Public Accounts

Part of the debate – in the House of Commons at 6:50 pm on 26th January 2006.

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Photo of John Healey John Healey The Financial Secretary to the Treasury 6:50 pm, 26th January 2006

We have had a very good debate this afternoon, led by Mr. Leigh, but with a further nine excellent contributions. It is my privilege to respond on behalf of the Government.

The Public Accounts Committee makes a special contribution to our system of parliamentary scrutiny of the Executive. The Government, especially the Treasury, share several common interests with the Committee and the National Audit Office. We have a responsibility to ensure that taxpayers' money is used economically, efficiently and effectively, and we want to see the delivery of public services to a high standard, with both the public and private sector working well together and applying the best practices and standards of management and skills.

We see, from the prolific series of reports that the PAC produces and from the contributions to the debate this afternoon, that the PAC does not pull its punches. But however critical, the Committee mostly operates without being politically partisan. That remains one of its traditional strengths as Parliament's leading inquisitor and champion in challenging the Executive. It is rightly tough on Departments and agencies. Accounting officers sensibly take any appearance before the PAC more seriously than almost any other aspect of their responsibilities.

For those reasons, I pay tribute to the work of the PAC members and, in particular, to the hon. Member for Gainsborough who is starting his sixth year as its Chairman. I wish also formally to recognise and pay tribute to the work of the Comptroller and Auditor General and his staff at the National Audit Office in supporting the Committee. I also wish to add a word of appreciation for Brian Glicksman, for his hard work and his dedication to the Committee. He retired recently after being the Treasury Officer of Accounts for six years and he told me recently that he has appeared before the Committee almost 150 times.

I wish also to welcome Mrs. Villiers, who delivered her first speech at the Dispatch Box this afternoon. It was very accomplished and a good contribution to the debate. We look forward to many more appearances, as I am sure she does herself. Based on some of the reports before us, she urged us to look forward not only to the challenges of trying to tackle the problem of HIV/AIDS, but to the Olympics. However, she raised some words of caution on that score. I may say that in my experience, there is an unprecedented effort going into putting in place arrangements for good project management in preparation for the Olympics. I am sure that the PAC will follow those developments closely, as will the hon. Lady as shadow Chief Secretary. We in the Treasury will certainly follow closely the work of the various bodies responsible for preparing for and delivering the Olympics.

The hon. Member for Gainsborough drew attention to the Committee's 17th report. I have to say that this is something of a tour de force, encapsulating as it does a decade's worth of the Committee's experience and conclusions. It helpfully draws those together in seven coherent themes which he set out for us this afternoon. Each one contains some potent pieces of advice for the Government. Although in each case the Government are already taking action, the Committee shows us that there is considerable scope to improve in the future. We are studying the report carefully and we will respond point by point within the customary two months. The hon. Gentleman has been able, in a timely way, to use the debate to lay stress on the particular observations to which the Committee wants us to pay close attention.

The hon. Gentleman raised several other important issues. As he acknowledged, we are taking the opportunity afforded by the Company Law Reform Bill to enable the Comptroller and Auditor General to become eligible to audit non-departmental public bodies that are companies, as well as their subsidiary companies. By doing that, we are fulfilling a major commitment that we made in response to Lord Sharman's report on audit and accountability in central Government. I was pleased that the hon. Gentleman described himself as delighted by the move. The Treasury and the Department of Trade and Industry was helped in no small way by the close co-operation of the National Audit Office as the policy and detailed proposals were developed into the firm plans that are now in the Bill. I hope that the Bill will receive a smooth passage through both Houses.

The hon. Gentleman pressed arguments that he has made before on making the BBC subject to the audit arrangements of the Comptroller and Auditor General. The Government are evaluating the existing arrangements for the audit of the BBC. As the hon. Gentleman knows, the NAO already has a role. It seems appropriate to do that evaluation as part of the charter review and we are thus considering whether any further changes are warranted.

The hon. Gentleman asked what had happened regarding the financial management of the European Union following the publication of the Committee's 18th report. He would have heard Ministers say that a key priority of the UK presidency was to ensure that progress was made on the European Commission's initiative of a road map towards what it called an integrated internal control framework—the hon. Member for Chipping Barnet might already be familiar with that. The UK co-chaired a panel of experts from all member states that met in Brussels on 21 and 22 September to examine the matters that were raised by the Commission's proposed road map. The outcome of those deliberations provided the basis of the draft conclusions for the meeting of Economic and Finance Ministers on 8 November. The recommendations of the PAC report played an important role in drafting the conclusions that were agreed at that meeting. The hon. Member for Gainsborough asked for an assurance that Ministers will continue to press for progress. From this point on, UK officials will be working closely with colleagues from not only Austria, but Finland, to ensure that the action points from the plan are taken forward under those countries' presidencies.

Although the Liberal Democrats' Front-Bench spokesmen are increasingly thin on the ground these days, Mr. Heath has showed rather more staying power than many of his colleagues. He had already done sterling work from the Front Bench for the Liberals on the Criminal Defence Service Bill earlier today, but he stayed on to speak in this debate, although I must say that he seemed to be speaking for the Liberals from both the Front and Back Benches. I appreciated the fact that he realised that a lot of the work of Government is good, although he sketched out his three specific worries about mismanagement, the misguided application of policy and fraud.

In a reflective contribution, my hon. Friend Jon Cruddas set out several of his worries about trends in population movement and make-up. He also told us clearly the serious social consequences that they can sometimes have. In preparation for the comprehensive spending review, the Treasury is undertaking an analysis of the demographic changes that the country faces in the long term. I will find out whether some of the general points that he made, rather than, perhaps, his specific ones about local authority grant distribution, can be incorporated into that work.

My hon. Friend Helen Goodman made an extremely reflective contribution to the debate and several of her points will be pertinent to the way in which the Public Accounts Committee approaches its work in the future. She expressed an enthusiasm for more timely reports. We share that appetite, so we are glad that the Comptroller and Auditor General has recently undertaken to try to publish some shorter reports that can be more quickly prepared, such as the recent report on MG Rover on which I believe that the Committee will hold a hearing next month.

I welcomed the contribution of Mr. Bacon. It was something of a milestone, as it was his last speech in the House as a single man. We on the Labour Benches wish him and his fiancée Victoria very well for their wedding this weekend. He spoke about the progress that has been made through PFI procurement and recognised the substantial improvement that there has been, with projects delivered on time and within budget, but he also exposed flaws that the Committee has found in specific PFI projects.

The hon. Gentleman urged me to look closely at the work being led by the Royal Institute of British Architects. I am aware of that work. A meeting of officials in the Treasury is shortly to be held with that group to examine the analysis and conclusions that it has been preparing. I welcome RIBA's contribution to the debate on the design of PFI. We will consider very carefully whether and, if so, how, its proposals can be integrated into the Government's overall procurement policy.

Undertaking enough design up front during the procurement is already in line with the Treasury's policy. We want to ensure that we have a well enough informed public sector client to manage projects properly, and we need to make sure that they have done enough preparation before launching a procurement. Design is an important part of that, but there will clearly be a trade-off, which must be examined, to ensure that the risk transfer is not jeopardised by undertaking too much of the design before involving the PFI contractor.

My hon. Friend Sarah McCarthy-Fry spelled out clearly and convincingly the lessons on good management to be drawn from the private sector, which it is essential that the public sector learn. Her own business expertise before becoming a Member of the House will clearly be a great asset to the Committee. She stressed the importance of good risk management to effective procurement. I am pleased to say that the National Audit Office has complemented the Government's efforts to force home the message that risk management should be embedded in departmental planning, just as she urged, by collaborating with us in the Treasury to publish a guide which we call "Good Practice in Tackling External Fraud".

Greg Clark demonstrated from the Conservative Benches the fresh talent that is being brought to the PAC, although the points that he raised about the cost of changes in the tax credit system relate to the recent hearing, on which the PAC has not yet published its report. He has the answers now, and no doubt he and his colleagues will make a judgment on those and the report will reflect that.

The hon. Gentleman also touched on the problems of the NHS trust in his constituency, and on NHS trust finances more generally. I remind him that three quarters of local NHS organisations are balancing the books or in surplus. I remind him also that the Secretary of State for Health recently announced what she calls decisive action to turn round the minority of NHS organisations that have significantly overspent their budgets. It remains the case that the Government will have trebled investment in the NHS by 2008, and that throughout the country, including in the hon. Gentleman's area, we can see that that investment means extra doctors and nurses, improved quality of treatment and shorter waiting lists for that treatment.