about expenditure by government departments or executive agencies must be available on the website within 30 days of the date on which the expenditure was incurred”.

Although the Treasury seeks monthly expenditure information from all government departments and already makes some information available on its public website, as I have mentioned, such information is inevitably very provisional and could not be regularly produced at a detailed level without a significant impact on resources. It is therefore simply not cost-effective to do this. Most public spending data currently made available relate to full financial years, whether outturn or plans. Audited resource accounts for government departments provide the most comprehensive and accurate information on actual expenditure outturn. The Government have made strides to speed up provision of such information, and faster closing of resource accounts now requires that they are presented to Parliament before the Summer Recess. What is most important is that detailed, accurate and independently audited information about public spending is made available as soon as it is reasonable to do so.

Before I conclude, may I deal with three points? The first point was raised by the noble Lord, Lord Newby, on the improvement in public services. As the noble Lord knows, departments agree public service agreements with HM Treasury to show the main aims for which the resources are used. These targets are published by all departments. Secondly, I can confirm that the role of the Treasury includes ensuring value for money for public spending, a point that I have made before. The Treasury agrees service targets with all departments. Finally, the noble Baroness, Lady Noakes, and the noble Lord, Lord Newby, mentioned the American Bill. That Bill applies to all spending over $25,000 but it applies only to federal awards, mainly grants and contractual payments. As we know, a great deal of American spending is at state level.

In conclusion, I would urge noble Lords to consider the points that I have made and to conclude that detailed government spending information is already made freely and publicly available and that setting up additional government websites would be contrary to work currently underway to improve the provision of public information and service delivery through government websites.

My Lords, I thank both noble Lords for taking part in today’s debate on my Bill. In particular, I thank the noble Lord, Lord Newby, for supporting it and for pointing out the important behavioural impact that the Bill would have on civil servants and on those who deal with government. They would know that information about their actions would be available if the Bill became law. I also thank the noble Lord, Lord Newby, for pointing out that if it can be done in the US, then we can do it in the UK.

Naturally, I was a little disappointed by the response of the noble Lord, Lord Evans. He started by providing a long list of the information already available on the Treasury’s website and on other departmental websites. I accept that a large amount of individual information is available, but the Minister did not address the point of my Bill—the provision of a single publicly searchable website on which information on expenditure would be brought together. At the moment, you can access various parts of Treasury’s website and perform multiple searches; you might obtain a few bits of information; but you certainly would not be able to answer the sorts of questions that should be answerable—for example, how much was spent on EDS and on travel and entertaining. Information at that level is not provided; only a different type of information is provided, not information on value for money.

My Lords, it may be helpful if I remind the noble Baroness that I said that work was already underway in the Treasury to produce a single website that will be the one that the public go to. That recommendation by Sir David Varney has been accepted by the Government.

My Lords, I was going to say that I was grateful also for what the Minister said about the work that was being undertaken to expand the available information. We shall have to wait and see what information is made available.

The Minister referred to Sir David Varney’s report, but that was aimed at service delivery, not at value for money in public expenditure, which is completely different. The Minister mentioned that that would have to go through a ministerial committee; I am talking about a Bill that would be approved by Parliament, and that is a separate issue. We should not confuse what Sir David Varney was considering with the aim of this Bill.

The Minister raised some detailed points. He said that the US Bill covers only federal expenditure and that a lot happened under state law. That is indeed the case, but the US Bill also covers the ability to trace through sub-awards, and many of those go through the states. So it is quite powerful when fully implemented, which it is not initially. Just as my Bill has a phased implementation, so, too, does the US Bill.

The noble Lord also referred to information not being available within 30 days. That, too, is based on the US legislation. If information is captured within 30 days of expenditure, it should be capable of being accessed via a website. It does not need to be intermediated through some Treasury information system; it just needs to be available. That is the whole point of my Bill: it is about openness and transparency and about ensuring that there are enough powers to make government departments make all this information available in the right sort of detail.

I had hoped for a warmer welcome from the Treasury, because the Bill is about giving it more weapons in the battle to get value for money. I hope that the House will look favourably on my Bill, and I certainly hope that it will give it a Second Reading today.

On Question, Bill read a second time, and committed to a Committee of the Whole House.

House adjourned at 4.25 pm.