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5.33 pm

Mr. Christopher Leslie (Shipley): I am grateful to have the opportunity to speak in this debate, particularly as new Member of Parliament.

As a Back Bencher I want to play a role not only in scrutinising legislation, but, equally important, in checking the Executive and ensuring that the functions of Government are monitored rigorously. I am enormously privileged to have been placed on the Public Accounts Committee so early in my parliamentary career. We should emphasise more often than we do that the Committee monitors Government expenditure--the expenditure of taxpayers' money--and works in conjunction with the National Audit Office to ensure efficiency, effectiveness and value for money. Those are the aspects that I particularly value. All Back Benchers, regardless of party, need to keep an eye on those aspects of our role--not that it is for me to lecture hon. Members, who are always more senior than me.

I was interested to join the Public Accounts Committee not only because of its role in acting as a check on the Executive, but because of the circular way in which the accountability mechanism has developed over time. To me, the history of the Public Accounts Committee is fascinating. Representatives from Departments can be subpoenaed and witnesses cross-examined. The Committee makes its recommendations, to which the Treasury responds, and then we debate them annually, as we are doing today.

I should emphasise that accountability is a good mechanism for government. It is one of the best ways in which the Committees of the House of Commons work. I join other hon. Members in paying tribute to the staff of the Public Accounts Committee, to the Comptroller and Auditor General and to the National Audit Office, as well as to the Committee's former Chairman, my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), and to its current Chairman, the right hon. Member for Haltemprice and Howden (Mr. Davis), who has been doing sterling work so far. I am sure that that work will continue.

I have been a local councillor in Bradford for the past four years. Perhaps it is a small amount, but Bradford council spends £400 million annually. Councillors have a great deal of hands-on involvement in deciding how money is spent, especially when budgets are tight and resources are decreasing. They go through local government expenditure line by line, scrutinising exactly where the money is spent.

Members of Parliament have a different experience, partly because most spending decisions are taken by Ministers, which makes it much more difficult for Back Benchers to scrutinise the way in which every penny is spent. We need to make a special effort to ensure, through the Public Accounts Committee and similar institutions, that we scrutinise Government expenditure more closely.

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Although I was not a member of the Public Accounts Committee in the year that we are debating, I have read through all 25 reports--at least trying to skim through the summaries--and I can see that it has done excellent work in uncovering not only waste but incompetence and mis-spent money. I shall point out a few examples that highlight those aspects.

The activities highlighted in the 19th report on the former Yorkshire regional health authority, which merged and became the North Yorkshire health authority in 1994, will be of great interest to my constituents. The report highlights crucial issues of corporate governance, which need to be monitored and implemented more rigorously throughout all Government Departments. What stood out most was the way in which relocation expenses were paid to managers, board members and consultants. Some £447,000 was paid to members of staff. We learn from the report that only £143,000 is ever likely to be repaid. An astounding amount was spent on dinners and functions--£695,000--between April 1992 and March 1994. That is an appalling amount. I get very angry when I think how that money could have been spent far more effectively and to the benefit of my constituents. Yet it seems that there is little that the Government can do to recover that money. That is also a theme I detect throughout the PAC reports and Treasury responses. There is great need to look at individual responsibility for mis-spending and to ensure that we chase up those individuals and bring them to justice if there has been wrongdoing.

The report on the Yorkshire health authority details severance payments and specialist payments made without necessary approvals and describes how a personnel manager awarded contracts worth £43,000 to her husband's company without declaring an interest. Yorkshire health authority entered into a long-term contract--15 years--with Yorkshire Water for clinical waste disposal, which involved £7.2 million expenditure; yet the contract was awarded without competitive tendering. It seems obvious today that competitive tendering in the awarding of Government contracts is vital and we need to ensure that Government Departments never again operate as the former Yorkshire health authority did.

The second theme that I want to highlight comes in the 16th report: "The Work of the Directors General of Telecommunications, Gas Supply, Water Services and Electricity Supply". The report shows the good work done by the directors general, but also highlights other failures of general Government expenditure. For example, in 1989, proceeds from privatisation totalled £3.6 billion, yet now the replacement value of the companies involved is estimated to be £138 billion. That is an enormous amount of money. The fact that those companies were sold off at such a low price is a scandal to which the PAC rightly drew attention.

My third theme can be seen in the 23rd report on: "Ministry of Defence Management of the Military Operations in the Former Yugoslavia". There were massive failures and weaknesses in accounting for stores, assets and ammunition, examples of which include £1.3 million-worth of ammunition with no supporting documentation and £4.1 million-worth of untraced ammunition. To me, the outstanding example of the need for greater concentration on accounting for the way in which the Ministry spends its money is the matter of

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vehicles that were either refurbished or written off. The estimate of the cost of that has risen from £20 million to £134 million--an astonishing figure and a lot of vehicles.

A further theme running through the reports is that--unlike the arrangements obtaining in local government, where there is personal surcharging--there is no real holding of individuals to account for such failures. That is why the PAC calling witnesses and cross-examining them is the vital link in the chain, and I am glad to play my part in that. However, there are several other matters that the PAC should promote and persuade the Treasury to implement as soon as possible.

To highlight more effectively mis-spending of Government money where it occurs and to throw a spotlight on inefficiency, we need to ensure that resource accounting is implemented across more Government Departments, more speedily, because that way of presenting departmental finances helps to show which areas are more questionable than others. I urge Ministers to consider the way in which resource accounting mechanisms are being implemented throughout Government and to ensure that the process is accelerated.

I agree with the comments of the right hon. Member for Haltemprice and Howden about access. It is anomalous for the PAC to have access to some areas of Government expenditure but not others. The Committee is limited in respect of publicly owned corporations, recipients of grants and contractors. Representatives from the National Audit Office should have access to training and enterprise councils, so that they can examine how money is spent. TECs are required to hold only one public meeting a year, which provides nowhere near enough accountability to the public, never mind to the other arms of Government or to Parliament. There are other areas of Government spending--housing associations, Railtrack, Camelot, the royal palaces and so on--that need to be opened up to access by the PAC and the NAO so that we can ensure greater rigour in the scrutiny of their expenditure.

I would also suggest that there is a need for greater co-operation between the Treasury and other Departments, not least because, too often, when the Treasury can be held to account for certain aspects of expenditure and the Department for others, certain matters slip through the net. Progress has been made in recent years, but I urge my hon. Friend the Minister to seek to create a system of government that works across the divides and artificial boundaries between Departments. Then we can look at Government expenditure as a whole and highlight general areas of policy and expenditure, which should be reviewed.

In conclusion, I emphasise that, when we are talking about rigorous monitoring of Government expenditure, we are talking about taxpayers' money. I become angry when I read through the reports and see how much money is wasted, goes missing or is unaccounted for. One way of quenching that anger has been to become a member of the PAC, because there is no greater pleasure than to haul some of those guys in front of us and put them on the spot. That should be done more often. All the matters I have raised have been touched on before by the PAC and the NAO and I hope that, in the coming year, we can be equally rigorous in our examination of public expenditure.

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5.46 pm

Mr. Richard Page (South-West Hertfordshire): It is quite like old times to return to the annual Public Accounts Committee debate after an enforced absence of two or three years. As I look around, I see that little has changed: only a small number of hon. Members are attending, despite the wealth of ammunition and the excitement that our reports can produce. Year after year, I keep hoping that the debate will be better attended, because of the enormous amount of valuable work that should be given better public examination and see more of the light of day.

Before turning to the reports, I add my thanks to those already expressed to the previous Chairman, the right hon. Member for Ashton-under-Lyne (Mr. Sheldon). He guided our Committee for some 14 years quietly and without histrionics, although the opportunity for drama certainly presented itself. With quiet determination, he put greater emphasis and underscored more strongly the importance of our reports when they emerged. I wish the same success to his successor, my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis). I shall watch with interest to see what profile he stamps on the chairmanship as the weeks and months unroll.

At the end of his speech, my right hon. Friend the Member for Haltemprice and Howden was right to flag up the importance of the NAO's role in following taxpayers' money. There should be no bar to finding out how the money has been spent: it comes out of our people's pockets and is spent via the various systems of government, so it is absolutely right that we look carefully and closely at that expenditure. I want to flag up well in advance my belief that the role of the National Audit Office should not be diminished because of the results of the referendums in Scotland and Wales. It might be different if Scotland and Wales were financially self-sustaining, but as each receives a substantial amount of money per head of population under the Barnett formula, the role of the NAO and the PAC should continue undiminished.

In fact, I should like to take that argument even further and extend into European financial affairs the work of the NAO in examining where our money goes. I suspect that the NAO might be slightly more rigorous than some other bodies in tracing where the money goes, finding out how it is spent and ensuring that we get value for money. That concern was taken up in the Committee's sixth report. Paragraph 16 of its conclusions says:

"We are pleased to note the extensive co-operation between the Court and the National Audit Office on the audit of the Community's transactions. However, we are concerned that the scope for such co-operation is restricted in that, unlike the Court, the Comptroller and Auditor General does not always have access to the final recipients of European monies."

That includes some of our money.

The report continues:

"We expressed our concerns over this limitation in the Comptroller and Auditor General's powers in our 10th Report of Session 1995-96, and we recommended that his powers be brought in line with those of the Court and the Commission."

I look to the Minister to bring about a change. It goes on:

"We are therefore disappointed that, in the Treasury Minute of 22 May 1996, the Government rejected our recommendation on the grounds that the Comptroller and Auditor General does not need to perform work carried out in areas covered by the Court in order to report fully and effectively to the House."

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We should reconsider the National Audit Office's remit so that the Committee can monitor how our money is spent in Europe.

When I first served on the Committee, more years ago than I care to remember, I looked through the catalogue of horrors and thought to myself, "Good heavens, the Departments will realise their mistakes and these disasters will dry up." Then I thought, "Hang on, the Public Accounts Committee has been going for a hundred years, so it is unlikely that matters will dramatically improve just because Richard Page is on it," and thus it has proved.

The pile of reports is equally as impressive as it was when I was on the Committee two or three years ago. One or two old friends have come back to greet me, such as the new British library and the various excitements in a health authority. Two hon. Members have commented on the new British library. I query the word "new", because it was started in 1982, and it will not seem new when it eventually opens--I am tempted to say "if" it eventually opens, but let us travel in hope.

The second report refers to the PAC's examination in 1990. I took part in that examination and in the critical report. Quite frankly, we wasted our time seven years ago. We need not have bothered. We hear about the power of the PAC, but it did not work very well on that occasion. At that time, we were told that

"the new British Library would be completed in 1996 within a cash limit of £450 million."

Is it open now? No. Is it within the £450 million limit? No. The report says that

"the building will be on a scale less than was envisaged at the outset;


the building will not be fully open to the public until 1999; and


the cash limit has increased to £511.1 million".

I queried the word "new", because technology has moved on. The report says that there will be only 12 per cent. more reader seats. With the advent of new technology, that is unacceptable: in fact, it is a disaster. I knew that it would be a disaster, because I visited the site 10 years ago. I asked the gentleman who was showing me round, "What will go in this big hole in the ground?" and he said, "All the books will go in there." I asked him what sort of books, and he said, "All sorts of books." I said to him tongue in cheek, "Will you have the assembled works of Lord Archer?" and he said "Yes." I then knew that the British library would not travel smoothly towards its completion.

Information technology has not been used correctly. The British library has another site in Boston, so a good fibre-optic cable and more automatic readers should be the way forward.

My right hon. Friend the Member for Haltemprice and Howden summed up the general lessons to be learnt. The report says:

"In our view the new British Library could be used as a model of how not to manage a major construction project."

I emphasise that comment. The Committee examined this matter seven years ago, and there is precious little to show for it.

The 19th report dealt with the former Yorkshire regional health authority, which the hon. Member for Shipley (Mr. Leslie) touched on. I can do no better than to quote my close friend the late Sir Michael Shersby, who took evidence from Mr. Langlands. Sir Michael said:

"I must say that when I read this report I came to the conclusion that it was really one of the worst cases that I have had the misfortune to consider since I joined this Committee in 1983."

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He was absolutely right. It is unacceptable that the personnel director of the former authority was awarding contracts worth £43,000, one of which she was intending to manage when she retired. She did not declare any of them.

The former local authority spent £695,000 on luncheons, functions and dinners at hotels, including £10,000 on two "Super Sleuth" weekends, which may have been exciting and interesting, but did not significantly advance the general health care of people in Yorkshire.

I could go through the report and refer to the failures and errors one by one. The £447,000 relocation expenses were paid after the employees had relocated: they were not paid in advance to enable them to move. It would be interesting to know to what extent health care in Yorkshire has suffered as a result of those vast relocation expenses and the sums that were spent on "Super Sleuth" weekends and grand dinners. As I said at the beginning of my speech, it is as though I had never been away.

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