Accounts and records of Council

Higher Education Bill – in a Public Bill Committee at 3:00 pm on 10th February 2004.

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Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale 3:00 pm, 10th February 2004

I beg to move amendment No. 124, in

clause 6, page 3, line 8, leave out

'give the Secretary of State'

and insert 'provide to Parliament'.

Photo of Jimmy Hood Jimmy Hood Chair, European Scrutiny Committee, Chair, European Scrutiny Committee

With this it will be convenient to discuss the following amendments: No. 123, in

clause 6, page 3, line 10, leave out subsection (3).

No. 129, in

clause 6, page 3, line 14, leave out from 'General' to end of line 16.

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

The Minister and other members of the Committee may have a small sense of Groundhog Day on seeing the amendment because it is similar to some that we have just debated. I am sure that the Minister will reiterate that he is not in a position to accept the amendment, which relates to changing reporting requirements from a report being made to the Secretary of State to a report being made to Parliament. We also seek to delete the strong language relating to things being prepared in the form required and at the time required by the Secretary of State.

Now that we are discussing amendments to clause 6, which deals with the form in which the Secretary of State is likely to require accounts to be presented, I wonder whether the Minister will take the opportunity to let us know a little about the expected accountancy requirements and specifications that are likely to be laid upon the arts and humanities research council. Are they likely to differ significantly, or at all, from those that presently apply to the Arts and Humanities Research Board? Given that the explanatory notes set out that one of the purposes of the provisions is to streamline the research councils and enable the arts and humanities research council to benefit from the structures that have been put in place for the other research councils, is there a particular template or a preferred accountant? Does Research Councils UK have a collective accountant who operates for them?

Later on in clause 6, not least in the provisions that would be subject to amendment No. 129, there are references to the Comptroller and Auditor General, whose role is to look after the public interest and to be accountable to Parliament, but what is the Minister's expectation of the accountancy arrangements that the arts and humanities research council will put in place? Would the Minister explain whether his Department—or the Department of Trade and Industry, which in future will have responsibility for such matters—intends to use the arts and humanities research council and other research councils as a means of demonstrating best practice? That would encourage universities, with which the research councils would undoubtedly have many dealings, but which are somewhat more independent than the research councils, to follow a particular template.

The Government have an opportunity to establish whether they believe that there is a preferred accountancy model. Is there a preferred accountant

that the Minister is encouraging research councils to do business with? Would there be a joint letting of a contract to one or more accountants, or would the research councils be expected to make their own separate arrangements? What is the current position? Perhaps the Minister will be able to clarify that.

Does the Arts and Humanities Research Board, which we established this morning has an observer position at the moment on the board of Research Councils UK, have different accountancy arrangements from the other research councils, or has there already been a degree of integration, consolidation and consistency in that field?

Given that amendment No. 123 suggests that the Opposition have some reservations about the requirements relating to the form and the time being required by the Secretary of State, it might be convenient to point out to the Committee that there is a reference in subsection (4) to 30 November, a date to which the Minister made reference earlier. He pointed out that, on past precedents, that was when the Secretary of State receives a report on the previous financial year.

Subsection (4) states that the accounts must be

''given . . . to the Comptroller and Auditor General on or before 30 November''.

Amendment No. 129 would remove that specification. Does the Minister hope that that date would move forward? His earlier remarks established that material comes to the Secretary of State on or around 30 November. It is conceivable that material might go to the Secretary of State and to the Comptroller and Auditor General on the same day. Is that sensible? What has been past practice?

Under current practice, the Secretary of State receives the material on 30 November. The Comptroller and Auditor General could therefore have the report on the same date, without comment from the Secretary of State. The Minister has pointed out the potential advantages of the Secretary of State or his officials making a commentary on that material before they receive it.

What is the Government's view on the accountancy practices of research councils? How do they expect things to change with the transition from the board to the council? Can the Minister reiterate why there needs to be such a prescriptive format for the presentation of those matters and why he wishes to reject amendment No. 123. Can he develop his argument about the importance of 30 November?

Photo of Mr David Rendel Mr David Rendel Shadow Minister (Higher Education), Education & Skills

I wanted to carry on from the point where I was interrupted earlier, Mr. Hood. You directed me to come in on clause 6, although I notice that clause 4(1) also mentions accounts.

Photo of Jimmy Hood Jimmy Hood Chair, European Scrutiny Committee, Chair, European Scrutiny Committee

Order. I am sure that the hon. Gentleman is not debating the Chairman's ruling.

Photo of Mr David Rendel Mr David Rendel Shadow Minister (Higher Education), Education & Skills

Not for a moment, Mr. Hood. I would not dream of ignoring your ruling, which is why I sat down as soon as you made it.

There is an interesting, if rather nice, constitutional point here about the precedents between the Government and Parliament. The Sharman report made it clear that Parliament votes the money for everything that the Government do, so reports on how that money has been spent should come back to Parliament. Clearly, Parliament may then question the Government about the way in which that money has been spent and how they handled the vote they were given. There is an argument to be made in line with the Conservative amendment. As that money has also been voted by Parliament—albeit indirectly—the reports should come back to Parliament in the first instance. Can the Minister comment on that matter?

Photo of Alan Johnson Alan Johnson Minister of State (Education and Skills) (Lifelong Learning, Further and Higher Education)

I shall try to cover the points raised. The hon. Members for Westmorland and Lonsdale and for Newbury have strayed into wider areas, but I should like to return to the amendment.

Amendment No. 124 would remove the requirement for the AHRC to provide a statement of accounts to the Secretary of State and transfer that line of reporting to Parliament. That is the Groundhog Day element of the matter. It is sensible that the AHRC—like any other public body—should be accountable to the Secretary of State and provide statements to him. We have established that it is cheap to provide the money in that way.

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

The Minister advances an interesting and radical constitutional doctrine. He has just said that all public bodies should be accountable to a Secretary of State, not to Parliament. Is that his view?

Photo of Alan Johnson Alan Johnson Minister of State (Education and Skills) (Lifelong Learning, Further and Higher Education)

I hesitate to point out that, ultimately, the statement will come to Parliament via the Comptroller and Auditor General. That was the hon. Member for Newbury's point. It is right that it should be provided to the Secretary of State first.

Similarly, in the case of amendment No. 123, as the Secretary of State will be allocating the funding, it is only appropriate that the AHRC provides statements of accounts for each financial year in accordance with the specification from the Secretary of State that we discussed in a similar amendment.

Amendment No. 129 would remove the requirement for the Secretary of State to transmit to the Comptroller and Auditor General a statement of accounts in a specified time period. As specified in clause 6, that time limit is there because it is consistent with the wording of the Government Resources and Accounts Act 2000. That Act requires Departments to send their accounts to the Comptroller and Auditor General by 30 November each year, and there is no intention of changing that requirement, which is governed by an act that governs all non-departmental Government bodies.

That does not differ from the AHRB arrangements. That is exactly how the AHRB operates, except that it has to go through a convoluted bureaucracy, because it is a company limited by guarantee. It reports as a company and to the Charity Commission as a registered charity. The provision will avoid making them go through that process. There will only, therefore, need to be a single report. In the

Government Resources and Accounts Act 2000, 30 November is the latest date set out in statute, but best practice is to lay accounts before Parliament before the summer recess, and that is what the AHRC will be expected to do. That answers the point: the latest date that accounts can be submitted is 30 November, but best practice is that they are submitted much earlier.

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

The Minister is elucidating the point very helpfully. As we all know, technology—in particular, information technology—is marching along rapidly. In the world of e-mail, it is much quicker to produce most documents than was the case some years ago. He referred to 30 November as being written into legislation in 2000. Is it his understanding that Government might be prepared to consider—not immediately or as part of this legislation, but in due course—the case for bringing the date forward? That would reflect the fact that it is now easier to produce reports than was the case some years ago?

Photo of Alan Johnson Alan Johnson Minister of State (Education and Skills) (Lifelong Learning, Further and Higher Education)

My radicalism has run out. I do not think that I can go that far, but it is sensible for any Government to keep arrangements under review. If there is any technology that enables us to improve the accounting arrangements, we should use that.

The other question that the hon. Gentleman asked was about which accountants are used. The AHRB has its own accountants. That will be the arrangement that will apply after it has converted to a research council. Those accountants work with the National Audit Office.

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale

The Minister has answered that part of the question. The other part of it was whether—either now that the AHRB is part of the research councils' family but not itself a research council, or in future when it becomes a research council—he would expect that the research councils collectively, including the arts and humanities one, would share the same accountant or, at least, the same accounting arrangements?

Photo of Alan Johnson Alan Johnson Minister of State (Education and Skills) (Lifelong Learning, Further and Higher Education)

That would not be an expectation. That they use the same accounting arrangements is important, but I do not feel qualified to comment on whether they should use the same accountant. I am not sure whether there is sense in that arrangement, but I will pass the hon. Gentleman's comments on to the DTI.

The hon. Gentleman again asks us to make changes. It is a probing amendment, but I hope that I have given some answers. Making the changes would be inconsistent with the operation and accountability of the existing research councils, all of which have the same requirements. It would also be at odds with the well-established framework of accountability for non-departmental public bodies where public money is concerned. It is right that the statement of accounts be laid before Parliament, as would happen under our proposals. The amendment would prevent their submission to the Secretary of State first. The previous set of amendments removed the Secretary of State altogether.

The set of amendments under discussion does not provide for the Secretary of State to receive the statement of accounts, instead it goes to Parliament; it removes him from asking for the accounts in a form and at a time when he requires; but it reintroduces him into the process to transmit each statement of accounts to the Comptroller and Auditor General. That is slightly illogical, but for no other reason than that it would be inconsistent with the current sensible arrangements.

Having given the assurances and the information that hon. Members requested I hope that they either withdraw the amendments or that the Committee rejects them.

Photo of Mr Tim Collins Mr Tim Collins Conservative, Westmorland and Lonsdale 3:15 pm, 10th February 2004

The Minister has once again been able to provide several important assurances and clarifications. I am not sure that we agree with him that our amendments were entirely illogical; after all we would not wish to make the post of Secretary of State entirely redundant. None the less, on the basis of his assurances and considering that he has advanced arguments that he has already used persuasively, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 6 ordered to stand part of the Bill.