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Mr. Letwin: I rarely disagree with my hon. Friend, and I certainly agree with him that the tension he describes is natural; but why does he think it proper?
Mr. Swayne: Perhaps at this early hour I have been rather looser in my use of language than I would otherwise have been. I suppose that it is proper in the sense that it is to be expected and natural that officials or Ministers who are discharging their responsibilities will seek to avoid new, novel and onerous requirements on them and on their Department. I used the term "proper" in the sense that it is understandable, rather than in the sense of probity. I apologise for that lapse in my use of language.
What is entirely proper is the motive behind the new clause. I have said that I understand the Minister seeking to resist the onerous requirements, but those requirements are what the Bill is all about. There is little point in having such a Bill unless we place such requirements on Departments. It is summed up in the first sentence of recommendation (xxiii) of the ninth PAC report, which says:
Which Department would wish to place itself under such scrutiny? The logical conclusion is that the way in which the Department achieves value for money, or fails to achieve it, will be the basis on which Parliament--which funds it--will apply constraints and conditions to any future funding. That is an entirely understandable point of view for us, but an unwelcome point of view for those who discharge those responsibilities.
As was clear in the debates in Committee, which were quoted by my hon. Friend the Member for West Dorset, the Minister's principal argument against the new clause is that it would be administratively inconvenient. Of course it would. Her argument was that nursery schools would not welcome the attention of the CAG. She is right. I thought that my hon. Friend was somewhat unfair to her in being surprised at such a state of affairs. Of course it is inconvenient. Anyone who has been subjected to an audit of any sort finds that it is thoroughly, fiendishly and excruciatingly inconvenient.
That inconvenience is born of the current accounting practice, which is merely to establish a fair view of the financial reports. Ensuring that value for money has been achieved is a much more discerning audit. The order of inconvenience is multiplied as a consequence of the introduction of resource accounting, but either we accept that resource accounting is a proper way in which to understand the undertakings and expenditure of a Department and the way in which it discharges its responsibilities, or we do not.
Mr. Clifton-Brown:
I am following my hon. Friend's argument carefully. He referred to nursery schools, but,
Mr. Swayne:
My hon. Friend is entirely right. The whole purpose of introducing resource accounting is to enable us better to understand those operations, so that we might better establish the best ways of achieving value for money. As my hon. Friend the Member for West Dorset said, the Government have much to gain by showing us so transparently what they have done well, and what they have learned--as revealed in the process of scrutiny--from that which they have done badly.
If I were in the position of a Department's senior civil servants, who quite rightly look to Ministers to protect their interests, I would be very disinclined to embrace resource accounting with open arms because of the commitment levels that would be imposed on me. I therefore conclude as I began, by saying that there is a perfectly understandable tension between Opposition Members who support new clause 4 and Labour Members who seek to resist it. Nevertheless, the arguments advanced against new clause 4 are arguments against the Bill itself. The Bill is of little value without the new clause.
Mr. Fabricant:
Let us remind ourselves again what resource accounting is all about. [Hon. Members: "Oh, please."] Let us do that. The point of resource accounting is to emulate what goes on in the real world, not in the Treasury's pretend and fantasy world. Resource accounts include three statements, emulating the type of statements that are issued by chartered accountants in performing a company's statutory audit. There is the operating cost statement, which is equivalent to the profit and loss account, the balance sheet and the cash flow statement.
Mr. Letwin:
I simply wonder whether--now that my hon. Friend seems to have woken up Labour Members, which is much to be welcomed--he will join me in hoping that they might actually contribute to the debate, so that we might hear whether, as we suspect, they entirely agree with our arguments?
Mr. Fabricant:
My hon. Friend is always optimistic in such matters. The only contributions that we have so far had from Labour Members are snoring, baying, laughter and walk-outs by Ministers and walk-ins by Ministers. There has been great drama, but no interventions. Nevertheless, I hope that something like that might happen.
Three analyses are produced in resource accounting: the equivalent of the profit and loss account, the balance sheet and the cash flow statement. [Interruption.] Someone has woken up, which is very reassuring.
In the real world, the value of a company's stocks and shares is another measurement of its performance. If the company is not performing well, its share value will decline. If it is performing well, its share value will increase. A target is set externally for the company. Even Labour Members--who operate with their BT shares,
which they bought because of a privatisation by a Conservative Government in the 1980s--should be able to appreciate that fact.
Labour Members, however, do not appreciate that it is necessary to establish targets. Companies set themselves internal targets against which they can measure themselves. However, it is doubly important that the Government should set themselves targets, as Departments and Government agencies cannot be valued in the market. There is no share value in the Government that could increase or decrease as appropriate.
Mr. Clifton-Brown:
Before my hon. Friend moves off the principles of resource accounting as they relate to new clause 4, will he comment on the introduction in appropriation accounts of a proper statement of assets for each Department, and on how, in new clause 4, such a statement of assets could be usefully applied in relation to the performance or use of those assets?
Mr. Fabricant:
My hon. Friend raises an interesting point. The previous Government initiated the production of what was colloquially called the Domesday book. That was strengthened by this Government. "The National Asset Register"--I have a copy here--lists all the assets owned by the Government. However, it is no good just owning assets. It is more important to determine whether they are giving a return on the national investment. As an aside, it is interesting that the Department for Culture, Media and Sport, which nominally owns assets such as Trafalgar square, had great difficulty in determining a rate of return on them.
Mr. Fabricant:
And indeed on Nelson's column and Nelson himself.
There has to be a measure of performance. I find it strange that Conservative Members have been surprised that the Government do not welcome the new clause. To me the reason is obvious. The Government are king of one thing only--spin. People are beginning to see through that.
Mr. Deputy Speaker (Mr. Michael J. Martin):
The one thing that I am beginning to see is that the hon. Gentleman is straying from the new clause. He must get back to it. I cannot tolerate him talking about the Government's record on spin, because it has nothing to do with the amendment.
Mr. Fabricant:
Thank you, Mr. Deputy Speaker. I shall move away from spin and back to performance, which is the opposite of spin.
Mr. Letwin:
I would not want something that was not strictly accurate to go into Hansard. My hon. Friend correctly mentioned that the Department for Culture, Media and Sport holds historic assets. It is specifically stated on page 314 of the so-called Domesday book that no valuation for heritage assets has been included in the accounts. It turned out to be too difficult.
Mr. Fabricant:
One might think that that is because the Department for Culture, Media and Sport, and
Mr. Clifton-Brown:
Does my hon. Friend have an idea of what written down value the dome might have?
We are disappointed to see broken the link between resources used and performance achieved, as originally intended under resource accounting.
What will be the point of having resource accounting if that link is broken and such scrutiny is not applied to Departments? It seems to defeat the purpose. The Bill is not much of a Bill without the new clause, which seeks to restore that link.
5.30 am
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