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Mr. Clifton-Brown: Does my hon. Friend agree that there is often a shortcoming with internal auditors because all that they are required to do is give a true and fair view of the situation? They are not required to account for value for money, let alone performance indicators, so Parliament and the general public would benefit enormously if the CAG had the powers proposed in the new clause.
Mr. Letwin: My hon. Friend is absolutely right; that is the point. The very people who employ and unemploy the internal auditors will never give them the task, much less the opportunity, of unearthing real problems of performance management. On the contrary, they will always give the instruction, "Please do not cause too much embarrassment on this front. It is bad enough that you have to tell us the truth about our accounting. We may be able to fuzz up the definitions if those nasty people in Parliament force us to have independent definitions on the accounting side, but you have to tell us the truth. However, be sure that you do not collect too much of this performance stuff. At least we can make sure that only the bits that suit us ever get out."
The problem is that that is counter-productive for Governments of any party because a Government cannot expect to put right those things that they would like to put right--against their own policies--if they do not know that they are getting them wrong because their systems have been so designed that nobody knows that they are getting them wrong. That is the situation we face. It is so acute that it has led, by a strange process of intellectual osmosis, to two incoherent arguments being adduced in consecutive columns of Hansard by the Economic Secretary to defend a proposition that can be defended only incoherently because it is an incoherent proposition.
The time has come for Ministers to ditch this stuff. The Economic Secretary should take from her folder whatever has been written of a similar sort for her to say tonight, put it to one side, think of herself in the light that she is in as a Minister of the Crown trying to defend the Government's integrity and their relationship to our Parliament, and come out and say what is true: although the new clause's drafting may or may not be perfect, we all have a common interest in accepting the burden within.
If she does that, she will earn the plaudits of those of us who are unfortunate enough to be here at 4.52 in the morning.
Much more importantly, the Economic Secretary may save the Government, of whom she is a prime representative, from great defects and failures, even in the next little while. She would gain also the plaudits of her ministerial colleagues. As we approach the witching hour, I have every confidence that she will indeed do just that and make our lives much more pleasant.
Mr. Edward Davey:
Members on both sides of the House will admire the hon. Member for West Dorset (Mr. Letwin) for managing to crack a few jokes at this time in the morning. However, although he has kept a few of us amused, he was too hard on the Government. I share many of his concerns, but we have been considering new ways of using performance indicators, targets and measures of success in British government for over a decade under what is often called new public sector management. The Conservative Government tried to develop those measures through initiatives such as the citizens charter, but I must remind the hon. Gentleman that they did so haphazardly, and did not subject any of the charter measures to external validation or independent scrutiny. His own party is culpable in that regard.
Mr. Davey:
I am grateful for the hon. Gentleman's assent. We need to say, in a spirit of cross-party consensus, that the measures have been developed piecemeal in different Departments and agencies and in local government, and are a mishmash. What we therefore need is coherence in the setting of criteria, and a framework to achieve a logical, rational system. Validation will be a key component of that, but the Government need to do much more to ensure that we have a sensible system for measuring the success of their activities.
As I am sure the hon. Member for West Dorset is aware, the Government have been active in that field, with the publication of public service agreements and the output and performance analysis, both of which are integral to resource accounting and budgeting. They have produced a plethora of targets--indeed, I am sure that the hon. Gentleman shares my experience of reading Government documents and quickly becoming bewildered by the huge number of targets and measures that Departments are supposed to meet.
Crucially with respect to the Bill, Departments often have to meet those targets to get their budgets. It is the link between the performance measures and the budgets that makes the issue so crucial, because if the budgets are to be audited properly and accounted for, and there are performance measures on which those budgets depend, the performance measures ought logically to be audited too.
The Government need to stand back a little. I hope that in the review, which the Chief Secretary has talked about with the right hon. Member for Haltemprice and Howden (Mr. Davis), the Chairman of the Public Accounts Committee, the Government will make it one of their objectives to get a handle on this growing monster in Whitehall so that we can achieve greater coherence.
I am sure that the hon. Member for West Dorset is aware that bizarre targets and performance measures are being set. They might seem to make sense in the Department in which they are drafted, but when they come to the House in a public document, they seem to be completely unwieldy and do not relate to our constituents' priorities.
I shall give one example of a target set for the Forestry Commission, which is obliged, inter alia, to
The Government need to achieve coherence in their approach. I do not underestimate the size of that task--it is daunting--but they need to do it none the less. If they can achieve that, validation will be the corollary. I made these points in Committee. That task sits neatly with the Government's programme for modernising public services; indeed, it is totally in line with what the Government tell us they want to do.
I share the hon. Gentleman's puzzlement about why the Government seem reluctant to pursue that issue. It may, as the right hon. Member for Haltemprice and Howden said, be a matter of timing--but, if it is, let the Government say so. They should say that they will consider the issue and firmly commit themselves to introducing external validation for the measures in two or three years' time.
As I understand the right hon. Gentleman's new clause and the way in which he is allowing validation to be rolled out, the proposal would allow the Government to take up external validation as they get a better handle on output measures.
The Government should welcome our comments, which are intended to help them to meet their aims. Some commentators suggest that the Government's reluctance stems from concern about the press that they might get if they had a set of targets that were externally and independently validated and did not meet them. It is said by others--not by me, of course--that if such a situation arose, the Government could be blown off target. The hon. Member for West Dorset said that a dislike of independent audit of performance was almost inherent in the civil service culture. Perhaps one could say the same of Ministers.
Mr. Letwin:
As usual, the hon. Gentleman is expounding his arguments with great clarity. Does he agree that everybody, not just Whitehall or Ministers, is in that position, and that if utilities could set their own targets instead of having them set by regulators, they would probably find it more convenient?
Mr. Davey:
Indeed. That is why shareholders in private sector companies have demanded that the performance reviews and the customer service analysis which many modern private sector companies undertake are independently audited. Best practice in the private sector
In debates such as this, a parallel is often drawn between the Government's proposals and the experience of other countries that have gone down the same road. My favourite is New Zealand. When New Zealand introduced outcomes and output measures alongside the introduction of accruals accounting, it ensured that an independent neutral body oversaw the setting of those measures. The task was given to the state services commission.
Once again, the Government are borrowing partially from the lessons of New Zealand and Australia, but they are not taking the full text. It is unfortunate to see the Government taking the aspect that suits them while leaving those that would probably suit outside commentators and the Opposition. Their pick-and-mix approach to reforms elsewhere is not good enough. It goes against all the rhetoric of modernisation, which is to be regretted.
improve the benefits provided by Forest Holidays through a public/private partnership to refurbish the four existing cabin sites by 31 March 2000 and build two new sites by 31 March 2002.
That is an interesting target for a body to meet, but it would not correspond with criteria and a coherent framework for output measures. That is the key point that the Government have to grasp.
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