House of Commons Hansard Debates for 17 Oct 1991

Dr. John Cunningham (Copeland) : On a point of order, Mr. Speaker. Exceptionally, before the Leader of the House finishes, in view of the contents of a letter from the right hon. Member for Finchley (Mrs. Thatcher) which has apparently just been published, may I ask him to arrange an urgent statement by the Home Secretary about the Government's position on television franchises?

In a letter to TV-am chief Bruce Gyngell, the right hon. Member for Finchley said :

"When I see how some of the other licences have been awarded I am mystified that you did not receive yours and heartbroken. I am only too painfully aware that I was responsible for the legislation-- " Mr. Speaker : Order. The hon. Gentleman must paraphrase.

Dr. Cunningham : Will the right hon. Gentleman tell us exactly where the Government stand on all this?

Mr. MacGregor : I have not seen the letter, so I would not wish to comment on it. The operation of the system and the allocation of the licences is a matter for the Independent Television Commission, not for the Government. The ITC made the decisions.

Several Hon. Members rose --

Mr. Speaker : Mrs. Clwyd.

Mr. Bob Cryer (Bradford, South) : On a point of order, Mr. Speaker. It relates to the Leader of the House.

Mr. Speaker : No, I called Mrs. Clwyd.

Mrs. Ann Clwyd (Cynon Valley) : On a point of order, Mr. Speaker. You will have seen reports today about events in Kurdistan--they now appear almost daily in the press and on television. It is becoming clearer by the day that the Government's safe havens policy is now failing and that we urgently need a statement from the Leader of the House. Saddam Hussein continues to bomb the Kurdish people ; winter is approaching ; 750,000 people are still without shelter and cannot go back home. Many people are losing their lives as a result of Iraqi mine laying, the Iraqi authorities are blocking both water supplies and repairs to the infrastructure, and Iraqi security forces are refusing to allow the return of hundreds of thousands of Kurds to Kirkuk, creating many no-go areas. Iraq is refusing to sell oil, as recommended by the United Nations, to buy food and medicines. Despite all the promises, the western powers appear to be standing by as the whole awful tragedy unfolds again. We need a statement, and we need it now.

Mr. Speaker : I am sure that the Leader of the House will have heard what the hon. Lady said.

Mr. Cryer : On a point of order, Mr. Speaker. It relates to the Leader of the House--

Mr. Speaker : Well, to me then.

Mr. Cryer : Indeed. Of course, it is your responsibility to ensure that statements are accurate.

Mr. Speaker : That is too heavy a responsibility to put upon my shoulders.

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Mr. Cryer : Indeed it would be. You must ensure, of course, that statements are honest. When the Leader of the House replied to the question about the Bradford hospital trust, he said that national health service patients were not being denied a service, but that is not true.

Mr. Speaker : I do not know about it and that is as may be, but that is just the sort of point that the hon. Gentleman might raise on Monday in the debate.

Mr. Cryer : Very good. Thank you very much, Mr. Speaker : that guarantee is what I have been waiting for.

Mr. Speaker : I was not allowed to finish my sentence. I should add, if the hon. Gentleman is called.

Mrs. Alice Mahon (Halifax) : On a point of order, Mr. Speaker. Perhaps you can help me, because I misunderstood the answer given by the Leader of the House. Which channel will give me the answer because the right hon. Gentleman misled the House as--

Mr. Speaker : Order. Let us keep our standards up here. The Leader of the House would not mislead the House ; he may have misled the hon. Lady. What is the hon. Lady's point?

Mrs. Mahon : Perhaps the right hon. Gentleman inadvertently misled the House. I should explain that the Leader of the House should know that, under the new market system, if one comes from an area that does not provide the screening service--a service which, before the market system, one could get under the NHS--one cannot

Mr. Speaker : Order. We cannot debate that now.

Mr. Dennis Skinner (Bolsover) : On a point of order, Mr. Speaker.

Mr. Speaker : Is it a different point of order?

Mr. Skinner : It is for you. It is about the arrangement of business. You heard from my hon. Friend the Member for Copeland (Dr. Cunningham) about the television franchises and the statement made by the former Prime Minister. I realise that you have a problem, Mr. Speaker, in getting the former Prime Minister into this place to speak, because everyone now knows that she wants additional payments before she opens her mouth. We want to know exactly where she stands. She was in favour of the franchises, but now, apparently, she is against. I have got an idea that might resolve the problem and which you can deal with. If you could arrange for a mini-debate in the Tea Room, where the new Countess of Finchley sometimes turns up, we could manage to get to know exactly why it is that she is weeping tears for Mr. Gyngell of TV-am when she was the one who brought the system in and caused all the trouble.

Mr. Speaker : The hon. Member knows that one of the sadnesses of my present position is that I am unable to go into the Tea Room. I used to enjoy those debates.

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Public Accounts Committee

4.12 pm

Mr. Robert Sheldon (Ashton-under-Lyne) : I beg to move,

That this House takes note of the 33rd to 42nd Reports of the Committee of Public Accounts of Session 1989-90, of the 1st to 35th Reports of Session 1990-91, and of the Treasury Minutes and Northern Ireland Department of Finance and Personnel Memoranda on those Reports (Cm. 1323, 1405, 1462, 1479, 1542, 1582, 1617, 1679, 1685 and 1686) with particular reference to the following Reports : Session 1989-90

Thirty-sixth, Restructuring and finances of universities ; Session 1990-91

Ninth, Sale of the National Bus Company ;

Eleventh, The 1989 Statement on Major Defence Projects ; Eighteenth, A new building for the British Library ;

Nineteenth, Privatisation of work in New Town bodies in England ; Twenty- second, Homelessness ;

Thirty-first, Dock Labour compensation scheme.

Unfortunately, my hon. Friend the Member for Scarborough (Sir M. Shaw) cannot be here and he has sent his apologies.

As usual, what we have for debate today is a number of reports, 45 this year, and 10 Government replies. As usual, a number of the reports have been selected in the motion to draw special attention to them, although many others will be mentioned in the debate. It is extremely difficult to choose half a dozen and the House will note that there are seven on the Order Paper. However, I could have easily selected a dozen and I shall refer to some others, but rather briefly.

My thanks are especially due to the Public Accounts Committee, which meets frequently. Last year, we had the sad loss of Ian Gow, who was a most valuable member of our Committee. Those who did not have the pleasure of seeing him in action in Committee undoubtedly missed a great sight as his forensic skills were brought out to the benefit of the Committee and to the benefit of discovering the truth behind the matters we were examining. The right hon. Member for Hertfordshire, North (Sir I. Stewart) has taken his place and he is proving a valuable member of the Committee.

The most important aspect of our Committee's reports is that they are unanimous. There have been more than 300 reports since I became Chairman and every one has been unanimous. The enormous importance of that, as everybody knows, is that, despite the wide political differences in the Committee on getting value for money, we ensure that the money goes where Parliament intended and to the people to whom Parliament intended it to go. The unanimity ensures that the Government and the civil servants concerned understand the importance of our deliberations.

We welcome the knighthood of the Comptroller and Auditor General, Sir John Bourn, with whom we have an excellent relationship. Naturally, he has complete discretion in choosing investigations, but he also takes into account suggestions by members of the Committee. That also applies to the Comptroller and Auditor-General for Northern Ireland, Bill Jack, and his staff, who also do a valuable job. In essence, the Committee's work is quite simple. When the Government decide on a programme it is generally accepted that we want to know the objective that they have

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in mind. We want that objective quantified so that when they decide what to do about a problem or how to take into account a matter that they feel is worthy of attention, it is monitored. Thus, as time goes on, if mistakes are made or if something happens which the Government had not anticipated, they can make changes before too much money is spent. At the end of that programme or a set period after its introduction, we compare--quantitatively so far as possible--the achievement with the objective. We set out to produce a discipline in Government planning and expenditure by comparing objective with achievement.

I could cite in great detail a number of cases where that has not been done. However, in general, when an accounting officer comes before the Committee he is aware of how we approach those problems. I know the amount of time that those accounting officers, who are often permanent secretaries of Departments, spend in preparing for their visits to us. In general, that time is well spent because they learn something about their Department and provide accountability, which is an essential part of the Committee's work.

There is a continuing scrutiny of the civil service and we accept that civil servants give a great deal of time to it. Although we spend most of our time considering value for money to ensure that the taxpayer is protected as far as possible and that the accounting officer gives a good description of how he has managed his responsibilities, most important of all are questions of fraud and corruption. I always say that everything falls in the face of any questions of fraud and corruption. Many people from the Commonwealth and other overseas countries visit us and ask how we retain our high standards in those matters. I tell them that it is done through constant vigilance and that, once fraud and corruption get a hold, the trouble starts. Honest people prevent fraud and corruption, but once a unit is seething with corruption, to root it out is extremely difficult. We are fortunate to have so many high standards in those areas, but we cannot let up on them for a moment.

During the past year the Committee has noticed the increasing number of accounts that have been qualified. That is a serious matter. The most important example--it does not form part of our debate today, but will come up in the next debate on the work of the Public Accounts Committee--is the Foreign and Commonwealth Office, where there seems to have been a serious breakdown of accounting services. It came about as a result of computerisation in which there were no back-up facilities. When the computer failed, the back-up was not there. One could have expected the back-up to be there. That was a great failure to which we will turn our attention over the next few months.

At the Department of Social Security, there was uncertainty about apportioning costs. Here again there was a qualification of the accounts. Another qualification of accounts--and I give only a few examples--occurred at that Department, where there were many errors in handing out family credits. A recent example occurred at the Ministry of Defence, where there were irregular payments for entertainment. Entertainment payments are perfectly all right as long as they are anticipated and properly authorised. At the Department of Employment, there was

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overpayment for training providers and trainees and payment was made before the evidence was received. At the Welsh Office, there was uncertified expenditure on motorways and road maintenance. I am not saying that there was fraud or corruption in all those cases. The trouble is that, once one loses regularity of procedures, one is open to those problems. It is important that the standards that we have been able to maintain are continued. That matter will concern us rather more next year than it has done this year. The first report among the several with which I shall deal in some detail is the 36th report of 1989-90 on the "Restructuring and Finances of Universities". The Universities Funding Council replaced the University Grants Committee in 1989. I was present in the 1960s when the accounts of the University Grants Committee were first made available to the Public Accounts Committee. I well remember Lord James of Rusholme, who was then the vice-chancellor of York university, telling the Public Accounts Committee how much he welcomed the fact that the accounts of the UGC were coming before the Public Accounts Committee because they had a good story to tell. That is important. We had a number of allies who felt that the Public Accounts Committee would study those matters with great respect because we, like most people in the country, valued the independence of the universities. When we consider the universities, the Committee is very conscious of the need to maintain that independence. Each summer, the Universities Funding Council, as presently constituted, studies the forecasts of the financial outturn in the previous year of each university and studies the forecasts for the next four years. Since the early 1980s, the Committee has expressed its concern about the dangers of financial mismanagement in certain universities. One of the most important pieces of mismanagement occurred at University college, Cardiff, which was brought to the verge of insolvency, and we produced a report on that.

In our report on the restructuring of the finances of the universities, we pointed out that, of the 50 universities outside London, 28 were forecasting deficits for the year ending 31 July 1990. We have also pointed out that the financial forecasts for the university of London as a whole are giving rise to serious anxiety. Sixteen out of the 24 colleges and medical schools were in deficit. As of 31 July 1990, 16 colleges were forecasting that they would face cumulative deficits. The council told us that, because it had neither the powers nor the staff to do so, it had not checked the forecasts that the university had submitted. So the body responsible for funding the universities was not carrying out the sort of scrutiny of university forecasts that it needed to. This sort of reliable information is nevertheless the key to the council's taking effective action. It needs to strengthen its checking, analysis and follow-up of university financial forecasts.

Of course, we recognise the need to respect the autonomy of universities, but the funding council must ensure that it has the information to identify potential problems and to take prompt action. We risk damaging the key national asset represented by our universities if this is not done and if satisfactory monitoring arrangements are not agreed.

We understand that the financial forecasts for the university of London show that mounting deficits could reach £46 million by July 1993. The UFC is the body that looks after these matters--it is not for us to examine each

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university. Indeed, we would not want to do so--the UFC was created for that very purpose. It should not impose its will on every aspect of the running of the universities, but it should know whether a university is viable and can arrange its financial affairs properly and, if it is not so satisfied, it should be in a position to advise, warn and, if it comes to it, to take further action.

The ninth report of Session 1990-91 deals with the sale of the National Bus Company, which was created in 1968 and which achieved 50 per cent. of local bus mileage throughout England and Wales. It was privatised under the Transport Act 1985, the main objective of which was to promote sustained and fair competition and to maintain a competitive environment.

Paragraph 15 of the report points out that as

"competition in the industry was the Government's main objective, we would have expected the Department to have taken more positive steps to see whether, in practice, competition was achieved." Of 62 sales, 18 were negotiated with single bidders. Price Waterhouse advised us that a realistic benchmark value on each of the subsidiary companies should have been established, but that advice was not followed. It is fairly obvious that assets to be sold should be valued before customers are looked for. Whatever one sells, one wants to start with an idea of its worth and then try to find a taker for it at that price--or perhaps a little more.

Price Waterhouse is a respected and well-known firm of accountants, yet its most obvious piece of advice was ignored. The report mentions our surprise that the Government approved sales without putting a value on the sale items. As a result, Midland Red (West) Ltd. recouped more than half the purchase price in the first year. We certainly advocate clawback provision because in some areas one cannot be sure of the right price. That applies especially to land for which planning permission might subsequently be granted. It is right to allow for clawback so that the taxpayer can participate in a unexpected gift.

However, clawback applied to only 18 of the 1,500 properties and we should have liked to see it apply to many more. Before the properties were sold more should have been done to identify those with an alternative use so that a realistic valuation could have been decided or clawback allowed for. We said that since only 18 of the 1,500 properties were subject to clawback, the taxpayer's interest was not fully protected.

For example, the company advised us that most of the properties in Cumbria had no significant alternative use value, but some of the bus stations that were sold were worth much more than valuation. All Departments must be aware of the real value of what they are selling and the House should instruct Departments to get a realistic valuation of everything that they sell. In certain cases the valuation may not be precise, but it is better to have that than to have no indication at all.

Mr. D. N. Campbell-Savours (Workington) : My right hon. Friend mentions Cumbria and covers an example in my constituency where a bus station was sold for about £70,000. By the end of a series of transactions and within a matter of months the bus station secured a value of £1 million for property development. Does my right hon. Friend agree that in that case the taxpayer lost a substantial amount?

Mr. Sheldon : Such matters greatly concerned us and the methods that were used must never be used again.

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The 11th report is entitled "The 1989 Statement on Major Defence Projects". I should like to deal with some general points arising from our examination over the years of the Department. We were sorry to see Sir Peter Levene leave the job. He came to it with a great reputation and we were not sure whether it would be justified, but events proved that it was. We look forward to Dr. Mackintosh taking over and carrying on some of the valuable work that Sir Peter initiated.

The report deals with the price labelling of spares. We knew of the experience in the United States where certain articles were sold to the Department of Defence at outrageously inflated prices. I said that I could never be sure whether we were doing the same thing here and that, for example, several hundred pounds could be paid for an ashtray because nobody other than the people who had placed the order knew its original cost.

On Sir Peter's initiative, articles going into store have labels affixed showing the price that was paid. We were pleased about that because one of the best ways to counter a false price is for everybody to know the amount that was paid for an article. As a result of labelling there have been some price challenges. We welcome that.

Sir Peter also introduced a greater element of competition. There cannot be much competition for the production of a Trident submarine, but competition can be introduced among sub-contractors. Sir Peter found some ways of making sure that more sub-contracting could be subjected to competition. He then introduced a system to help competitors to get started. It is hard for people to decide that they would like to compete because they feel that contracts are sewn up among the existing contractors. However, he persuaded such people that if they moved into certain sectors, he would give them every facility. This has been useful. As a result of all this, we have seen not only more competition but more areas of activity subject to competition, and we welcome that as well.

One of the practices that Sir Peter brought with him from private industry was the use of cash flow. It is surprising to those of us who have a background of industry and commerce that in many sectors Government Departments do not understand the value of the use of cash flow as an incentive to contractors to carry out their obligation. That gives enormous power. The Government know that they will get the money, but industry does not know that and if the system is used and contractors are disciplined when things go wrong--it is not done in an underhand way because it is set out in the contract--one gets greater co-operation and better adherence to the contracts.

Sir Peter also prevented gold plating. This is where extra refinements are added on a particular project--perhaps a tank. If one wants the very latest in technology, one tends to add it to a project and it can go on indefinitely with the result that one never has the tank. There will always be a new development that will improve it. Therefore, there must be a deadline. The Department must be able to say, "That is enough. We want that weapons system even though it may not be perfect." There can always be a mark 2 later on. The Committee approved the introduction of such a cut-off date.

All those developments and changes led us to praise Sir Peter highly when he finally left our investigation room. We look forward to his successor, Dr. Mackintosh, carrying on in the same way.

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The 18th report is entitled "A New Building for the British Library". The British library is a much-loved institution. It is one of the grand features of our capital and, as we know, receives a copy of every United Kingdom publication. It is too small, so it was decided to resite it in St. Pancras, in a much larger building that would take many more books. It was agreed that it would be one of the largest civil projects undertaken in the past 100 years, so obviously it was a project of great importance to us. There would be space to carry all the books published until the year 2030.

Twenty years after the site at St. Pancras was purchased and 14 years after construction was started, the project is not finished. That is appalling. A year or two ago I was in New York and I went to the Empire State building because I wanted to check something that had been at the back of my mind ever since my boyhood. I found that I was right, although I thought that I could not be. The Empire State building, the world's most famous observatory, was started on 17 March 1930 and completed on 1 March 1931. In other words, it was finished in less than 12 months. One cannot carry comparisons too far, but to build the largest structure in the world in less than a year and then to spend 20 years building a library shows that there is something wrong. We know of the involvement of the Property Services Agency in that project.

The new British library will be much smaller than was envisaged. In the 1970s, the aim was to bring together into one building all the London-based collections, services and staff. There were to be three phases--1a, 1b and 1c. Presumably, there were to be stages 2, 3 and 4 later--I do not know. The project had involved 200,000 sq m, with many more reader seats and storage provision to the year 2030. There is now a smaller scheme for the second and third parts of the project which will amount to not much more than half of that which was originally envisaged. The project will now amount to 108,000 sq m. Only seven to eight acres of an envisaged 12.5 acres will be required. If there is need to expand in future, outlying sites will have to be sought. The storage of books was planned to extend to the year 2030, but the building will now be full by 1996, the year in which the library will enter occupation.

There were to be 3,040 reader seats and now there will be only 1, 176. All the work that I have described will have been carried out to increase the number of seats by only 7 per cent. That would be bad enough, but then we asked whether it was thought that the initial phase was the only one that would be built. "If that had been known," we said, " would there still have been a 260-seat auditorium, a very large restaurant and an enormous entrance hall?" Would those facilities have been made available for a reduced project? The Office of Arts and Libraries said that the building might have been constructed with a smaller auditorium. That is extremely important. The work was undertaken in several phases. There is something to be said for phased construction so that it is possible to take advantage of changes as work progresses. Each phase, however, should relate to the final outcome. Therefore, the construction of a large auditorium and a large entrance hall at the expense of the storage of books and the provision of reader seats should not have been undertaken. If the project is to be short of essential amenities, those involved should have thought in terms of

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a smaller auditorium and entrance hall. If the phases had taken into account the total result, there would have been the option to discontinue some parts of the various phases. Each block of work should have offered a balance of facilities.

The Office of Arts and Libraries said that there was a division of responsibility which was blurred and difficult to define and we found the most serious deficiency to be the division of responsibilities. We knew from our defence contracting investigations that it is enormously important to give someone prime directorship. There must be responsibility attaching to one particular area of activity. Despite the division of responsibility being blurred and difficult to define, we were able to establish that the Office of Arts and Libraries was responsible for funding and that the Property Services Agency was responsible for information on cost funding for the future.

When it came to information on progress--what is happening and how changes can be made that are based on what is happening--there was an interdepartmental steering committee, which was supposed to meet. In fact, a more junior committee sometimes met. It was the duty of the interdepartmental steering committee to provide information on progress, but at a crucial period the steering committee did not meet for over three years. That is almost unbelievable. We heard that the information

"was not as comprehensive and as detailed as would be provided in a commercial operation."

I should say not. As I have said, the steering committee did not meet for over three years, and costs were increasing.

In our conclusions in paragraph 13, we state :

"In a major and complex project spanning 15 years and costing about £450 million, it is regrettable that four years elapsed before serious management weaknesses were identified and remedial action taken. We are disturbed that the Office of Arts and Libraries, despite having commissioned and paid for the building, did not regard themselves as responsible for keeping control of the project. In our view they should have insisted on being provided with the information needed for this purpose."

That information might have steered the Office in a more sensible direction.

Mr. Nigel Spearing (Newham, South) : We are naturally disturbed by what my right hon. Friend has told us. Before he moves on to the next report, I hope that he will identify the lead Department and the lead Minister. Under what vote and under the surveillance of which Select Committee were the relevant funds allocated ?

Mr. Sheldon : The Office of Arts and Libraries was responsible for funding and the PSA had responsibility to provide cost funding as things went along. The Committee says in its conclusions : "We consider that the failure of the project Steering Committee to meet for three and a half years to have been indefensible." Those who are familiar with the restrained language that the Committee of Public Accounts uses will know that that is an extremely severe indictment. The paragraph continues :

"If it had continued to meet, and had been supplied with proper management information, some of the project's management weaknesses might have been detected and remedied much earlier."

I move on to the 19th report on new towns. There are three new towns : Milton Keynes, Telford and Warrington and Runcorn. The development corporations decided to privatise some of the work that they undertook. Between April 1987 and September 1989, the corporations

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encouraged about 800 of their professional and support staff to form private business ventures to undertake work for the corporations under contract. By September 1989, the ventures had undertaken work worth a total of about £37 million for the corporations.

Our concern was the oversight of the Department of the Environment of these arrangements. A target date was established for the winding up of the development programmes while reducing staff and contracting out services. There was, of course, a close relationship. Those involved had previously worked for the development corporations. It was arranged that they would go outside the corporations and set up their own ventures, but still have a relationship with the corporations. That should have created a red light for everyone concerned. It should have been realised that there could be cosy relationships, which obviously we must be careful about. We are dealing with public money, which needs to be protected rather more carefully than private money because of our responsibilities. When there is a change from one authority to another--for example, from the new towns to independent organisations--the Department of the Environment relies on general oversight and leaves operational matters to the corporations. These, however, were novel arrangements and there are questions of propriety in the conduct of public business. Consequently, there was a greater need to monitor what was going on and to decide how matters were being handled.

Independent ventures were set up by members of the staffs of the development corporations and because the corporations wanted to retain access to their expertise--I can understand that--there was no effective competitive tendering. There was no competition. Individuals set up their own organisations and retained links with their former employers.

Competition was present in all instances at Milton Keynes and there was competition in two of the six mergers in Telford. We asked why the privatisation proposals were not widely publicised, rather than being arrived at by what was described as discreet approaches. Discreet approaches may be sensible in certain cases, but not when awarding contracts. The Department explained that the corporations felt that publicity about the business ventures might have been misinterpreted by potential investors in the new towns, with an adverse effect on the development programmes. That is not sufficient reason for acting in that way.

We discovered that, despite the Department's having expressed severe reservations, Telford had privatised its post of director of finance. That is a dangerous business. It can be done, but it must be done extremely carefully. The Department's view was that the core management of a body dealing with business ventures should always be separate from, and not in any way directly involved with, those ventures. We said that we were concerned about the limited competition involved in setting up the business ventures, under which a substantial amount of contract work was virtually guaranteed to those involved. We expect all public sector bodies to observe the generally accepted principles of open competition when privatising such functions, to demonstrate the proper conduct of public business and to provide sensible means of establishing fair and reasonable prices for the work done.

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We regarded the reliance on discreet approaches to selected firms as unsatisfactory, and I am sure that the House will agree with that.

We noted the Department's serious reservations about the privatisation of the post of director of finance in Telford and we shared its commitment to the general principle that such a post should not become part of an independent venture. The rule against such privatisations should be firmly established. I am astonished that anyone could even think that such a post could be privatised without any consequences.

Under the restructuring of Telford and Warrington, redundancy payments were made of £6.6 million. Milton Keynes did not make redundancy payments and so saved £4 million. To provide redundancy payments as well as awarding contracts to those made redundant is not only gilding the lily, but slapping gold on it. Our conclusion was that, given the novelty of the arrangements adopted by the corporation and the sensitive issues involved, the Department relied too heavily on the corporation's handling of the business ventures and did not fully discharge its overall sponsorship responsibilities.

The 22nd report, Session 1990-91, deals with homelessness. Homelessness in England has grown considerably during recent years and one estimate suggests that 300,000 people are homeless. Increasingly, homeless families have been placed in temporary accommodation, including expensive bed-and- breakfast hotels, at a cost of about £150 million a year. The full extent of homelessness is difficult to establish. There have been a number of estimates, but one of the more reliable reports suggests that the figure for 1978 was 73,000 and for 1989 was 126,000. The use of temporary accommodation has also increased considerably.

It is reasonable to say that there are a number of empty dwellings in every area and to ask whether they could be used. We discovered that only 2.4 per cent. of local authority housing was empty at any one time, whereas the figure for Government housing was 18 per cent. The Government have 35,000 residential properties empty, so obviously something can be done about that. We must not make too much of it, but at least some of those properties could be made available. Homelessness causes great distress. It has not been a great problem in my constituency because until recently it had some rather poor properties that could be bought or rented at modest prices. However, those properties have largely disappeared and, for the first time, homeless people are being accommodated in bed-and-breakfast hotels. At a recent advice bureau I discovered that a family of five-- husband, wife and three children--who were housed in bed-and-breakfast accommodation had to leave their so-called hotel at 10 am and were not allowed to return until 6 pm. That is one of the horrors of the system. I am sure that London has got its act together rather better because it is more used to dealing with a problem that often causes immense misery.

Until 1988, local authorities could lease properties for up to 20 years outside the Department's capital control system. The rules were tightened and subsequently concessions have been for three or fewer years. Bed and breakfast is three times more expensive than leasing. It costs up to £15,000 a year to keep a family in bed and breakfast, which is three times the cost of keeping them in local authority or some other form of housing. The Department was asked to re-examine the matter so that

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property could be leased to house the difficult cases, with a two thirds saving over bed-and-breakfast accommodation. It cannot make sense to pay three times as much to house people in unsatisfactory and expensive accommodation when a better alternative is available. In its response, the Department reiterated its existing advice, but I wish that it had gone further than that in this sensitive and troubled area.

The 31st report, Session 1990-91, deals with the dock labour compensation scheme. The Dock Work Act 1989 abolished the registered dock labour scheme, which had restricted work in ports to registered dock workers and employers. The purposes of the Act were to remove the rigidities, help end restrictive practices and reduce excessive manpower. It provided for the Department of Transport to contribute towards the consequent cost of redundancy payments to dock workers under the scheme.

The Department originally estimated that the total cost of its contributions towards payments to former registered dock workers made redundant under the Act would amount to about £25 million. The total cost is now expected to be £141 million, almost six times the original estimate notified to Parliament--such costs must be notified to Parliament- -when the Bill was presented. The Department told the National Audit Office that the short time between publication of the Bill and its enactment gave it little time to carry out the sort of research that it now wished it had undertaken. We noted the Department's regret that the outturn of the compensation scheme was so far from the original estimate.

We were concerned that the Department had so seriously underestimated the size of redundancy payments and the introduction of compulsory redundancies. We felt that it should have carried out the necessary work to ensure the production of a rather better estimate than the one that it produced. We suggested that it might have thought of having a range of costs in those areas where there was some uncertainty. We did not accept the Department's argument that providing Parliament with a range of costs would have implied more precision than a single figure. I should have thought that it was the other way round. A single figure suggests a precision arrangement, does it not? We recognise that

"the costs of legislation cannot always be estimated", but a range would have suggested an uncertainty, which could have been drawn out during discussions subsequently.

Under the Act employers make compensation payments to redundant dock workers and the Department reimburses 50 per cent. of the cost. We considered whether some directors of liquidated companies which had previously employed registered dock workers had set up new businesses, employing many of the same workers--a venous arrangement. The report states :

"The Department were unable to say how far this might have happened ; they had not carried out such checks because unless there was a transfer of business it did not affect the legal question of whether dockers had been made properly redundant under the Act."

We are concerned about that. If one can get money from the Department by carrying on with the same work and employing the same people, the purposes of the Act have been negated.

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