Public Accounts

Part of the debate – in the House of Commons at 6:30 pm on 26th January 2006.

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Photo of Theresa Villiers Theresa Villiers Shadow Chief Secretary to the Treasury 6:30 pm, 26th January 2006

I am delighted that my first speech at the Dispatch Box concerns the hugely valuable work of the Public Accounts Committee. For well over 100 years it has been keeping a watchful eye on the activities of the Government and the way in which they spend the money of British citizens.

In the period of the Committee's work that we are considering today, it has continued its long tradition of producing hard-hitting reports, which I believe have had a significant impact on the work of the Government and the way in which they carry forward their policies. There can be few more important tasks for a parliamentarian than to scrutinise the spending of taxpayers' money. I pay tribute to all the members of the Committee and its Chairman, my hon. Friend Mr. Leigh, for carrying out their watchdog role in such an effective and dedicated manner. I should also like to join others in paying tribute to the staff of the Committee and to Sir John Bourn and his staff at the National Audit Office for their detailed, dispassionate and tireless work in this area.

My hon. Friend made, as one would expect, a wide-ranging speech on the work of the Committee over the past 18 months, the themes of which I will return to in my speech. Jon Cruddas talked in depth about population growth issues in his constituency and statistical analysis of demography, and its impact on social cohesion and infrastructure provision in his area. Mr. Heath chose three themes: mismanagement, referring to IT disasters, which cropped up several times during the debate, misguided application of policy, in particular the Qinetiq project, and fraud and the crisis in the tax credit system. Helen Goodman spoke of improving the methods of the PAC and expressed concerns about some of the IT programmes that the Committee had looked at, describing them with accuracy as often a triumph of hope over experience. My hon. Friend Mr. Bacon gave us an in depth account of what can go wrong with private finance initiatives and hospital provision. Sarah McCarthy-Fry informed us that applying accountancy skills and effective project management could have a tremendous benefit if applied more widely in public procurement matters. My hon. Friend Greg Clark emphasised the importance of robust bodies not accountable to the public or the marketplace, and spoke in rather frightening terms of a para-state which is difficult to interrogate properly. Kitty Ussher referred to smart procurement and paid generous tributes to her colleagues on the Committee. I agree with her that in many ways the PAC is the voice of the people in keeping track of their money. Finally, my hon. Friend Mrs. Miller spoke with great insight into and information about child care problems and the PAC report on early years.

Given the Committee's vast output and the late hour I cannot hope to cover all the reports. Instead I shall focus on a few of the more striking conclusions. Also I shall look to the lessons for the future. I should like to take this opportunity to point out how it would be useful to those embarking on preparations for the London Olympics to read some of the reports that we are discussing. That would help them avoid many of the mistakes that have characterised Olympic projects in the past. My constituents in Chipping Barnet are among the council tax payers expected to pick up the bill for the 2012 games. It is my fervent hope that the Government and the various organisations preparing for the Olympics follow the wise advice of the PAC in effective planning and project management. Let us hope that in a few years' time we are not standing here discussing a coruscating PAC critique of overspend on the 2012 games.

As we have heard this afternoon, much of the work of the PAC focuses on achieving value for money in the public services. As the Chairman pointed out, there can be few issues more central to modern political discourse than this one. The sums at stake are huge. The Comptroller and Auditor General has calculated that a mere 1 per cent. efficiency improvement in the spending allocated to Departments over three years could release £14.5 billion to redeploy on front-line services. I find it difficult to believe that the Government's Gershon review or the Opposition's James report would have been initiated without the trailblazing work of the PAC; nor might we have seen the creation of the Government's departmental capability reviews without the PAC's bringing pressure to bear on achieving value for money for the taxpayer.

Although some of the issues addressed by the PAC are complex in the extreme, much of its advice is a matter of simple good housekeeping and sensible project management. Time and again, it has emphasised the importance of carrying out an effective and thorough planning process—a theme mentioned already today—including an in-depth assessment of potential risks and problems; of ensuring that all timetables are realistic; of breaking down complex projects into smaller, more manageable components; of putting in place reliable back-up plans to maintain services in the event of problems; of retaining a strong management grip on all projects at all times; and above all, of acting commercially when procuring services from the private sector, and applying hard-headed commercial common sense to contract negotiations. I am sure that Members in all parts of the House will regretfully agree that the reports that we are discussing today demonstrate that the PAC's message has yet to percolate widely throughout Whitehall. Good practice in one Department too often fails to spread across to others. Examples still abound of projects on which taxpayers' money is wasted because of poor planning, and of lessons from past failures not being learned.

The PAC's report on Operation Telic identified worrying mismanagement that exposed troops in Iraq to increased risk as a result of inadequate supply of important equipment. We heard this afternoon about the notorious case of the Ministry of Defence's purchasing eight Chinook HC3 helicopters for some £250 million, only to find that they were unusable. The report described this as

"one of the worst examples of equipment acquisition that the Committee has seen".

In its report on asylum decisions, the National Audit Office estimated that up to £500 million could have been saved if the Home Office had been able to put in place sufficient staff and infrastructure to meet the significant rise in asylum applications in 1999 and 2000. Sadly, we are all too well aware that a recurring theme in the PAC's deliberations is IT projects that go horribly wrong. In the most recent of many reports on this issue, the PAC expressed concern that the systems set up by the Government to prevent procurement disasters, such as the gateway review process, are too often overridden. A case study in how such projects can go wrong is set out in the PAC's damning report on the Criminal Records Bureau, and in its report on the transfer of GCHQ computers. The cost of that transfer was initially estimated at some £41 million; it eventually rose to nearer £450 million.