The Delivery Authority

Parliamentary Buildings (Restoration and Renewal) Bill – in a Public Bill Committee at 8:00 pm on 4th June 2019.

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Photo of Meg Hillier Meg Hillier Chair, Public Accounts Committee 8:00 pm, 4th June 2019

I beg to move amendment 15, in schedule 2, page 22, line 6, at end insert—

“(10) The Comptroller and Auditor General must have access rights to allow him to examine the preparedness of the Sponsor Body and the Delivery Authority to undertake the Parliamentary building works.

(11) In exercising the power in sub-paragraph (10), the Comptroller and Auditor General must have particular regard to procurement practices and the need to ensure that small businesses have sufficient opportunity to participate in the Parliamentary building works.”

One might expect that I would want to see good auditing of this project, not only because I chair the Public Accounts Committee but because, like all of us, I represent taxpayers, and it will be taxpayers who ultimately fund it. It is also important that the proper audit arrangements are in place to make sure that everybody working on the project is aware that the eyes of the Comptroller and Auditor General and the National Audit Office are on them—that is what I am proposing as the best approach to audit. That approach also brings in parliamentary scrutiny, because under the arrangements of Parliament, the National Audit Office’s reports can automatically be taken up by the Public Accounts Committee. Of course, other Committees can look at the project too, but it means that we would have numbers.

For those who have not been on the Public Accounts Committee, I will set out the process. When the National Audit Office produces a report, the figures are agreed with the audited body. That enables the members of the Committee to focus on the detail rather than arguing about the numbers. The report is an accurate record of what the costs are, but the National Audit Office also looks more widely at the efficiency and effectiveness of programmes, including how business cases are set up and so on. It is really important that we build that in from the outset. A new Comptroller and Auditor General took office on Saturday 1 June; I have not had a chance to discuss this with him in detail, but I have been in touch with the National Audit Office.

In some respects it is possible to do this without an amendment to the Bill, but it is still discretionary. Until this Bill is passed, under section 6 of the National Audit Act 1983, the CAG may be appointed an auditor of a body to which he has not been appointed by statute

“by virtue of any agreement made, whether before or after the passing of this Act, between that authority or body and a Minister of the Crown.”

An appropriately worded agreement would trigger the CAG’s economy, efficiency and effectiveness powers, but of course, we do not know if we can get that. While I would hope the Sponsor Body would embrace that, it would be helpful and not detrimental in any respect to have it in the Bill, so that it is very clear. Of course, in so far as is possible before the Act is passed, the CAG can enter into an agreement that would hopefully mirror his statutory rights.

I am very concerned, though, that we have this in statute—in the law—to embed the National Audit Office’s embrace of this role at an early stage. My amendment proposes that that happens with both the Sponsor Body and the Delivery Authority, and that it starts now, so that the National Audit Office is not looking at this project in 15 years’ time, perhaps when something has gone wrong; we build it in from day one. It would ultimately be for the Comptroller and Auditor General to decide how often he looks at this, but I would suggest an annual approach. Obviously, the National Audit Office would annually look at the accounts, if that were agreed, and would have the ability to produce individual reports on aspects of the project. That would be within the properly independent powers of the Comptroller and Auditor General. My amendment does not directly prescribe what the CAG does, because that would be wrong: he is an independent person, representative of this House and of the tax-paying public. However, it is important to set this out in statute.

There is another element that we may want to consider, and I would be interested to hear the Minister’s views on it. Currently, it is not easy for the Comptroller and Auditor General and the National Audit Office to access a company’s records. They can look at a contract between Government and another body in the private sector or wherever, and will then be able to see certain elements of what is going on with that private company, but the NAO does not have access rights to those companies’ accounts. For the purpose of value-for-money examinations, it might be helpful for the CAG to have unequivocal access to relevant information that contractors, subcontractors and grant recipients of the Sponsor Body and Delivery Authority have. I have not put that in the amendment, because I received late advice on how we might approach it, but I would be interested in the Minister’s views.

If we are really serious about ensuring that we are watching taxpayers’ money and that this does not spiral out of control, that level of audit would really hold the feet of the companies working on this project to the fire. They would know that everything they did would be available. I should be clear that under audit rules, that would not necessarily be public information; the National Audit Office would have access, but there would still be considerations about whether it was published. It would not be an open and published document, but the National Audit Office would have access rights, as it has with the BBC and the Bank of England, two recent additional audits that it has done.

Photo of Mark Prisk Mark Prisk Conservative, Hertford and Stortford

I understand the point about the Comptroller and Auditor General. As I understand it, he reports to my hon. Friend’s Committee, the Public Accounts Committee. I just want to be clear in my own mind about the relationship between the PAC and the Sponsor Body, and whether there is a risk that two horses might be running at one time, particularly in the scrutiny process.

Photo of Meg Hillier Meg Hillier Chair, Public Accounts Committee

I am very happy to explain. The Comptroller and Auditor General is an officer of the House and accountable to Parliament. His role—it is currently a he—is to make independent decisions about value for money. He also undertakes, as he is doing right now, audits of over 700 public bodies that fall within the purview of the National Audit Office.

In constitutional terms, the Public Accounts Committee has been in existence for more than 150 years and has the first right of refusal if the Comptroller and Auditor General produces a value-for-money audit report or carries out an investigation. Other Members and other Committees of this House can ask the National Audit Office and the Comptroller and Auditor General to do some work on an issue, and it is entirely a matter for his discretion whether he chooses to do so. whether the request is from the Public Accounts Committee or from any other Committee or individual Member of this House. There have been occasions when individual Members of the House have asked the National Audit Office to look at something and it has done work that has led to some interesting outcomes. The Comptroller and Auditor General is very much a servant of the House.

The Public Accounts Committee, as the Minister highlighted, is a cross-party Committee, reflecting the balance of Parliament at the time and always chaired by a Member of the Opposition. Our job is to examine, through the audit process, what has happened. It is not to direct policy; we strictly do not discuss or make a judgment on whether a Government policy is the right thing. We are looking at the execution, efficiency, effectiveness and economy of that policy.

It could be that there is a policy that I, as an Opposition Member, vehemently oppose, but as Chair of the PAC I am looking not at the policy, but at the effectiveness of it. It has been the case for more than 150 years that members of the Committee take a clear and balanced view based on the facts presented by the National Audit Office. One of the benefits of having the National Audit Office involved is that the figures it produces in a report must be agreed with the body on which they have done a value-for-money study, so once that report is taken by the Committee, the Committee is sure that the numbers are correct and accurate and there is no argument about the figures. Those figures then become a matter of record for the House.

Of course, that does not preclude any other Select Committee investigating; we could, for example, have the Digital, Culture, Media and Sport Committee looking at some of the craft skills, or the Business, Energy and Industrial Strategy Committee looking at some of the industrial impacts of the work. Constitutionally, any Committee is free to do its own work, but that is how things stand for the Public Accounts Committee. There is absolutely no conflict there.

It is important—I hope the Minister agrees—that even if this is not perfect yet, we seek advice from the National Audit Office and others about how we can ensure we get the most effective scrutiny of this multibillion-pound taxpayer-funded project, so that after the Committee stage and once the Bill is passed, we can reassure our constituents that we have written into the Bill the strongest possible audit of the value for money of this project.

Photo of Kevin Foster Kevin Foster Assistant Whip, The Parliamentary Under-Secretary of State for Wales, The Parliamentary Secretary, Cabinet Office

I welcome the spirit of the speech and the hon. Lady’s approach. From my perspective, we believe the Comptroller and Auditor General has a range of powers over this, and it is worth noting that the role he would play is specifically referred to in schedule 2 at the bottom of page 21, where, again, it says that the Comptroller and Auditor General “must” send a copy of the statement of accounts—it does not say “may”.

At this stage, including the amendment is not necessarily the approach I would suggest we adopt in this Committee, but certainly, once the Sponsor Body is up and running and has agreed on engagement with Parliament, it is almost unimaginable that, as a project having a large amount of public funds spent on it, it would not look for strong engagement from the Comptroller and Auditor General, and look, bluntly, to how its own existence came about. A strong Public Accounts Committee report was exactly what persuaded the House to support the decant option, against the arguments of several hon. Members who were not too fond of that option, but who understood the logic. Certainly what persuaded me to vote in a free vote for the full decant option was reading the Public Accounts Committee’s conclusions, which were based on the NAO’s work on which option would represent the best value for money. Making the amendment to the schedule at this stage might not be the most appropriate thing, but I am more than happy for us to take it away and reflect on the structure.

When it comes to agreeing the relationship between the Sponsor Body and Parliament, it is almost inevitable that we will need to consider closely the relationship with the Comptroller and Auditor General, especially in terms of when the estimates come forward. It would be hard to imagine that many Members of the House would not look to the quality of the assessment done by the Comptroller and Auditor General and then the conclusions the Public Accounts Committee has drawn in relation to his or her work.

Photo of Neil Gray Neil Gray Shadow SNP Spokesperson (Work and Pensions)

I note that the Minister referred earlier to a slightly different area, which was how the project could be beneficial across the United Kingdom. Perhaps this would be an opportunity for the Minister to reflect briefly on amendment 1.

Photo of Kevin Foster Kevin Foster Assistant Whip, The Parliamentary Under-Secretary of State for Wales, The Parliamentary Secretary, Cabinet Office

Certainly. I will briefly finish referring to the issues around the Comptroller and Auditor General, and then, with the Chair’s permission, I will perhaps make some brief references to amendment 1 in the context of procurement practices and spreading things out.

Photo of David Hanson David Hanson Labour, Delyn

I should tell the Minister that amendment 1 was not selected. If he wishes to comment, he may want to reflect on the issue without mentioning the words “amendment 1”.

Photo of Kevin Foster Kevin Foster Assistant Whip, The Parliamentary Under-Secretary of State for Wales, The Parliamentary Secretary, Cabinet Office

As always, I will be guided by the sage advice on procedure that you provide, Mr Hanson.

There is a view that making an amendment that gives additional powers and functions to the Comptroller and Auditor General would be unusual. It would not normally be considered an appropriate change, but I hope the hon. Member for Hackney South and Shoreditch will take from my comments the value that is definitely placed on the role of the Comptroller and Auditor General, the NAO and the Public Accounts Committee.

Photo of Mark Prisk Mark Prisk Conservative, Hertford and Stortford

To be clear, from what I have heard from the hon. Member for Hackney South and Shoreditch who chairs the Public Accounts Committee, there is the option, where the Sponsor Body has concerns about a particular aspect, for it to approach the Comptroller and Auditor General and commission certain works—whether he takes them on or not—and the Comptroller and Auditor General would then report directly to the Sponsor Body or through the PAC to the Sponsor Body. We need to be clear about who is talking to whom and who is commissioning what from whom.

Photo of Kevin Foster Kevin Foster Assistant Whip, The Parliamentary Under-Secretary of State for Wales, The Parliamentary Secretary, Cabinet Office

To be clear, at the bottom of page 21, at line 40, the measure states:

The Comptroller and Auditor General must…examine, certify and report on the statement of accounts”— supplied to him by the Delivery Authority—

“and…send a copy of the certified statement…to the Sponsor Body as soon as practicable.”

It is almost unimaginable that that work would not then be subject to questioning in Parliament and via the usual processes that the Public Accounts Committee can use to oversee the work of the NAO.

Photo of Meg Hillier Meg Hillier Chair, Public Accounts Committee

Any parliamentarian can ask the National Audit Office to do a value-for-money study on anything. It is unusual for Departments to ask for work to be done, but it would be normal that the Comptroller and Auditor General made his own decisions. It might be that the Public Accounts Committee requested that. My vision is that we would have regular value-for-money studies on every aspect along the way. A responsible Sponsor Body, which I believe we have—members of it are represented here—would welcome that scrutiny.

Photo of Kevin Foster Kevin Foster Assistant Whip, The Parliamentary Under-Secretary of State for Wales, The Parliamentary Secretary, Cabinet Office

I thank the hon. Lady for her comments and laying that out. As she rightly says, it would not be for the Government to direct the work of the Public Accounts Committee; that is for the Committee itself. Turning to page 22, it is worth noting that the measure states:

“The Sponsor Body must, in respect of each financial year, lay before Parliament a copy of the certified statement and report sent under sub-paragraph (7)(b).”

It would not only be internal to the Sponsor Body; it would be laid before Parliament as well.

Briefly, in terms of looking at how we achieve value for money, many people across the United Kingdom would be keen to see all the UK involved—I know you, Mr Hanson, will want north Wales to play a firm role. However, people will obviously think, “Is this just about spending money in London?” I am conscious that some people have suggested there should be a mechanism to divide the work across the country, but that would slightly miss the point of the project. When the Scottish Parliament and the Welsh Assembly were built, there was not a divvy-up of money across the different parts of the United Kingdom. It reflected the fact that that was a unique project.

However, that does not mean that money for a project in London needs to be purely spent in London, given the ability to spread procurement across the country and make sure that there is a fair balance across our entire Union. Therefore, it would not be appropriate to consider as a policy suggestion the type of mechanism that we have been discussing; it has not been created before.

Photo of David Hanson David Hanson Labour, Delyn 8:15 pm, 4th June 2019

And the Comptroller and Auditor General having access rights to examine this issue in detail, as in the hon. Lady’s amendment.

Photo of Kevin Foster Kevin Foster Assistant Whip, The Parliamentary Under-Secretary of State for Wales, The Parliamentary Secretary, Cabinet Office

I thank you for your comments, Mr Hanson. As I say, that is where we are regarding that area.

I fully appreciate the spirit of the amendment and what it is driving at. There will clearly need to be a very strong process of parliamentary scrutiny, including by the NAO and the Comptroller and Auditor General, but there must also be an ability for individual Members to question and hold to account the Sponsor Body on behalf of their constituents. However, at this stage, this would be an unusual amendment to accept, and therefore it is not considered to be the most appropriate course; that is certainly the advice that the Government have received.

Photo of Meg Hillier Meg Hillier Chair, Public Accounts Committee

On the basis of what the Minister has said, I will withdraw this amendment now, but with the right to return to it, perhaps in a simpler form, at a later stage.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 2 agreed to.

Clauses 4 to 8 ordered to stand part of the Bill.