Procurement

Public Accounts Commission written question – answered at on 14 July 2014.

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Photo of Sadiq Khan Sadiq Khan Shadow Minister (London), Shadow Lord Chancellor and Shadow Secretary of State for Justice, Shadow Lord Chancellor and Shadow Secretary of State for Justice

To ask the Chairman of the Public Accounts Commission how much and what proportion of the National Audit Office's budget was spent on activities which were contracted out in (a) 2009-10, (b) 2010-11, (c) 2011-12, (d) 2012-13 and (e) 2013-14; and how much and what proportion of the National Audit Office's budget he expects to be contracted out in 2014-15.

Photo of Edward Leigh Edward Leigh Chair, Public Accounts Commission, Chair, Public Accounts Commission

The majority of the NAO’s contracted work planned in 2014-15 is in financial audit, where additional audit resources are provided by some half-a-dozen private audit firms. The NAO’s partners are chosen through a rigorous process, in line with EU rules on public sector procurement, to ensure value for money. Financial audit work comprises some 55% of the NAO’s total activity and around 20% of the NAO’s financial audit work is outsourced.

The use of private firms to carry out some audits is included in the NAO’s Strategy, approved by the Public Accounts Commission. The current mix ensures that the NAO maintains the breadth of insight into Departments which the C&AG derives on behalf of Parliament from having NAO staff undertake financial audits directly, but also has sufficient exposure to the framework partners so as to benchmark the NAO against the private sector and import best practice. The NAO also uses outsourcing arrangements in its value-for-money or investigations work where specialist skills are required.

Percentage of NAO Activities contracted out
  Actual Estimate
  2009-10 2010-11 2011-12 2012-13 2013-14 2014-15
Professional services brought in (£ million) 17,553 13,678 13,238 11,940 10,409 10,100
Total voted gross expenditure (Audit and Assurance) (£ million) 94,600 92,600 87,700 89,000 84,600 83,000
% of activities contracted out 19 15 15 13 12 12

Total voted gross expenditure (Audit and Assurance) excludes the following exceptional expenditure:

Restructuring of the NAO (£4.2 million in 2013–14)

Refurbishment of the NAO building (£16.2 million in 2009–10)

Temporary accommodation costs (£5.9 million in 2009–10).

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