Examination of witnesses (Questions 100 - 106)
MONDAY 11 MAY 1998
MR JAMIE
MORTIMER, MR
FRANK MARTIN and MISS GILL
NOBLE
Mr Davidson
100. You mentioned the crucial and important
role of this Committee and I think I want you to know that it
has always been my experience that flattery does work; it is always
worth doing! Can I start off by asking about the new system? The
new system clearly has a number of substantial advantages in terms
of delegation and accountability, but picking up the point you
made about Highlands & Islands Enterprise, do you think departments
and agencies like that are ready to take on the new burdens this
new system will hand over to them?
(Mr Mortimer) In some cases they would need help
and advice, and they can come to us and it is part of our job
to help them through those decisions. We want to see high standards
of propriety and regularity, and we will gladly give that help.
In other cases, I think they will make a more determined effort
to analyse the issues for themselves, to look at the guidance,
see how this fits in with other decisions within the same organisation,
and come to a good decision.
101. Will the provision of help and advice
though not just simply keep them back in the position they are
at the moment; those departments who are incapable of doing it
themselves?
(Mr Mortimer) I think if they have this responsibility
they will get more experience and more confidence in working through
these problems, and will in fact have to come to the Treasury
less often than in the past.
102. I can remember from my days in local
government, every time the social work department used to get
something horrendously wrong they would always describe it as
a valuable learning experience. Can we anticipate a number of
valuable learning experiences as people work their way through
this new system?
(Mr Mortimer) There will be errors. I do not mean
to sound complacent but people do make mistakes, but we believe
this system of aligning accountability and responsibility should
lead to better decision making. It will not be perfect decision
making, but I think it should be better.
103. Can I clarify one thing? I picked it
up in terms of losses and special payments and so on, and obviously
one of the anxieties we have is about irregularities and we tend
sometimes to focus too much on irregularities, but I am not quite
clear how under the system we can have some faith that irregularities
will be picked up. Are you saying that that will be the C&AG's
responsibility, to pick them up?
(Mr Mortimer) It is one of the C&AG's responsibilities
when he does a financial audit to check for regularity. If expenditure
or receipts are handled in an irregular way, ie inconsistent with
the law and the rule book, then the C&AG will draw attention
to that and may even qualify the accounts. That is part of his
job. The Treasury, even with these changes proposed in this document,
will have a huge amount of information about what is going on
in departments. It will still see a lot of cases, the more important
cases, about delegated threshold levels. It is involved in all
sorts of policy reviews like the comprehensive spending reviews,
it gets involved in systems reviews, for example fairly recently
one Treasury official participated in a very good study of policy
evaluation in the former DoE. So one way or another, we do have
a huge amount of information and I believe we can utilise that
to make maximum impact in terms of achieving good value for money,
proper and regular expenditure and good control over-spending.
104. Would I be right in thinking that instead
of the existing system, where basically you tell people what they
should not do, we will have the other department telling people
in arrears what they should not have done?
(Mr Martin) No, we still tell them what they should
not do but we tell them in guidance; in Government Accounting
and other guidance. That clearly tells them what they should and
should not do.
105. Given then that we are freeing you
up for dealing with a lot of smash, as it were, the very things
that really in many ways you should not be involved in, what gains
can we expect to see from all this additional time you are able
to spend on the bigger picture?
(Mr Mortimer) I think I said before that in terms
of freeing up staff, the changes are marginal, and that there
may be a benefit in terms of a few person years in the Treasury,
no more than that. It is one element of a re-think that we have
been undertaking within the Treasury over the last few years about
how we should go about our tasks and how we can achieve our objectives
most effectively, and how we can improve relations with departments.
We want to get away from the old-fashioned adversarial relationship
and try and persuade departments that in fact we are working to
fairly similar ends and by those means achieve our objectives
of good control on public expenditure, value for money, propriety,
regularity and accountability.
106. With all this development of better
relations and the growth of general niceness, how exactly will
we be able to assess there are any improvements? Are there any
objective criteria which we will be able to use to identify this
actually has helped?
(Mr Mortimer) In a general way, there are indicators.
We can assess, generally speaking, what the standards of propriety
and regularity are by the number of qualified accounts each year.
We can assess whether value for money is being achieved by measuring
efficiency improvements in departments, quangoes and agencies.
People can judge for themselves whether the policies are being
sensibly designed, whether alternatives are being properly analysed.
So in a general way, one can assess whether these developments
are worthwhile.
Chairman: It comes
to me to round up and thank you. Can I say, Mr Mortimer that far
from disagreeing with Mr Williams' comments, I actually endorse
everything he said in terms of the weakness of the scrutiny of
the estimates procedure generally in the Commons. Before we let
you go can I remind the Comptroller and Auditor General of something
and ask you to accelerate a response to us, and that is we had
asked you about the problem of the distinction between acceptance
of a Recommendations Committee proposal and implementation of
that and the control and follow up on that implementation and
we have had the suggestion of a report back both on a time and
on an accounting officer basis and we are still waiting for a
reply. It would be quite interesting to see that at some point.
Can I say thank you very much Mr Mortimer, Miss Noble and Mr Martin
for moving your seats today to appear before us. Thank you.
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