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Mr. Tam Dalyell (Linlithgow): When the hon. Gentleman says that he got to grips with the accounts, did he talk to the Scottish Office and give it an opportunity to give an explanation?
Mr. Letwin: I took advantage of the House of Commons Library and asked for a note on the matter. So far as I can make out the expenditure is partly the consequence of the rather elaborate federal structure--perhaps of interest to the hon. Gentleman--that the organisation operates with its subsidiaries, the local enterprise companies. It is also no doubt the case--I judge this from the statements made on the internet provision,
the website and other statements by Scottish Enterprise management itself--because it prides itself on offering a high level of service to what it calls its clients, or those whom it is trying to help. The fact remains that the total sum of expenditure on management and administration is extraordinarily high.
Mr. Alasdair Morgan (Galloway and Upper Nithsdale) rose--
Mr. Letwin: Of course I will give way.
Mr. Morgan: Would the hon. Gentleman--
Mr. Dalyell: Simply once more--
Mr. Deputy Speaker: Order. The hon. Gentleman must indicate to whom he is giving way.
Mr. Letwin: I do apologise, Mr. Deputy Speaker. I did not know that two hon. Members were seeking to intervene. I give way to the hon. Member for Linlithgow (Mr. Dalyell).
Mr. Dalyell: As one who in his constituency work, like my colleagues, has a good deal to do with the organisation, I have the anecdotal and first-hand impression that it is efficient. I do not want to score points against anybody, but fair is fair. Before making this kind of criticism the hon. Gentleman should talk to those involved.
Mr. Letwin: Nevertheless there is a set of accounts and the hon. Gentleman's anecdotal impressions must be reconciled with the facts that the accounts present. The facts presented suggest that £70 million of public money is spent on management and administration. That is not all that emerges from the accounts. The body also publishes a balance sheet. We might ask ourselves just how much cash an organisation like this needs to keep in the bank at any given time. Perhaps a few million pounds would be perfectly reasonable. Is it not therefore a matter of some surprise to discover that almost £90 million are kept in cash at the bank or in hand? Does that not strike one as a rather large sum of money?
Mr. Morgan: Regardless of the validity or otherwise of the hon. Gentleman's criticisms, would he care to tell the House who put in place the structure to which he is referring?
Mr. Letwin: The structure was put in place by the previous Government. That is fully acknowledged. It is a matter of some concern to me that the previous Opposition did not point out some of these things. That is no reason for the current Opposition to fail similarly. It is the duty of this House to scrutinise without regard to political partisanship; that is precisely the job that I am trying to fulfil.
Mr. Desmond Swayne (New Forest, West): It has been suggested that there are bound to be rational explanations
for the phenomena to which my hon. Friend drew attention. We have a Minister present who will no doubt be able to explain the matter in his reply.
Mr. Letwin: I am grateful to my hon. Friend, who is right that that should be the position. No doubt my remarks will cause the Minister to make some illuminating utterances, if he chooses to make any later. My hon. Friend would be misled if he supposed that it is only the items to which I have referred that cause concern.
In the strategy guidance to which the Minister referred, there is no mention of how the organisation is administered. Much is said about what it should be doing vis-a-vis the external world but nothing, as far as I could determine, about how it acts internally. That leads me to suspect that the Minister may not quite be able to live up to the high expectations of my hon. Friend the Member for New Forest, West (Mr. Swayne) of his ability to enlighten the House on the matter.
Things are worse than might be supposed because on examining the accounts, we next discover--the Government appear to have noticed this, to judge from the statements of the Secretary of State--that Scottish Enterprise has turned itself over the years into a sizeable property company. It holds an asset base--it is not clear on what valuation--of about £200 million, on which it seems to make a normal commercial return of about 5 per cent. One might say that there was nothing wrong with that, but it would be interesting to discover why it needs to hold such a portfolio. None of the statements in the report and accounts or otherwise published by the organisation make the matter clear. I must share my view with the Secretary of State because he has asked it to redirect its efforts away from property towards other activities.
The organisation has a heavy burden of management--at least in respect of the costs associated with it--a large amount of cash in hand, and a big property portfolio. I could bore the House with an analysis of the other issues that cause concern.
Mr. Letwin:
I do not intend to do that, not least because I know that Labour Members are desperately keen to get on trains and disappear under the new dispensation for Thursdays.
It is a remarkable fact that, irrespective of the veracity of the anecdotal observation of the hon. Member for Linlithgow that the organisation is highly efficient, the matter has not, so far as I was able to determine, been investigated. Over many years, the Public Accounts Committee has not investigated whether it operates thoroughly efficiently. That brings me to the main burden of my argument.
The Minister is right that hereafter, it will not be this Parliament in which such questions can be raised. The Public Accounts Committee will no longer in any obvious sense be able to examine them; they will move to the Scottish Parliament. The Minister will remember that as a concern of Opposition Members right from the beginning of the prolonged debates on devolution. It was raised vividly in one debate by the Chairman of the PAC. I know that we are talking about efficiency rather than
outright fraud or impropriety, but how will such matters be monitored in the new arrangements for the Scottish Parliament?
Sir Robert Smith:
To draw conclusions from what the hon. Gentleman has said so far, the Scottish Parliament will provide an opportunity more closely to monitor such matters because it will have the time and inclination. As he said, the current set-up has not done the job and he has found nothing in print to assist him in understanding the accounts.
Mr. Letwin:
That is an interesting point but I wonder whether the hon. Gentleman will hold that view when I have finished. Certainly, the Accounts Commission for Scotland has concerns. It has probably invited him, as it has me, to a reception.
Mr. Home Robertson:
How much will that cost?
Mr. Letwin:
Indeed, we must ask that.
Mr. Michael Moore (Tweeddale, Ettrick and Lauderdale):
Why not pay your own way?
Mr. Letwin:
I have no intention of paying my way into the reception.
We are told that the reception will examine a key theme: the role of public scrutiny and audit under the Scottish Parliament. At least the commission is asking the right question. There is a serious problem but I wonder whether Ministers have seriously considered it. That brings me face to face with the point made by the hon. Member for West Aberdeenshire and Kincardine(Sir R. Smith). The Scottish Parliament will not be spending its own money, apart from what the Prime Minister tells us to regard as the penny rate. Of course, no Government or Parliament has its own money; it is all taxpayers' money, but the Scottish Parliament will not even be spending money that it has raised but money from the United Kingdom that will have been voted by this Parliament. We know a good deal about how human nature reacts in such situations because we can examine the long record of local government.
We all know that local councils--whether controlled by the Conservatives, the Liberal Democrats, or even, dare I say it, Labour--have a long and enviable record of successfully arguing, whenever they find that their inefficiencies prevent them from fulfilling the needs and desires of their local communities, that the cause is lack of cash from central Government. I have not the slightest doubt that all parties in the Scottish Parliament will, if left to their own devices, first resort to the argument that any lack comes not from the inefficiency of the bodies that they administer but from an insufficiency of funds voted by this Parliament to the Scottish Parliament.
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