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7.49 pm
Mr. Alan Williams (Swansea, West): You will agree, Madam Deputy Speaker, that in general it is an error for an hon. Member to attend a debate in which he has no intention of taking part. You will also confirm that my name was not on your list when you entered the Chamber this evening. However, a few thoughts have come to mind as a result of what I have heard this evening, particularly the points raised by my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) about the erosion of accountability through Government restructuring.
The ultimate democratic responsibility is illustrated by the apocryphal story of President Truman, who had a plaque on his desk saying, "The buck stops here". In the past two months we have seen a variation on that. We are now assured that the Home Secretary has a doormat which says, "The buck stops here", but the mat is outside his door.
There has been a redefining of ministerial accountability. As my colleagues on the Committee will recall from our hearings, the accounting officer should be outside the Minister's door. If the Minister is not accountable, the accounting officer is. When we heard evidence from Mr. Alan Langland, who is an excellent witness and is always very honest and straight, he made a point that was distinctly disturbing. As the accounting officer for the national health service executive, he is responsible for an enormous empire. He made a legitimate but salutary point when he said that he had started to create within his empire the concept of accountable officers. I wonder whether my right hon. Friend the Member for Ashton-under-Lyne remembers that phrase. Under the new system, Ministers shrug off any responsibility other than policy, accounting officers say, "The buck does not stop at my door either," and there are accountable officers further down the line.
I see in the Box to which we are not allowed to refer our friends from the Treasury who always attend our hearings. I asked the Treasury representative whether he could give us some idea of the number of accountable units. If I remember correctly--I do not have the minutes with me--he told me that it was something in excess of 600. I found that astonishing, as did most of the Committee. We all thought that we had a nice, simple system with Ministers responsible to Parliament and accounting officers directly responsible to Ministers.
The Treasury representatives have now told us that there are approximately--they did not know the precise number--600 such accountable units. It is no wonder that we have the shambles that my right hon. Friend rather gracefully and flatteringly described. He was very kind to the system but would not reveal its worrying aspects.
There was another evolution when Sir Peter Gregson gave evidence to the Committee. During his final appearance before us, which was a matter of considerable relief to him--it was not a matter of sadness that we would no longer be in his work programme--he said that everyone appreciates and values the work of the Public Accounts Committee, but it should not be confrontational.
I remember my first meeting with Sir Peter when the Committee was dealing with the privatisation of the electricity distributors. I almost had to use thumbscrews to extract from him the value of the assets that had been sold off for £6 million. Eventually he told us that they were worth £16 million.
It is nonsensical to pretend that we can have a Public Accounts Committee without any risk of confrontation. Most of the reports that we consider involve questions that are thought to need answers. If we had not been confrontational, we would never have found out about Operation Wizard--the attempt at a covert privatisation bid within the Welsh Development Agency. The National Audit Office was unable to discover it because the costs had been farmed out in different accounts. I promise the Minister that all that is duly recorded as it was before his time.
If we had not been confrontational, we would not have discovered some of the misdemeanours of the Development Board for Rural Wales or wrapped around the neck of Wessex its monumental failure.
My right hon. Friend the Member for Ashton-under-Lyne was kind enough to read the relevant section of the report, but there was nothing confrontational in what I said to the regulator of the lottery. Had we not challenged him, we would never have found out about his trips with GTECH. That was not in the National Audit Office report.
Sir Peter also said that we should not be concerned about blame, but there cannot be true monitoring and accountability if, when someone has committed an offence, or one has occurred accidentally, no attempt is made to find out who is responsible or to blame.
In 12 months, we have had a massive rewrite of the concept of parliamentary accountability. Ministers have said, "It's not me, mate, it's him." Accounting officers have said, "It's not me either, it's them," and "they" are spread out so widely in 600 units that most of them know that we could never get around to seeing them all.
Nearly everyone has referred to the lottery. I shall not dwell on the GTECH issue because I made my point in an intervention, but it is salutary to think that during the period when the regulator was swanning around the United States in presidential style in GTECH aircraft, his staff were not doing the work. They had employed outside consultants to advise them on the establishment of criteria against which they could judge whether the terms of the section 5 licence were being complied with.
According to another report from the National Audit Office, 21 such tests were devised, but a year after the lottery had started, of the 21 tests to ensure that the criteria were being observed, only one was operational and it was sloppy, 10 were partially devised but not in operation and another 10 were notional ideas and no work had started on them. That was in October 1995, just over a year after the lottery had started operating.
Mr. George Mudie (Leeds, East):
I am delighted to follow my right hon. Friend the Member for Swansea, West (Mr. Williams), although I know that I show up badly in comparison. I served on the Public Accounts Committee with him and others before I finally escaped to the Whips Office. Although it may seem wrong for me to speak in this debate a year after leaving the Committee, I could not do so at a better time.
I should like to place on record my appreciation of the chairmanship, courtesy, integrity and kindness of my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon). It was wonderful to see him get angry when faced with some of the individuals who attempted to avoid the very pointed questions that open up meetings. It was also an education and a pleasure to work with my hon. Friend the Member for Warrington, South (Mr. Hall) and the hon. Member for Uxbridge (Sir M. Shersby), and see the different approaches taken in the Public Accounts Committee.
The PAC dates back to Gladstone; it has a wonderful history. Coming from local government, I find it incredible that the Committee seems to represent the one area of parliamentary scrutiny of expenditure. When one tables written questions asking for the £24 million-worth of spending in a given area to be broken down and receives the reply that it would take too much time and expense to do so, one wonders what scrutiny there is. The PAC has an impossible task of covering all the Departments' public expenditure, and they well know that, if they escape scrutiny one year, another year or perhaps several years will pass before the roulette wheel comes back round to their turn.
One of the themes of the speech of my right hon. Friend the Member for Swansea, West was how badly the PAC is treated by the Treasury and, above, all, by Departments. Public scrutiny of public money is essential, and should be applauded. Gladstone should be applauded, as should my right hon. Friend the Member for Ashton-under-Lyne, who does a very important job. Almost every report that lands on the table from the National Audit Office demonstrates the need for such work and for more scrutiny.
I should like to refer to the Committee's 19th report, which relates to income support fraud and security in the Department of Social Security. It is not one of the reports highlighted in the bundle, but it deserves examination not only for the amount of money it relates to, but because it shows the Department's history. I am delighted to see the Secretary of State for Social Security about to take his place on the Front Bench. He is very hard when scrutinising benefit. I wish that he would scrutinise it more carefully and exert more pressure on the Benefits Agency, which seems to get away with murder in sheer incompetence. I shall back that up with figures.
The 19th report on the 1994-95 financial year demonstrated errors amounting to £848 million, including £546 million cash overpayments and, even more sadly, £183 million underpayments. As the report says, the errors are in an area of work where they can
The Secretary of State is on a crusade at the moment against benefit fraud. Benefit fraud in the income support vote amounts to £1.4 billion--£600 million more than the amount caused by self-inflicted errors by the DSS and the Benefits Agency. Such figures should be enough to cause the matter to be raised on the Floor of the House. Not only the level but the doubtful consistency of the Department in respect of those errors is of concern.
Income support began in 1988. Each and every year, the NAO has qualified accounts in that area because of errors. In 1993, the 33rd report on the Department of Social Security for the financial year 1991-92 stated:
In the Committee's 10th report two years later, for the financial year 1993-94, the PAC put total errors in income support since 1988 at more than £2 billion. Together with figures in the latest report, the DSS and the Benefits Agency between them have cost the British taxpayer almost £3 billion in that one area of benefit since 1988.
The Committee estimated two years ago that total arrears were £617 million, including £540 million overpayments and £77 million underpayments. There is a steadily worsening trail of error from 1991, through 1993 and up to 1996. The accounts were qualified each time by the NAO, hauled before the PAC and questioned thoroughly, and reports were prepared and sent to the Treasury: yet what was done about it?
I turn to the report in 1993 of the 1991-92 financial year. When my right hon. Friend the Member for Swansea, West hauls staff over the coals over such matters, he does not do it out of blood lust. We are talking about public money. Anyone can make a mistake, but to continue to do so increasingly over the years at such a level makes one wonder whether it would be a waste of time to bring the Department of Social Security and the Benefits Agency before the PAC again. Clearly the Department does not listen or learn, and pays no attention to the PAC.
In 1993, the Department said, "Aha, yes. It is a very complicated job." Apparently it had
I think that the fellow who drafted the report must have a sense of humour, because he wrote:
Of course, Hacker was at it. The response was, "We shall have a review." The review originally started in 1991--I would like the Minister to note that date. It was intended to deal with the "false statistics" that local DSS offices were apparently sending out. The Department did not really know the level of error, and intended to do something about that. The hon. Member for Uxbridge must remember it well.
Income support accuracy was to be made the Department's "number one priority" in 1993. It was going to have training, new advice and a handbook. So my right hon. Friend the Member for Ashton-under-Lyne, ever kind, courteous, patient, tolerant and understanding, said, "Go on your way. You will have learnt by your mistakes, you are taking all those steps and we shall not see you again." Ha, ha.
In 1995, the agency was back. By then, it had lost the computer somewhere. When asked about the appalling figures, it had apparently lost the computer, the handbook, the false statistics and--and I have lost my notes, but the point being made was that the work had become more complicated, so there was a need for training.
The ever obliging Treasury had stumped up £9 million for training, with the offer of another £15 million. Has anyone ever heard of such a case of throwing good money after bad? The ever gullible Treasury was offering £24 million to the Benefits Agency, because training was the answer. And in 1995 the agency again pledged that accuracy was its number one priority. Again, the ever understanding Chairman sent its representatives on their way. They may have had a tongue-lashing from the direction of Swansea, Warrington and Uxbridge, but they had escaped for another two years.
The latest report is now before us--or at least, it is not before me now, but I have it somewhere. Whatever we think of him, Hacker has been resurrected. The agency has now forgotten about training, and about the computer, the advice and the handbook. Now the line is, "We shall have a fundamental review." The fellow who wrote "Yes, Minister" could not have written that fiction--but this time it is fact. The review is the excuse that the Benefits Agency and the DSS gave to the serious hard-working members of the Public Accounts Committee--adding that, of course, accuracy would continue to be a high priority.
This time, the response was all about
In 1996, we have an even higher level of loss--£858 million. What could the Secretary of State do with £858 million? If those errors had not been made, much of that money would have been available, without any cuts being necessary, to do things that the whole House would want to do.
When I served on the PAC, there were rumours that a training session was being held for those who were to appear before that Committee. People were told, "You realise that you will be there for only three hours. There are about 15 members, and they will all take 10 minutes each. Some are worse than others, and some are more courteous and polite--but just get through that three hours."
That, at least, is training that the DSS and the Benefits Agency seem to have taken to heart. It is certainly working, because they get away with things. Some may think I am joking, but I hope that the Secretary of State will simply pull all the reports together and get a decent member of staff to find out what on earth is happening to his money.
The Department and the agency are thumbing their noses at the Public Accounts Committee and at the public. The loss is £858 million, yet the Treasury offers only four paragraphs in response to the PAC. The first paragraph says--surprise, surprise--
Then the civil servant who wrote the response obviously realised that he was going dangerously far, because he added:
I ask the Financial Secretary to read the next paragraph. I could read it out now, but if I did it would confirm in the public mind the idea that people in the Treasury and the rest of the civil service do not write in English understandable to ordinary people.
The Treasury says:
On Sunday night, I saw a nice programme featuring the Secretary of State and one of the permanent secretaries, who has now moved on to another Department, but who was then rehearsing to appear before the Public Accounts Committee. Representatives of his 166 accountants--obviously the cream, the best he can get--were briefing him for his appearance in front of my right hon. Friend the Member for Ashton-under-Lyne.
With such a record, does the Department deserve to continue to employ those 166 accountants? When do we say enough is enough? The permanent secretary appears
before the Committee and says that the loss is less than 1 per cent. of expenditure. Yet it amounts to £858 million. We cannot afford to throw away money in that way.
Where is that man now? In local government, we were supposed to be the hicks, the backwoods people--low-level, not parliamentary. But if we had a chief officer who delivered that standard of service year in and year out, he would be an ex-chief officer. That fellow is now a permanent secretary in another Department.
"cause real hardship to benefit claimants".
16 Oct 1996 : Column 892
They do not concern people the Secretary of State would chase or say were scroungers or did not require benefit. Of the total errors, £183 million should have gone to such claimants and did not. A written answer from the Benefits Agency demonstrated that, despite the fact that the Public Accounts Committee and the National Audit Office draw such figures to the attention of the Department, it does nothing to follow up the underpayments in an attempt to ensure that the money goes to the individuals concerned.
"We regard the reported levels of error in income support as unacceptable. The overpayments are a waste of resources and the underpayments are causing hardship to the most vulnerable members of society."
In that report, the NAO found that just under 17 per cent. of income support cases concerned monetary errors, and suggested that overpayments--this will gladden the Secretary of State's heart, but should raise questions about what has gone one since--amounted to £86.8 million and underpayments to £87 million. That totals almost £170 million.
"already spent several hundred million pounds on computerisation and this could rise to £2 billion by the end of the decade."
Now we have the 1994-95 accounts in front of us, and in that year £858 million of taxpayers' money was lost. In 1993, the response to the Public Accounts Committee was to boast that £2 billion was being spent on getting
the computer systems right, which would deal with the problem. Presumably the £2 billion was spent, but the mistakes are increasing. Two years ago the loss was about £600 million; now it is £858 million.
"The computerised system had also reduced the number of errors in the calculation of awards but other types of errors had gone up and more than outweighed that improvement."
Several hundred million pounds were spent on a computer that dealt with some mistakes, but which then produced more mistakes, costing more than the mistakes that it had stopped.
"tailored training . . . improving the detail and reliability of management information",
but it was followed by the rider:
"However, substantial and sustained improvements in IS accuracy will be achieved only with improvements in the processes and systems".
I thought that we had already spent £2 billion to do all that.
"the level of errors is unacceptable".
It takes the Treasury a paragraph to agree with that.
"As the Committee is aware, Income Support . . . is a complex safety-net benefit . . . inherently complex and thus creates a risk of errors at various points in the process".
There we are. They are off again, asking, "How do you expect us to get it right? Although the errors are unacceptable, the benefit is too complex to get right."
"Improving accuracy . . . will continue to be a high priority."
For how many years will it be a high priority? What about tailored training, and all those other improvements? There are four paragraphs, and now the Treasury has offered the agency more money.
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