House of Commons Hansard Debates for 25 Oct 1993

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have the inducement for caution and restraint when it comes to managing the internal affairs and carrying out the administration of the agency, but we do not want a consequence of the sad and sorry story that has been revealed to be an inducement of caution in regenerating industry.

Communities such as mine do not want a cautious, frightened agency ; they want an agency that plays a central, fundamental role. As I said earlier, I want to outline the key priority of the agency. It is my belief that, through the appointment of a new chief executive, we can send out a loud and clear message about what the agency's role should be. When it was established in the 1970s, its role--which I believe still holds today--was to develop the industrial, engineering and manufacturing base of communities such as the one that I represent. It was to generate jobs. There is great opportunity to do that.

People ask, "Where will the jobs come components and other manufacturing services. We need to get a greater percentage of indigenous, locally and regionally--or even United

Kingdom-produced--goods because that will create jobs. One of the central functions of the WDA is to do that. The appointments that are about to be made should reflect that central priority.

There is a unit within the WDA called "Source Wales". I have pleaded for there also to be a "Source Valleys" so that we can tap into the jobs already coming to south Wales through the large assembly plants. The Source Wales team and people like Mr. David Harris currently appear to be on the margins of the agency's activities ; if they are put at the heart of a revitalised agency, we can put behind us the sorry story that has been revealed in the PAC's report. We can then re-establish the spirit intended in 1975 and which has been carried forward by successive Governments--which is for an agency whose job is the regeneration of communities such as mine. 6.9 pm

Mr. Richard Page (Hertfordshire, South-West) : I begin my contribution to this debate as I have begun my contributions to every Public Accounts Committee sitting in which I have spoken by paying tribute to the Chairman, the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), who kindly guides us through our affairs and ensures that we speak with a united voice. If the Committee were divided, our reports and pronouncements would be much less effective. I also thank the National Audit Office for the thoroughness of its reports under the leadership of Sir John Bourn.

When I was appointed to the PAC about six or seven years ago, I remember reading a catalogue of horrors and thinking that Departments would surely realise their mistakes and learn from them and that the flow of disasters would gradually dry up. However, I then thought that the PAC had existed for more than 100 years and that the flow of disasters was unlikely to dry up merely because Richard Page had become a member. In the six or seven years that I have been a member of the PAC, the catalogue of disasters seems to have got worse, not better. I am confident that there will be a supply of raw material for the PAC for many years to come.

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As the Committee's Chairman said, two critical themes emerge in the report, both directly related to the introduction of market discipline and the decentralisation of the public sector. Both will threaten the continuation of the process or even reverse it if they are not dealt with properly. Of course, the two themes existed before decentralisation, but decentralisation now enables the public spotlight to be focused on them more clearly and the cover-ups to be exposed. I shall deal with cover-ups a little later.

First, we have witnessed a serious breakdown in the strategic management of publicly financed projects. Departments appear to have relinquished not only day-to-day management, as was intended, but the oversight of activities contracted to agencies under their remit. That has led to a considerable loss of taxpayers' money.

Secondly, the chain of accountability between taxpayers and the activities that they finance has been needlessly broken. Major and costly mistakes and abuses have been unearthed by the NAO, but the individuals and organisations responsible have invariably escaped scot-free or the individuals have resigned, in some cases with six-figure golden handshakes. Some of the most costly examples are to be found in the regional health authorities. I therefore trust that the Secretary of State for Health will bear that message in mind when undertaking the reform of those authorities, which she announced last week.

I have selected just four examples, each of which vividly highlights these issues and outlines an individual twist that may be of interest to the House. Members of the PAC will be surprised to learn that the Westminster and Chelsea hospital will not appear on my list ; the Chairman has already dealt with the errors that took place on that project, although I believe that he did so far too gently. The first example is what happens when one publicly financed body rips off another and, as usual, the taxpayer picks up the tab. We have already heard about some of the costs of police cell accommodation. If someone were to ask an average member of the public what the police force should charge the prison service per night for such accommodation, he might say that Surrey's figure of £89 was a bit expensive but probably about right.

Some of Surrey's senior police officials must have travelled to other counties to find what they were charging, because Surrey increased its charges from £89 a night, which was at the bottom of the table of charges. One might suppose that £120 was enough, or £140, or £160, or £180. I have to report that the average is £234 a night for a prisoner held in police cells which, as Arthur Daley would say, is a nice little earner. However, the price does not stop at £234 ; it goes up and up.

One can almost imagine the menu card being hung behind the door in some prison cells, requesting the prisoner to fill it in--would he care for French bread or croissants in the morning, jam or marmalade, Weetabix or porridge, haddock or kippers, egg and bacon or black pudding, coffee or tea? One can imagine a kindly Dixon of Dock Green type policemen knocking on the door at 8.30 am asking, "Would sir care for breakfast now?" In Hertfordshire such accommodation costs £561 a night, and that is the sort of service that I would expect for such a

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sum. It is an appalling waste of public money, although I know that the Home Office is placing specified limits on certain items such as prisoners' food, as the Chairman said.

Despite the variations in the figures and despite the annual bill of about £100 million, the police authorities made little effort to check the bills. Indeed, about half the 41 police authorities did not even bother to use the standard form to submit their claims for reimbursement.

The second example is illustrated by the case of Wessex regional health authority in its attempt to introduce computerisation. Before I am called to order, Mr. Deputy Speaker, may I say that I am well aware that the PAC has not approved the final report, so I shall not mention the £43 million that was spent on a computer system, which has now been abandoned, or the £3.15 million spent on giving a soft landing to the 104 ex- employees of the health authority who, in fact, turned out to number only 60. However, I shall mention what can be described only as a cover-up, when section 30 of the Local Government Act 1992 was used to hide the red faces of public officials. The Committee was originally to take evidence on 10 February, so it came as a surprise to read in Computer Weekly about a second secret report from the district auditor which was not drawn to our attention or made available. We made inquiries and found that the expose in Computer Weekly was correct. The Chairman rightly deferred the meeting. We took evidence on 5 May when we were able to see the whole report.

On seeing the report, it became abundantly clear that the health authority and the management executive should have and could have acted sooner to end the expensive saga. To cap it all, one of the managers involved was able to retire with a pay-off of more than £100,000. My worry is that a report was kept secret when there was no reason for its not being in the public domain. It was made confidential simply to hide officials' embarrassment at the way in which the case was handled.

The third example, which has already been mentioned, involves the Welsh Development Agency. The right hon. Member for Ashton-under-Lyne mentioned the necessity of the entrepreneurial spirit. Drive and efficiency are needed, but we must remember that the WDA deals with public money. The press has paid considerable attention to the fact that the WDA, for all its success in assisting the Welsh economy--I pay tribute to it for what it has achieved--has been less successful in its internal management.

The young and exuberant chairman, who was appointed in 1988 without references, has done much to stamp his personal identity on the agency, going far beyond the number plates on his fully fuelled, grace-and-favour Jaguar. The agency has been run not as an organisation funded by the taxpayer but as the personal business of its senior managers. Perks have been agreed, commercial deals have been made and staff have been hired and fired without regard to the standards of public sector accountability that we hold so dear. It is perhaps symptomatic that a convicted fraudster was appointed as the agency's director of marketing. He was no doubt helping to cast off its public sector image when he decided to interview girls from a local, unlicensed model agency at the Celtic Bay hotel, somehow incurring a £450 bill in the process.

The agency's reputation has spread far and wide. It has done a tremendous job for Wales but, sadly, our standards of public accountability and principle, which are the envy

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of the world, seem to have been abandoned. We need not only the flair of the entrepreneur but acceptance of the fact that public money and public office are involved.

The final example is of the failure to provide a product to original specification arose during the replacement of two auxiliary oilers by the Ministry of Defence. Given the sheer scale of the MOD budget, it is inevitable that it will regularly attract the Committee's attention. Management mistakes in the MOD can have costly long-term effects. The disappointing feature of the contract for the two oilers was that, although work on the second started a couple of years after the first, it succeeded in being commissioned a few weeks before the first.

The original specification provided that the oilers should have vertically launched Sea Wolf missiles to give protection against attack. During the Falklands conflict, we saw what happened when an auxiliary oiler was attacked. The stories and pictures of the Sir Galahad and the Sir Tristram will remain in our minds for ever. I learned then that a £100,000 missile can take out a £100 million ship just like that. It was a disgrace not to allow those oilers to have the Sea Wolf. It cost £300,000 to remove the parts of Sea Wolf that had already been fitted to the oilers when it was decided to abandon it.

The MOD has a habit of behaving in such a manner. I remember the saga of the advanced short-range air-to-air missile. The MOD delayed placing the order for years ; it prevaricated, changed and negotiated. It emerged that the purpose of the Tornado, to which the ASRAAM should have been fitted, was to prevent a possible Soviet bomber attack and that the Russian equivalent to our present missile was superior. We would have been knowingly sending our

Tornados--heaven forbid that it should have happened--into action against a superior weapon. The MOD delayed making a decision, not for weeks and months but for years.

It is clear from the Committee's report that decentralisation in public service must not lead to the abandonment of public sector standards. It can be achieved without stifling initiatives. We are seeing a progressive and positive improvement, but managers of executive agencies and decentralised services must continue to look for and receive clear central guidance. In addition, they must guarantee that the taxpayer will receive value for money and must ensure local and national accountability, enforced, as it would be in any enterprise, by firm disciplinary measures.

It has been far too easy to negotiate resignations using large sums of money rather than taking disciplinary action and accepting the publicity that it would attract. I hope that there will be more accountability and that there will be no repeat of a report being sumitted to us when a secret cover-up report is hidden in the background and not drawn to our attention.

6.25 pm

Mr. Robert Maclennan (Caithness and Sutherland) : The hon. Member for Hertfordshire, South-West (Mr. Page) and a number of Opposition Members have rightly focused on the challenges to the Public Accounts Committee that have stemmed from the establishment of executive agencies. We should be no less rigorous in our scrutiny of our own role as a Committee of the House than we expect Departments and other agencies to be in their presentations to us.

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I want to focus on one Department and one report about which the Public Accounts Committee has faced a baffling problem for many years. I refer to the Lord Chancellor's Department, whose representatives have appeared before our Committee a number of times and, candidly, have baffled us.

In the last Session, we were faced with an account of the Department's handling of legal aid that we found unsatisfactory. The Committee is not used to employing superlatives in our criticisms of Departments or public agencies ; we choose our words with care. That does not diminish the impact of what we are saying, but superlatives alone will do do describe the cavalier approach of the Lord Chancellor's Department to the findings of the Committee and of its predecessors.

It is a joy perhaps surpassed only by the pleasure of watching "Yes, Minister" to read the evidence of Sir Thomas Legg, twice delivered to the Public Accounts Committee in his explanations of the Department's failures to monitor the growth of legal aid and of the uncertainties that the Department had in projecting the consequences for our citizens that flowed from the changes that the Department had made.

His evidence was the most ingenuous to which I had listened in many years of membership of the Committee. We must ask ourselves, arising from that study, whether the Lord Chancellor's Department is capable of doing its job.

I have read the Treasury minute supplied in response to the Committee's 46th report. The minute purports to deal with some of our criticisms about the Department's forecasting and monitoring of legal aid expenditure. The 46th report is not the first occasion when the PAC has considered the matter. A report in the 1986-87 Session expressed astonishment at the lack of control.

In the report that we are considering today, we found that the position was no better than it had been then. The Lord Chancellor's Department appeared to have made no significant improvements. Indeed, we stated that it was

"unsatisfactory"--

and what a modest word that is--

"that, given the improvements promised six years ago, the Department's forecasting and monitoring are no better today than they were then. It is still not possible to identify more precisely the causes of the increases in legal aid expenditure over the years." Candidly, invincible ignorance from the Lord Chancellor's Department is no longer tolerable. It has taken no steps to make good the deficiencies, and the Treasury minute suggests that it has nothing in mind to deal with the problem.

Paragraph 100 of the Treasury minute states :

"The Lord Chancellor's Department has gained in experience and is now more confident of its forecasts than it was able to be in 1986." We discovered that, in 1991-92, the Department's estimate were £250 million more than the approved estimate of £698 million. That was an increase of 36 per cent. If the Department is prepared to rest on what it has done so far, that will not satisfy the Committee or the House.

The Department's invincible ignorance is outstripped only by its complacency. Even more horrific than the astonishing increase in expenditure--which the Lord Chancellor's Department has not explained--has been the Department's inability to explain or seek information

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about the direct and indirect effects of what the Government propose to do in respect of legal aid costs and the administration of justice.

I will never forget the evidence of Sir Thomas Legg in which he solemnly denied to the PAC that he had any recollection of a letter which his Department had received a few days before from the Lord Chief Justice and the Master of the Rolls in which the two top judges of the realm drew attention to their concerns that

self-representation by litigants would flow from the Government's proposed changes to legal aid and, as a consequence, the costs of the legal system would increase substantially. That fear of the two top judges of the realm did not come to the mind of the permanent secretary when he gave evidence about the assessments. He stretched the credulity of the Committee.

Mr. Terry Davis (Birmingham, Hodge Hill) : Does the hon. Gentleman accept that not only did it fail to come to the mind of Sir Thomas Legg, but it failed to come to the minds of a team of officials and advisers who were sitting behind him. It was the greatest act of collective amnesia that we have ever seen.

Mr. Maclennan : Yes, I remember that and I recall that the right hon. Member for Swansea, West (Mr. Williams) described it as collective amnesia. If I recall correctly, when the right hon. Gentleman suggested that to Sir Thomas Legg, he said that it was not so much collective amnesia as a collective wrong categorisation. It was bumbledom at its worst, although I have a strong suspicion that the answer on the second occasion was very carefully considered. What happened on that occasion is less important than what has happened since and what steps are to be taken by the Lord Chancellor's Department to deal with the Committee's criticisms after hearing Sir Thomas Legg twice. The Committee drew attention to the attitude of both branches of the legal profession about what was being done, and asked in its 46th report for the closest co-operation between the Lord Chancellor's Department and the two branches of the legal profession.

The Treasury minute is very unsatisfactory, to say the least, on that point. Paragraph 112 states :

"The Department is taking steps to implement the proposals put forward by the legal profession, though it continues to believe that in practice their effect on the overall cost of legal aid will be small."

The minute is thoroughly dismissive and shows that the Lord Chancellor's Department appears to have learnt nothing and to be determined to continue in its bad old ways.

The most disturbing aspect of the Department's response relates to the impact of the changes. The Committee found that the impact of those changes did not appear to have been fully researched or supported by thorough analysis of costs and benefits. The least that the Committee might have expected is that there should have been thorough analysis of the costs and benefits as a result of the proposed changes. However, not only has there been no such analysis : there will apparently be no analysis in future.

Paragraph 110 of the Treasury minute, in response to the recommendation that the emerging results of the changes in legal aid should be monitored, states :

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"On the assessments it has made the Department has no doubt that the overall effect of the eligibility measures will be to reduce significantly over the next three years the level of public expenditure that would have occurred in the absence of these measures."

That is a statement of the obvious if ever there was one. However, there is no sign of an intention to monitor. According to paragraph 111,

"The Department will monitor the effect of the changes"-- but it does not say how.

"It will continue to look for ways of improving efficiency and effectiveness in the use of legal aid, the operation of the courts and the delivery of legal services. The Government is committed to ensuring that legal aid is directed at those whose need is greatest."

There is not a single word in answer to the Committee's specific inquiries about the impact on individuals who might, as a result of the changes in the rules on legal aid, not be able to afford representation or to have their case heard in court.

That this matter is significant, although locked up in these arcane documents, is testified to by the speech made yesterday by Lord Woolf on the future of our legal system. When asked whether the system is failing us, Lord Woolf said, in effect, yes. He said that we must now contemplate bringing in a second-class system of civil law under which disputes can be heard, without legal representation, by judges. There is evidently no way in which we can provide effective legal representation under the present arrangements.

The Public Accounts Committee deals with what has passed and how the Departments of State have handled public expenditure. Under the new national audit legislation, we look at the efficiency and effectiveness with which that public money is made available. We have repeatedly drawn attention to the shortcomings of one of the greatest Departments of State headed by the second most senior Cabinet Minister--second only to the Prime Minister--the Lord Chancellor himself, who has brought the system--I do not speak of him personally because it is not entirely the personal responsibility of the Lord Chancellor ; the problem has obtained for many years--to such a pass that we now have to talk about second-class legal solutions, and Lords of Appeal and others are having to canvass such ideas. There is a political remedy which runs far beyond the remit of the Public Accounts Committee to consider, but the time has long since passed when it was satisfactory for such matters to be presided over by a Minister who is permanently in the upper House, who presides over the debates of the upper House, who sits as a judge in the top court of the land and who serves many other archaic functions which, candidly, are not appropriate to a Minister of Justice. The time has come to have a Minister of Justice in this House who is prepared to take conrtrol of the totally inadequate administration of a Department which we have had cause to criticise on so many occasions.

6.41 pm

Mr. Michael Shersby (Uxbridge) : I am pleased to follow the hon. Member for Caithness and Sutherland (Mr. Maclennan). He has made some important points about a matter which has caused the Public Accounts Committee the greatest possible concern.

One of the things that I dislike about public life today is the phrase that we read in so many reports, "The Department will continue to monitor the situation." When

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I read those words I know that the Department concerned intends to do absolutely nothing about the situation. I hope, therefore, that the Public Accounts Committee will return to these matters, because, within our remit, it is possible to follow up some of the points that the hon. Gentleman made in his admirable contribution.

I join the Committee Chairman, the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), in his tribute to Sir John Bourn and the staff of the National Audit Office and, indeed, the Comptroller and Auditor-General for Northern Ireland. The Committee is very well served by Sir John, by his opposite number in Northern Ireland and by all members of the National Audit Office. The whole House has cause to be grateful to them all.

Only a few days ago I was extremely interested to hear on the radio a report of the substantial sums which the Public Accounts Committee has saved the taxpayer as a result of our examinations of various Departments of State during the past 12 months. I do not think that many other public bodies can demonstrate such savings. I trust that my hon. Friend the Financial Secretary to the Treasury heard those figures and that they have given him and his colleagues in the Treasury some comfort in their difficult task.

The Public Accounts Committee is a remarkable body, as the Chairman has pointed out. It has 15 Members of Parliament drawn from all quarters of the House who meet twice a week and whose lives are virtually dedicated to ploughing through very long and complex documents, examining witnesses and subsequently approving reports--about 50 of them. It is a truly gigantic task. I am very pleased that several hon. Members who are not members of the Public Accounts Committee are present and that one of them has already contributed to the debate. I hope that other hon. Members will also do so.

I should like to pay another compliment, and that is to the radio programme "In Committee", which is broadcast at 11 pm on Sundays. Whenever I am asked by my constituents or by business men what the Public Accounts Committee is all about, I say, "I will invite you to attend a sitting so that you can hear what we are doing and I will send you reports that interest you, but I recommend that you listen to In Committee'." That programme informs the public not only about the work of the Public Accounts Committee but about the work of other Select Committees of the House.

We spend much of our time examining waste, mismanagement and incompetence. The waste, mismanagement and incompetence to which right hon. and hon. Members have referred should be the Treasury's top target if it wants to reduce public expenditure. A great wealth of information is available to the Treasury in dealing with such matters, and I look forward to some vigorous action being taken. I am sorry that I have to refer to mismanagement by the Treasury itself. The first report that I wish to draw to the attention of the House is not one of those to which the motion specifically draws our attention, but it is particularly significant in the light of forthcoming events because it relates to the failure of no less a Department of State than Her Majesty's Treasury to exercise proper control over the purchasing procedures of an organisation for which it and it alone has direct responsibility.

That organisation is known as Forward--forward with what I am not quite clear. Forward with the people it might be, but I am not sure about that. However, to most hon.

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Members it is probably a somewhat shadowy organisation, and I doubt whether, if asked, many would be able to say what it does. Until a little time ago, it was known as the Civil Service Catering Organisation, for which the acronym is CISCO.

Forward, therefore, is part of the Treasury. It is supposed to operate on commercial lines with its own chief executive, finance personnel and operations directors. It runs, so we are told, or helps to run, about 175 restaurants in a wide range of Departments. Among other things, we discover that the Chancellor of the Exchequer is one of the largest restaurateurs in the country, which is also not widely known by hon. Members or the general public. Moreover, that organisation has a turnover of £30 million per annum. The Comptroller and Auditor General reported to the Public Accounts Committee on irregularities in the accounts of Forward for 1991-92 and qualified the audit certificate in the light of continuing uncertainties on key systems and controls and on the propriety and regularity of Forward receipts and expenditure.

That is a truly astonishing state of affairs, because those irregularities are the result of what the Treasury has acknowledged to be a serious breakdown in financial control. The estimated overall cost of failures in control at Forward is between £0.5 million and £1 million. Since our report to the House was published, the Treasury has agreed with the Inland Revenue that Forward's liability for unpaid tax and national insurance contributions is no less than £380, 000. That, taken with £110,000 for the cost of work by Ernst and Young and up to £400,000 for cash and stock losses in the two years covered, suggests a total loss of up to £900,000.

I hope that my hon. Friend the Financial Secretary and my right hon. and learned Friend the Chancellor of the Exchequer, when he presents his Budget proposals to the House and no doubt talks to hon. Members about the stern measures that are necessary to deal with deficiency and to ensure that waste is rooted out in all Departments of State, will look to his own Department and realise that the problem of irregularities is not confined to organisations outside his own or, indeed, outside the Government. It is extraordinary that that failure of control occurred.

I shall say a few words about what happened. Fictitious employees were entered on the casual employee payroll so that the wages of real employees could be recorded as remaining below the pay-as-you-earn threshold. In other words, there was insufficient evidence to establish that the employees were genuine. That is an extraordinary state of affairs. It reminds me, and it may remind the Chairman of the Committee, of a remarkable speech in the House some years ago by the late Lord Ridley of Liddesdale when he was unearthing the irregularities in Fleet street. Workers were being paid in fictitious names such as Mickey Mouse and Donald Duck, which caused the Inland Revenue to tighten up on those irregularities.

In this case, we find an organisation directly under the control of the Treasury doing exactly the same thing. Payments to casual employees remained gross without deductions for PAYE and national insurance, records were destroyed at four locations, and so on. The Treasury minutes that we received in response to the investigation of this sorry matter said

"A report on progress in settling the disciplinary cases will be sent to the Committee in the near future. Of the original 15 cases, 11 have been concluded. Of the remainder, 1 case awaits the completion of police investigations and official investigations are

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still in progress on the other 3. There have been two further cases, one is still under consideration, and in the other the person involved is to be dismissed following a successful prosecution." I do not regard that as impressive in view of the serious nature of the matters involved. To pick up the Chairman on his use of vocabulary in dealing with these matters, I am dissatisfied with the result.

The second case on which I must comment concerns Chelsea and Westminster hospital,y and the outstanding leadership of its chairman. I am sad, therefore, that we have heard today about the lack of control over a substantial hospital construction project. It is extraordinary that such a public authority proceeded with the construction of a hospital of this size without being certain that all of the necessary planning consents were firmly in place. That must never happen again.

The hospital was built on the assumption that certain income would be available from the sale of land to defray the cost. With the fall in land prices, the income was not forthcoming. It is easy to be wise after the event, so perhaps one should not be as critical as one might otherwise have been. Nevertheless, it is terrible when we read that North-West Thames relied on loans of more than £56 million from other regions to finance the project and paid interest of some £4 million on those loans, thus increasing the cost of the project. As we have heard, the whole operation resulted in a huge cost overrun. That means that other desirable projects in the region will be short of money that might otherwise have been allocated to highly desirable projects. That must never be allowed to happen again.

Another matter to which the Chairman referred briefly is the difficult and sensitive matter referred to in the Committee's 25th report, which deals with the payment of legal expenses incurred by the former Chancellor of the Exchequer. That report has shown the Public Accounts Committee at its best. I have been a member of the Committee for 10 years, and I cannot remember a previous occasion when we have taken evidence from the head of the civil service, the present permanent secretary to the Treasury and his predecessor. The proceedings were carried out with great dignity, and the Committee investigated these matters in the greatest possible depth. I am pleased that a number of things have been made clear : first, the expenditure of public money was confined principally to the handling of the necessary press relations that resulted from the incident and, secondly, as a result of the Committee's investigation, the Cabinet Office has produced a good code of practice so that, if such events occur in the future--we all know that events of this sort can occur in public life--new guidelines lay down clearly where the division lies between personal and public duties and expenses, and private and party political activities. That must be commended. I hope that members of the public and those who are interested in the incident will be reassured by the fact that, as a result of the work of the Committee, we now have clear and explicit guidelines which demand that, when there is any doubt, the accounting officer must be informed and the advice of the Comptroller and Auditor General should be taken. That is a satisfactory conclusion to an

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investigation that was carried out with dignity and swiftly, and involved taking evidence from the highest officials in the civil service.

I cannot conclude my remarks without mentioning briefly the Welsh Development Agency. My colleagues have spoken about it and I do not wish to say a great deal more, except that it is one of the worst cases that has ever come before the Committee in my 10 years of membership. I was especially glad to hear the statement of my right hon. Friend the Secretary of State for Wales in the House last week in which he made it clear that the report showed that his predecessors were to blame. He accepted responsibility for the actions of politicians in his Department but at the same time drew a fair balance between the responsibilities of the political heads of the Department and its chief officers.

I was impressed by reading the remarks of the hon. Member for Caerphilly (Mr. Davies) in questioning my right hon. Friend the Secretary of State. I hope that the Committee's examination of the entire matter and the active steps that are being taken by my right hon. Friend the Secretary of State for Wales will bring the sorry tale to a conclusion. I certainly share the sentiments expressed by the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) that the time has come to get on with the work that needs to be done in Wales and that the errors of the past should not in any way be allowed to prevent useful and important action being taken by the Welsh Development Agency to stimulate investment, growth and employment in the Principality.

As a Committee, we can justifiably claim that it has served the House diligently and that it has a good record of savings. I hope very much--I say this every year--that more hon. Members who are not on the Committee will be persuaded to read the reports, to attend the debates and to speak. I have ensured that local business men, people in local government, clergymen and constituents who are interested in certain aspects of public life receive and read the Committee's reports so that they know that their interests are being protected and that we are determined to get value for money and to concentrate on effectiveness and economy in the conduct of the public service in Britain.

7.1 pm

Mr. Terry Davis (Birmingham, Hodge Hill) : I join the hon. Members for Uxbridge (Mr. Shersby) and for Hertfordshire, West (Mr. Jones) in paying tribute to my right hon. Friend the Member for

Ashton-under-Lyne (Mr. Sheldon) for the way in which he has continued to chair the Public Accounts Select Committee during the past year. The Committee is indebted to my right hon. Friend for the skill and sensitivity with which he has guided our deliberation. I am sure that the work of the Committee has been greatly enhanced by his chairmanship and for that we are all grateful.

I also join the hon. Member for Uxbridge in paying tribute to the work in the past year of Sir John Bourn and Dr. Jack, his colleague from Northern Ireland, and their respective National Audit Offices. If I do not refer in detail to any reports published by Dr. Jack, it is only because the scandals that we have witnessed in connection with England and Wales have been much greater in scale at least than those in Northern Ireland.

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I pay especial tribute to the staff at the National Audit Office and to those who do the less glamorous work at the Certification Office, who have produced more and more reports in the past year. The reports attached to the accounts have arisen not from the value- for-money studies but from the straightforward certification audits and have given rise, in many cases, to our hearings. There has been a definite increase in the number of occasions on which we have taken evidence from those reports compared with previous years and the staff who work on that aspect of the National Audit Office deserve congratulation.

We need reports from the National Audit Office more quickly. The preparation of the value-for-money reports are sometimes delayed by the protracted negotiations between the National Audit Office and the Departments involved. The delay is much less in the production of reports in connection with the certified accounts and I suspect that is because of the pressure to publish those accounts. That pressure limits the amount of time that we spend talking with the Departments. The Departments appear sometimes to be procrastinating to draw out the discussion and dilute the reports of the National Audit Office. If I were to make one point of constructive criticism of the NAO, it would be that it should take a tougher line in standing up to the Departments and refusing to dilute its reports. Of course, as is proper, it should record the comments and reaction of the Departments to the criticisms made by the NAO, but it should stand by those criticisms and not seek agreement at all cost. On one or two occasions in connection with the value-for-money reports, I suspected that the influence exerted by the Department over the NAO in its anxiety to publish the report was greater than we would have wished. We need quicker reports and more rough and ready reports--which would help the speed of production. Sometimes it is important to take evidence on something that has happened before too many months or even years have passed. Far too often, the Public Accounts Committee finds itself discussing a problem not with the accounting officer who was responsible at the time but with his successor. A perfect excuse and defence which arises time after time, sometimes gently and sometimes all too obviously, is that the accounting officer was not in office at the time of the scandal under discussion. Many members of the PAC have noticed that feature.

The way to stop that failing is to have reports brought before us more quickly. The NAO should not strive too energetically to obtain agreement with a Department, and in that way we might speed up our work, hasten our deliberations and have the opportunity to talk about what went wrong with the person on the spot at the time, rather than the person promoted to the job and left holding the baby. The hon. Member for Hertfordshire, West referred to

cover-ups--especially in the case of Wessex regional health authority, which is not before us for debate today. The hon. Gentleman said that he thought that sometimes things were kept confidential to save the red faces of officials. I am sure that he is absolutely right. All members of the Committee are conscious of the fact that that has happened far too often in the past in connection with defence scandals where there has been a colossal waste of money and delay in defence programmes. The present head of the Defence Procurement Agency is much more open than his predecessor and things have

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improved. Dr. McIntosh is more appreciative of that desire for openness--perhaps because he comes from Australia--and is more open, not only with us but with the public ; he does not try to keep secret matters that were probably known to the Russian Government long before they were known to the Public Accounts Select Committee. The desire to preserve confidentiality and to avoid embarrassment has often been the driving factor, not the need for secrecy to protect our services.

We have witnessed such unnecessary secrecy in other cases, most notably that of the Chelsea and Westminster hospital, mentioned by the hon. Members for Uxbridge and for Hertfordshire, West whose constituents are in the North West Thames region. There were two issues involved. One was the amount of money, the overrun of costs in the building of that hospital, and the other was the delay in completing its construction. That second issue has not been mentioned. I emphasise that that delay was an excellent example of an attempt to suppress information.

The information was in a report that came before us, but Sir Duncan Nichol, the chief executive of the national health service management executive contacted the Chairman of the Public Accounts Committee and asked that the table that showed the delays be kept secret, and that we ask questions only in a secret session and that the details be not made known to the public-- the people who lived in the North West Thames region who were suffering from the postponement and even permanent deferment of the much needed schemes, as the hon. Member for Uxbridge mentioned, and who were to benefit from the much-awaited hospital and were made to wait much longer than they should have. That information was to be suppressed,but it has not been, because the Chairman of the PAC, supported by the Committee, insisted that there was no reason for keeping that information confidential and that it should be published. The people who live in the region are entitled to that information, just as the taxpayer is entitled to know the way in which the Ministry of Defence has failed to get a delivery of weapons programmes on time. People should not be in fear of information becoming public knowledge, but they are because they want to save themselves from embarrassment.

Of course, the greatest embarrassment of the past year's cases, which has been mentioned by every speaker in the debate, is the case of the Welsh Development Agency. My hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) was right on the mark when, quoting from another report, he said that the real cause of the problem was the prevailing and pervasive culture that has permeated far too many public bodies in the past 14 years. It is the same culture that has affected and afflicted the West Midlands regional health authority and the Wessex regional health authority, as we shall see when we come to next year's debate on the basis of the report that is shortly to be published. I shall say no more about that now, except that it raises the same issue.

Another special feature of the Welsh Development Agency is precisely that it is Welsh, or rather that it is sponsored by the Welsh Office. In the past few years--I emphasise that because it has not always been the case-- the Welsh Office has become a byword for waste, inefficiency and mismanagement and for its inability to control non-departmental public bodies. To be fair to the

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Welsh Office, it is not the only body to have that problem. The problem seems especially to afflict non-departmental public bodies administered under this Government.

We had a similar problem with the University college of Cardiff. The matter did not involve the Welsh Office, but it was a similar problem with a public body in south Wales in which many of us felt that there were political overtones. There were problems with the Development Board for Rural Wales which were very similar to the problems with the Welsh Development Agency, which did involve the Welsh Office.

There is another body that many of us tend to confuse because it is headed by one of the previous Secretaries of State for Wales--Lord Crickhowell. That body is the National Rivers Authority. The NRA is not based in Wales, but it is headed by a man who was Secretary of State for Wales and, during his chairmanship, the PAC produced a very critical report which mentioned many features that were the same as those of the Development Board for Rural Wales and of the Welsh Development Agency. The problem seems to afflict the group of Conservatives who come from Wales, and seems to feature far too often under this Government.

I was very concerned about the way in which the Secretary of State for Wales evaded a question I put to him last week. I drew his attention to the fact that the Welsh Development Agency scandal was only the latest in a series of scandals. I then asked him whether there were any more scandals to come and he said that of course he could not guarantee that there would be no scandals in future. That was not the question. He may have misunderstood the question or have simply been evading it. The question is, how many more scandals which originated before the changes were made have yet to come before the PAC? In other words, how many skeletons are still in the closet waiting to come out? The question is not how many bodies will be put in the closet in future. Some of us are concerned about whether we have seen the end of the series of reports on Welsh bodies under this Government.

The hon. Member for Uxbridge has said that all the reports that come before us are a catalogue of waste, incompetence and mismanagement. He is right. My right hon. Friend the Member for Ashton-under-Lyne has pointed out that there are some very able civil servants. It is good to remind ourselves of that fact. We do not tend to see able civil servants ; we tend to look at reports that are highly critical of what has happened and of what has been done by civil servants in implementing Ministers' policy decisions. We have seen a series of examples of incompetence during the past 12 months. I have been concerned with the way in which many of the accounting officers have performed in front of the PAC. The hon. Member for Caithness and Sutherland (Mr. Maclennan) drew justifiable attention to the dismal--that is a mild word for it--performance of Sir Thomas Legg who is, after all, a permanent secretary at the Lord Chancellor's Department. He is not the only example to come before us in the past 12 months.

We had, for example, the permanent secretary to the Department of National Heritage, who came before us to talk about the scheduling of ancient monuments in England. There are 60,000 ancient monuments in England

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