House of Commons Hansard Debates for 28 Oct 1992

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We shall seek promises from the Government tonight on the implementation of paragraph 161 of Command Paper 2074, which originated with the report on the departure of the chief executive of the Development Board for Rural Wales.

As the spread of new bodies which can spend taxpayers' money in ways which make it difficult for people to scrutinise continues, one could say that there is a competition between the whistle blower, the Member of Parliament, the office shredder and the desire to hide behind new technologies such as paper that cannot be photocopied and the numbered issue of photocopiers. Those are the techniques that people in public bodies, as in private industry, use to stop information being made available to the public and to prevent Members of Parliament and the Public Accounts Committee, through the National Audit Office, from obtaining the information that we need to check mis-spending.

In future, we may see an evolution. It has already occurred within the national health service, where a huge row is going on about whether whistle blowers should be able to give examples of patient care being adversely affected. The Government have sought to enshrine the right of the whistle blower to bring information to hon. Members or the chief executive of the NHS if nurses are worried about the erosion of patient care.

Members of Parliament must safeguard the position by saying that, if the Government are trying to put all that information in the shredder so that nobody can find out about it, we want copies of it before it goes in the shredder. Perhaps the National Audit Office should evolve in that direction so that, if people within an organisation think that money is being mis- spent, hon. Members should invite them to write to us or, if they do not know who their Member of Parliament is, to the Comptroller and Auditor General. If they do not know how to do that, they should put the information in a brown envelope, drop it off in the district office of the NAO in Newcastle, Cardiff or wherever, and let the NAO deal with it. That information must be allowed out before the shredder destroys it within the organisation. I believe that we shall see a gradual evolution in that direction. I am sure that it will happen on a colossal scale in the health service as more trusts are formed. We need access to that information before it is destroyed.

Pages 25 and 26 of the 5th report, "Creating and Safeguarding Jobs in Wales", contains a mini-example of what happens when whistleblowing occurs. I am not a member of the Public Accounts Committee, but I am involved in the saga. During the Christmas recess last year, a whistleblower approached me with information to the effect that the chairman of the Welsh Development Agency had profited from a grant from the agency. One never knows when one receives whistleblowing information by telephone whether to believe it and one tries to find out whether one is being spun a line or whether the information is true.

I telephoned the House of Commons Library and asked the staff to find out who were the recipients of grants under the rural conversion grants scheme of the Welsh Development Agency three or four years ago, because the whistleblower had not given that information. The Library asked the WDA to provide it with a list, which is referred to on page 26 of the 5th report under point 23 of the schedule of questions put by my right hon. Friend the

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Member for Swansea, West (Mr. Williams) on 19 February to the WDA, to which the agency replied subsequently. It says :

"The request from the House of Commons Library"--

my request--

"mentioned in item 14 above was discussed in a telephone conversation between the Chief Executive and Mr. Derek Jones--Head of Industry Policy Division, Welsh Office on 31 December 1991." That was about a day after I had made the request to the Library, having nothing better to do in the recess between Christmas and the new year.

Bells were now ringing within the WDA, whose worried staff thought that they had better tell the Welsh Office in case there was a problem. The report goes on to say that Mr. Jones from the industry policy division of the Welsh Office, wrote to the chief executive of the WDA on 2 January 1992 asking for information on the grant. It says :

"The Chief Executive replied to Mr. Derek Jones in a letter dated 9 January 1992 confirming the date of the original application"-- of the conversion grant--

"date of provisional approval, amount of grant, date of payment and the purpose of the grant".

That is referred to as being provided in annex 7, although, for various reasons of confidentiality, annex 7 is not in the report. One of the questions asked by my right hon. Friend the Member for Swansea, West was :

"On what date was there an indication to Dr. Jones that a refund might be required?"

Interestingly, the report then says :

"Dr. Jones raised the issue of change of use and clawback with the Chief Executive in November 1991."

That was a month before I made my request for information through the Library.

"He wrote to the Chief Executive on 25 November 1991 confirming the proposed change of use of the second floor of the property to residential and requesting details of repayments that might be due to the Agency".

Again, we have not seen that letter. It is contained in annex 5, which is not attached to the report.

I now have to try to work out what was going on in the agency at that time. Is it believable that, by a strange coincidence, one month earlier than the Library asked for the information, Dr. Jones had volunteered to repay the grant? Alternatively, was it decided to backdate the request, knowing how dreadful it would be to have to admit that it was only because the whistleblower had come to me, I had gone to the Library, the Library had gone to the WDA, and the WDA had felt obliged to say that the information showed that Dr. Jones had obtained a grant from the agency while he was chairman and that therefore it had better make it look better by predating a letter saying that in November--one month before I made my request--he had initiated the procedure to repay the grant?

I could be wrong and, obviously, whether I made a fair presumption or whether there was another explanation will emerge eventually. It is extremely odd--indeed, it beggars belief--that when, on 9 January 1992, the chief executive, Mr. Phillip Head, replied to Derek Jones, the head of the industry policy division, confirming the date of the original application by Dr. Jones, the date of the original approval, the amount of grant, the date of payment and the purpose of the grant, it did not refer to the fact that, on 25 November--six weeks before--Dr. Jones had already initiated the procedure for repaying part of the grant.

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Surely a competent chief executive of the WDA would have pointed that out and not just stated the amount, date and purpose of the grant. He would also have mentioned the fact that the procedure for repaying the grant had already been started. It is difficult to put those two items together without seeing an element of falsifying the November date. I could be wrong because there might be other explanations, but the letter from Mr. Head to Derek Jones is baffling. That he should omit to say that Dr. Jones had, one month previously, initiated the procedure for repaying the rural conversion grant to which he was no longer entitled is odd.

I use that simply as an example of the race between Members of Parliament doing their job in terms of seeing that there is no mis-spending, the regularity and proprietary standards which taxpayers have every right to expect from us, and how the Government continually try to privatise the responsibility for spending taxpayers' money, to erode the Government's responsibility and that of parliamentarians, the PAC and the Comptroller and Auditor General to get at the information that they need to keep up standards of regularity and propriety in the spending of public money which we all have a right to expect.

8.49 pm

Mr. Mike Hall (Warrington, South) : I apologise to the House for not being present at the start of the debate--I had urgent business in my constituency. I am sorry that I missed the opening speech of my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), who was my Member of Parliament. I was born and bred in Ashton-under-Lyne, my family still live there and I have great ties with my right hon. Friend's constituency.

I wish to add my thanks to the National Audit Office and the Comptroller and Auditor General for the excellent report that they provided to the Public Accounts Committee. I have been involved in local government for 13 years and have been impressed with the reports that I received from my local authority. However, the reports received by the Public Accounts Committee are absolutely superb, and its staff and those who contribute to the compilation of the reports deserve the thanks of the House. They make my job as a new member of the Committee that much easier.

When I first became a Member, I made a vow to do the same as I had done in local government and to try to find out how the finances of central Government worked. I tried to do that 13 years ago with my local authority and I had great difficulty in keeping up with events. First, there was the revenue support grant, then there was the block grant, then grant-related expenditure assessment and then standard spending assessment.

I hope that my service on the Public Accounts Committee will help me to understand how the Government work and are financed. Since being appointed to the Committee on 9 June, the experience that I have gained has been valuable and has shown me the practical ways in which the Government work. It has also shown me how the Committee oversees Government expenditure to discover whether value for money is obtained and whether the money is spent correctly.

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We are discussing a number of reports today. I shall refer to four or five of them, draw a thread through them all and reach a conclusion. The 19th annual report deals with the sale of the skills training agencies. That report highlighted the fact that in 1984 the book value of those training agencies was £100 million. When one reads the report, it is difficult to discover the sum for which the training agencies were sold. When the Financial Secretary responds to the debate, will he say how much the Government have received so far from the sale of those agencies? Because of the work of the Public Accounts Committee, a clawback clause was introduced in relation to the sales. Will the Financial Secretary say how much clawback money has accrued to the Treasury in the one year that the system has been in operation?

The House deserves an answer to another question relating to the report. A Treasury minute refers to the fact that not all the bidders for the agencies were given the full details. The Treasury states that that deficiency has been corrected, but why was that practice allowed at the time of the sales of those agencies?

The conclusion of the 20th annual report--1990-91--on financial control of employment training and youth training programmes was unacceptable. I find it alarming that, when the report was considered, the Public Accounts Committee was told that 70 per cent. of the training and enterprise councils examined had effective financial controls. One must conclude that 30 per cent. did not have effective internal financial controls. Why was that defective system allowed to continue for so long and what has been done since to remedy that problem?

One of the problems identified in the report was that the attendance records of those on the schemes were not maintained properly and were inadequately related to the appropriate Departments. As a result, incorrect payments wer made to a number of organisations. I read with astonishment that one of the reasons the Department of Employment gave for those problems was that the country was in a recession. I was amazed that the word "recession" was used in a Government publication, as we had been told that the recession was nearly over and we were merely waiting for the election of a Conservative Government on 9 April to end it.

We are still in the depths of the recession--there seems to be no end to it. What measures have been taken to remove such features from the training and enterprise councils so that they can account for the number of people placed on training courses?

Another aspect of the report requires detailed scrutiny by the Treasury. The overpayments that have been made need to be recovered. The report states that recovery procedures are under way, but the Treasury minute states that the training and enterprise councils are resisting recovery of overpayment. Will the Financial Secretary to the Treasury say whether that dilemma is being resolved by the Treasury, and how much has been recovered so far?

I have a constituency interest in the 22nd report on the Property Services Agency accounts for 1990-91. My constituency contains both Burtonwood air base and a large PSA complex situated on the other side of Burtonwood road.

I read the report with interest, because I was told that Bovis had been brought in to smarten up the management arrangements for the PSA. That struck me as strange, as I have just bought a house built by Bovis in the vicinity of

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Burtonwood air base. I am sure that there is no connection between that and the role played by Bovis in trying to improve arrangements within the agency.

The report identifies the fact that the PSA was poorly prepared for privatisation--that is an understatement. The report shows that the PSA took a shambolic approach to accounting. The report said that impropriety could flourish and would be difficult to detect. The Treasury has dismissed that claim and has stated that there was no impropriety. Why is it so certain that that is true? That is a strong statement to make and should be backed up with a thorough analysis of the accounting system of the PSA.

The report also showed that the outstanding debt in 1990-91 was £56.6 million. Precisely how much of the outstanding debt has been recovered? The report also stated that the debt owed by United States' forces to the Property Services Agency had increased beyond the agency's limit. How much of that debt remains unpaid and how much has passed on to the Ministry of Defence as part of the book-keeping exercise?

I am concerned that the report into the PSA has revealed incompetency and poor management--probably as a way to depress the price of that valuable Government asset prior to privatisation. There may be a repetition of the follies that other privatisations have brought in terms of value for money for the taxpayer.

The 23rd report deals with the Department of the Environment and financial management control in the National Rivers Authority. The issue has been raised by my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis) and other hon. Members. My hon. Friend said that the contract for the relocation of the headquarters in Bristol cost £2.65 million, of which £1 million of taxpayers' money was wasted.

I come from a local government background. Had a local authority been that incompetent in managing one of its contracts, it would not have been given a £125,000 golden handshake but would have been taken to the local ombudsman and no doubt to the courts, and been surcharged for the waste of money. What has happened in the NRA is an absolute disgrace. The NRA took no notice of the guidance issued to it on competitive tendering. Any tender worth more than £2 million should have been the subject of competitive tendering. On this occasion, it was not. I want to know whether the promised revised financial memorandum has been rewritten and issued to Government quangos so that there will be no repeat of the horror stories that we have heard this evening.

Another illuminating point from the report is that, but for the work of the Comptroller and the Auditor General, this waste of public money would not have been brought to light. That raises questions about open government and about the validity of the citizens charter. It also means that the House must have powers to investigate non-governmental organisations so that we can be assured that quangos are subject to some semblance of democratic control by the House. All these reports were considered by the PAC before I became a member of it. I am impressed by their detail, just as I have been impressed by the reports that the Committee has considered since I joined it. I now look forward to the PAC looking into the sale of PowerGen and National Power to determine whether it brought value for money to the British taxpayer. Fiddlers Ferry power station, owned by PowerGen, is in my constituency. Its decision to import 4 million tonnes of low sulphur coal through the docks at

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Liverpool has meant that Parkside colliery in the constituency of my hon. Friend the Member for St. Helens, North (Mr. Evans) has been closed. That will mean an increased trade deficit and more environmental pollution, and 800 more people will be out of work, at great cost to the Exchequer and the local taxpayer. I look forward to the investigation.

9 pm

Mr. Nicholas Brown (Newcastle upon Tyne, East) : I should like to begin by holding an immediate vote of confidence in the Government on a show of hands, but unfortunately the rules of the House prevent that : not a single Conservative Back Bencher being present. So instead I had better discuss the reports of the Public Accounts Committee.

The guillotined Third Reading debate on the Cardiff Bay Barrage Bill took place yesterday, but that has not deterred the Welsh group of Labour Members of Parliament from seizing every parliamentary opportunity to raise matters of importance to Wales, on which I congratulate them. I also congratulate my hon. Friends the Members for Glasgow, Rutherglen (Mr. McAvoy), for Glasgow, Cathcart (Mr. Maxton) and for Glasgow, Shettleston (Mr. Marshall) on managing to discuss matters pertaining to the Scottish economy, the Scottish environment and Scottish housing.

I echo the tribute paid by my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis) to my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), the Chairman of the PAC. Every hon. Member who has spoken has paid similar tributes to the Chairman. I am well aware that his chairmanship is not only widely respected in all parts of the House but lends enormous authority to these reports. As the Chairman has rightly pointed out, there are certain key themes and Departments that step forward into the limelight every year as a result of the Committee's work. Issues such as out-and-out fraud have been brought to the House's attention again today, just as they have been in previous years. Likewise, further losses to the Exchequer through the undervaluation of assets sold in the Government's privatisation programme are a recurring theme, in spite of the assurances we were given in previous years by previous Financial Secretaries in response to previous criticism by the Public Accounts Committee.

There is absolutely nothing new in the discovery of the failure properly to invest in highway construction. That costs the taxpayer much more in the medium term because of maintenance and repair costs. That point is underscored again by today's debate. Yet there is no evidence that the Government intend to stop taking a short-term view of these matters. Indeed, if they ever do take infrastructure and capital investment more seriously, that will only be because it is one of the few economic policies that they have not yet tried. These reports highlight the affairs of the Ministry of Defence and of the Northern Ireland Office. Before dealing with those two recurring themes, however, I should like to refer to two reports that clearly require comment. The first of them is an astonishing report-- the 36th, dealing with the qualification of accounts for the Foreign and Commonwealth Office. It has attracted a full and thorough response from the Treasury. That is not in the least

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surprising. The Treasury official who compiled the minute responding to the report must have had mixed views about the whole sorry episode.

The PAC report refers to inadequate controls which

"create a climate which is conducive to fraud and theft the Department's problems may have heightened the risk of irregularities remaining undetected."

The Treasury boldly responds thus, in minute 13 :

"The Government has noted the Committee's comment".

The PAC further comments :

"We are alarmed at the catalogue of accounting errors made by the Department. We cannot do other than strongly criticise the Department's accounting arrangements".

Those are tough words and, to emphasise the point, the Committee says :

"We wish to underline the seriousness with which we view the Department's failings."

There is further criticism of the failure properly to control suspension accounts, of which 535 have been identified. The report is one of the most remarkable to be presented to the House and, as the Chairman of the Committee said in opening the debate, it is wholly exceptional.

The report reveals that the theory of Government Departments being publicly accountable for money voted to them by Parliament has been completely breached. That is an extraordinary serious matter. The report suggests a mess of incompetence and error. Nobody suggests that the mess was engineered deliberately, but all sorts of unworthy thoughts will be harboured if the matter is not put right so thoroughly and comprehensively that in future the Department will be completely beyond criticism.

I was not reassured to hear that senior civil servants from the Foreign and Commonwealth Office approach the Committee with a relaxed attitude to these matters. The Opposition do not adopt a relaxed approach to them and the issue should not be allowed to drift. In future debates, we shall seek assurances from the Executive that the matter has been brought to a conclusion that is satisfactory to the Public Accounts Committee.

On a much smaller scale, although one has the impression that it was not for the want of trying, is the subject of the 11th report which deals with the retirement of the former chief executive of the Development Board for Rural Wales. The retirement settlement was generous, but its original terms were exceeded and the qualification of the accounts for the DBRW led the Committee initially to discover that the lucky retiring chief executive had been given a payment of about £15,000 as compensation for untaken leave, and that the payment had not been authorised by the Welsh Office or the Treasury. It later transpired that there were no reliable records from which to quantify the untaken leave even if a payment had been agreed.

The PAC later discovered that the capital cost of pension enhancements for this gentleman had been £180,000 ; that the eventual retirement package included a consultancy assignment of up to 150 days at £200 a day ; and that the precise scope of the work to be undertaken had never been defined. That is an elastic meaning of the word "retirement". Some of my constituents would be willing to undertake the work at a cheaper rate. Given the Government's belief in competition, perhaps such consultants should be put out to tender. One wonders how many similar stories, perhaps not quite as gross, are to be

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found in other non-departmental bodies. I hope that this case is exceptional, but I harbour the suspicion that it is not.

I agree with my hon. Friend the Member for Cardiff, West (Mr. Morgan) who stressed the need for real powers for the auditing authorities when dealing with undemocratic and unaccountable bodies such as the wretched development corporation in Tyne and Wear and the one that I have mentioned in Wales, because they behave as if public money was a piece of property of which they alone had charge. The report gives rise to legitimate questions. Who appointed the chairman, Mr. Glyn Davies, and what responsibility for this series of events is taken by the person who appointed the chairman? How was the chairman chosen, and what are his qualities? What happens to Mr. Glyn Davies and his board when they do something like this? My hon. Friend the Member for Alyn and Deeside (Mr. Jones) is right to say that these events are a great sorrow. They cannot be left unaddressed. Seven of the reports deal with the Ministry of Defence. Hon. Members who have participated in these debates in the past will know that the Ministry's affairs are a recurring theme--I am tempted to say a recurring sorrow--in the Public Accounts Committee. The 37th report, about which the Chairman of the Committee spoke, deals with fraud and irregularities. That report builds on the earlier work of the 20th report of the PAC, produced in 1987-88 and debated in the House in 1988. Worryingly, the Committee is still reporting to the House that it is concerned about the level of fraud and theft at the Ministry of Defence.

For example, some £500,000 worth of computer and office equipment was stolen in 1991 and the National Audit Office found weaknesses in each of the establishments that it visited and in the way in which establishment procedures were being applied. Despite everything that was said in 1987-88 and the reassurances of the then Financial Secretary, the House is still being told of poor supervision. Furthermore, the Committee feels that the Department has failed to ensure that lessons arising from fraud cases are properly and widely learned. That is probably as damning a report as the Committee can put in front of us.

Astonishingly, we are told that although it is the stated policy of the Ministry of Defence invariably to dismiss civilians guilty of fraud, the level of excepton to this policy is 55 per cent. How can it be an exception if over half the people found guilty of fraud are not fired? That is unacceptable to the Committee and to the Opposition. I do not know what special circumstances pertain in each and every one of these cases, but if it is supposed to be the stated policy of the Ministry of Defence invariably to dismiss civilians found guilty of fraud, 55 per cent. of such cases as exceptions is a little high and worthy of further inquiry.

I do not know what the Financial Secretary has to do to prompt such further inquiry, but I urge him to do it. In the seven years since 1984-85, the Ministry of Defence discovered 388 cases of fraud, resulting in a loss to the Exchequer of £3,338,000. That is quite a lot of money and many of us think that such resources could be better used elsewhere.

My hon. Friend the Member for Cathcart was right to express alarm, on behalf of Scotland, about the future of the water industry. He based his fears on the report about the privatisation of water in England and Wales. The

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shortcomings of the Government's privatisation programme are a continuing feature of these debates. In particular, the losses to the Exchequer occasioned by the underselling of assets, usually land, have been highlighted time and time again. My hon. Friend the Member for Warrington, South (Mr. Hall), in his excellent contribution, referred first to that point. Had he been here previously, he would have known that his fears, expressed as a new Member of Parliament, have been echoed in debates on just about every other report on privatisation.

In 1988, we discussed the privatisation of Rolls-Royce and the critical Public Accounts Committee report, which concluded : "Departments should ensure that tax payers' interests are protected as effectively as future shareholders' interests".

I strongly agree with that, yet we have had similar arguments over the privatisation of the royal ordnance factories, and now over the sale of the Rover Group and of the water authorities.

I strongly endorse the views expressed about the Rover Group by my hon. Friend the Member for Hodge Hill, which very much reflected my view of the matter. The key point, which emerges again and again, is that we must protect the public purse and the interest of the taxpayer when valuing the assets of public concerns that are being privatised. I also strongly support the points made by the Committee in its report on the Rover Group and I hope, as the Chairman has said, that its recommendations will become a check list for the future if the Government are to proceed with further privatisation measures. The Committee wisely says that it is the pressure of time, the working to fixed deadlines, that puts the privatiser at a disadvantage when negotiating with potential new owners. It is clear that the Government's ideological commitment to privatisation transcends responsibility to the public purse. It is indefensible that privatisation seems always to involve a loss to the Exchequer on land values. My right hon. Friend the Member for Swansea, West (Mr. Williams) referred to the report on the water industry and described the arrangements as statutory theft. He is right.

I move on, as I am sure the Financial Secretary is anticipating me to do-- everyone who has followed the debate knows that I will--to the report on the privatisation of Harland and Wolff. First, I shall refer to the privatisation itself and, secondly, to the scandalous set of circumstances that relate to the procurement and eventual debacle of AOR1. These matters are referred to in the PAC's seventh report.

We are told that the net cost to the taxpayer of the privatisation of Harland and Wolff was £625 million, including the writing off of interest-free loans of £422.5 million and the Government's shareholding, which we are told was worth £4.6 million for this valuable piece of property. The Committee states :

"We are disturbed that the close relationship between the Department"--

that is the Northern Ireland Office--

"and the company"--

meaning Harland and Wolff--

"and other monitoring provisions were insufficient to prevent serious weaknesses in financial management in the company." A number of us have been making the same point since the mid-1980s. It gives me little comfort to see confirmed what many of us suspected was the position.

The report continues :

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"We have not been satisfied that the extent of the Department's abatement of their adviser's valuation of the Harland and Wolff land and buildings was justified in the interests of the taxpayer." Again, we have the recurrent issue of property values and privatisation. It appears in the report from which I have quoted, as it does in every other PAC report that deals with privatisation. The report concludes :

"While it can only be a matter of judgment as to whether the objectives of the privatisation were achieved at the lowest cost to the taxpayer, the changes to the terms of the Heads of Agreement which were later negotiated were, in our view, costly. It is likely that Harland and Wolff's record of poor trading performance while in public ownership not only deterred potential buyers but also influenced adversely, from the taxpayer's point of view, the amount which it was necessary for the Government to offer to achieve the sale."

That is a condemnatory report.

The PAC reports also on the scandal surrounding AOR1. It states : "We are pleased that the Department secured a complete break from the ongoing financial risks associated with the AOR contract but concerned that the cost of achieving this was high".

Why should there be any financial risks associated with the AOR contract? The contract was supposed to involve private competition between Swan Hunter and Harland and Wolff, which would act as if it were a private company, even though we know that it was not. Its approach to the competition was supposed to be hands-off. It was meant to be acting under the same constraints that apply in the private sector.

I declare immediately a constituency interest. The whole of Tyneside would be astonished if I did not. During the period of which I am talking, about 4,800 shipyard workers lost their jobs on Tyneside. About 2,000 were in that position as a direct result of what happened over AOR1, or HMS De Lorean as it is now known, but that is going back to the past. Ultimately, the Government placed the contract with Harland and Wolff. Before that happened, I wrote to the Prime Minister to express my fears. I stated :

"there is widespread fear on Tyneside that like is not being compared with like, and that Harland and Wolff enjoy an unfair advantage because of the substantial state subsidy that it receives."

I went on :

"If the type 23 frigates are to be able to play their full part in Britain's defence, it is vital that the first AOR arrives securely and on time."

Hon. Members will not be surprised to learn that I received an assurance from the then Prime Minister. On 24 April 1986 she wrote to me :

"an undertaking was given to the Swan Hunter buy-out team before privatisation that the Harland and Wolff bid would be unsubsidised"-- unsubsidised--

"and comprehensively costed You may therefore rest assured that, in deciding to award the contract for AOR 01 to Harland and Wolff, the Secretary of State for Defence is satisfied that the terms of the undertaking have been met. I might add that he prefers the tender on grounds of design and delivery, as well as cost and contract terms".

Four points are made--that the AOR1 tender is unsubsidised ; that it has been comprehensively costed ; that the design is preferred ; that the delivery date is preferred. The design, as those who know the industry are well aware, has turned out to be one of the great disasters of the century. There is now a real chance that the Ministry of Defence will take delivery of AOR2, built on Tyneside by Swan Hunter, before AOR1 eventually limps into service. Why is the Public Accounts Committee so relieved

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that this unsubsidised and comprehensively costed contract has been escaped from, yet tells us that the cost of that escape route was so expensive?

The whole disgraceful episode is probably one of the worst piece, of procurement decision making that has ever come before the House. On such occasions, people ask whether anyone will be punished for what has happened. Yes, people are being punished for what has happened. On Tyneside, 2,000 shipyard workers have been thoroughly punished for what has happened, but they were not the guilty people who brought about this farce. They are just the people who have to pay the price.

The third report on the management of road maintenance caught my eye, not just because of the outrageous conclusion that the Public Accounts Committee has been forced to draw, but because I remember discussing all this way back in 1988, and I remember the assurances that the then Financial Secretary gave to the House.

I am sure that back in 1988 the then Financial Secretary did not tell the House that about one third of every single lane of motorway can be expected to be coned off at some time in the next five years. Nor do I recall his saying that the clearance of the backlog promised by the end of 1992-93 is now to be extended by a further five years to 1997-98. Those are points made by the Public Accounts Committee. The Public Accounts Committee says that it is concerned about the past inadequacies of the Department's data on road condition, a point made in 1988, and notes that the national structural survey of the condition of roads had to be abandoned because the data provided by its agents were incomplete and inconsistent.

The Public Accounts Committee says that for the past six years the Department has consistently underestimated the levels of maintenance required because its traffic forecasts have been too low, and that the revised target for clearing the backlog in 1997-98 is based on the assumption that roads past the critical condition are expected to last for as much as a further eight years before requiring reconstruction. Perhaps most damaging of all, the report says : "In view of the Department's evidence that reconstruction is much more expensive than overlay, we are concerned that the Department's planning and management of the maintenance programme has failed to prevent a significant proportion of the road network passing the critical condition which entails expensive reconstruction." All those points were made in the House in 1988 or, at least, similar points were made in 1988. Yet here we are again having another warning from the Public Accounts Committee, re-echoing everything that that the Government should have addressed some five years ago.

The hon. Member for Uxbridge (Mr. Shersby), in the context of accountants and civil servants answering the Public Accounts Committee, said that it was always the successor who had to account to the Committee for the misdeeds or failings of his predecessor. The hon. Gentleman made the attractive suggestion that former civil servants responsible for previous misdemeanours should be caled before the Committee--but pointed out that they may be retired, too far away, or otherwise unavailable. I wonder whether the same might apply to a former Financial Secretary who assured the House that so

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