Examination of Witness (Questions 20 -
35)
TUESDAY 25 JANUARY 2000
RT HON
DAVID DAVIS
20. We are also in the process of modernisation.
Would it not help that process if local authorities were represented
on the select committee? Would that not reflect a desire that
this Government and others have to involve a wider range of bodies
in that sort of work? Would it not mean that local authorities
(who, after all, have the best knowledge of the Audit Commission)
could play a role and would be able to challenge the Audit Commission
perhaps in a way that Members of Parliament could not?
(Mr Davis) I am agnostic on that. There are two points:
one is that I am a great believer in the supremacy of Parliament,
the sovereignty of Parliament, and that in my judgment is the
most important component of this, that this would actually make
Parliament work. I do not know how you pick them, but it would
not worry me if you had on a select committee of that sort two
or three people from local government who would bring some expert
input and so on. That would not be a problem for me in these terms.
The dominant aspect is parliamentary. At the end of the day, coming
back to the issues we are talking about, law and order, health,
education and transport, there are two loops in this: one is the
local loop feedback where you are looking at how it is delivered,
what can you do to alter it, what can you do to change it; but
then you very often find that what can be done locally is constrained
by national legislation, or national resourcing for that matter,
and those are parliamentary issues. I have no problem with having
a small number of people like that on it. That would be a matter
for House authorities and the committee itself to decide. What
is more important is that we close the feedback loop; that we
make sure all those audit reports (of which there will be a proliferation)
actually lead to an improvement in public service delivery. That
is what the next century of politics is going to be about. It
is going to be about public service delivery and doing that on,
frankly, a rationed taxpayer pound.
Mr Benn
21. Is your suggestion of an Audit Commission
PAC in effect a criticism of the existing select committee structure,
that it is not picking up issues which the reports you referred
to identified?
(Mr Davis) The Chairman at least, and probably others,
will be aware I take the view that the current select committee
system, not because of the individuals on it because they are
all very dedicated people, but the actual structure we have of
financial scrutiny in this House is a disgrace. That is the word
I would use, and I would not pick anything milder than that. It
is obsolete. Governments over the decades of all parties have
allowed the Executive to disable the House of Commons scrutiny
process over expenditure. This is now the obverse side of that.
Now we have an opportunity, and we are not going to forget expenditure,
but as we change the emphasis from just expenditure control to
expenditure and public service delivery there is an opportunity
for the select committees of this House to take a different role.
22. How would you make sure if this new committee
were established that at the right stage it handed over responsibility
for the policy issues to the select committees and did not, in
effect, take on the work perhaps you feel select committees ought
to be doing?
(Mr Davis) They do it when it is at a national level.
Let us take the Pergau Dam, as I understand it, and I was not
chairman at the time. The Pergau Dam scandal come up; it was discovered
by the NAO/PAC. I suspect what happened at that point the chairman
thought the PAC does not deal in policy and this body should not
really deal in policy, it should deal in delivery; therefore this
is now a policy matter—this clearly arose from policy decisions
by ministers—and that is a point they have to hand on. The
thing with the PAC is that it has 130 years of convention behind
it which have some force. You have to invent the same conventions
for just the job.
23. You mentioned in your opening remarks your
views on the independence of the Audit Commission. Do you think
it is sufficiently independent of the Executive, bearing in mind
the role it will now be taking on in inspecting Best Value, which
may in turn lead to a decision being taken that if services are
not up to scratch then they should be out-sourced? Do you think
from a local government perspective the Audit Commission will
be seen more as an arm of central government?
(Mr Davis) There is a risk of that, and it is compounded
by the fact that half the money for Best Value is going to come
from the DETR or from central government. I would actually look
to put the funding on the same basis as the NAO—direct parliamentary
provided funding if we went the route I was describing. I think
that would actually meet some of the concerns. I have not thought
this component through—maybe the point Mr Brake, Mr Olner
and Mrs Ellman were making about involving local government in
this theoretical committee would help deal with the fear on the
part of local government that they had a Gestapo from Whitehall
being imposed on them. It might help. I had not thought through
the psychological dynamic.
24. Do I take it from your opening remarks that
you are generally satisfied about the degree of joint working
between the Audit Commission and the NAO?
(Mr Davis) I am going to say, "Yes", slowly.
When I was giving you the examples of the joint projects I glanced
back, and I was of the opinion there had been one a year. There
was a housing benefit fraud in 1997/99, and a trading standards
office one in December 1999, and the previous one, on the probation
service, was back in 1989 and we are going to have one a year
in future. Yes, co-operation is good but we have not had quite
as much as I had expected of joint ventures. Those joints reports
are the highest quality of all.
25. Given that local authorities are going to
interpret their approach to Best Value in different ways in terms
of how they have packaged together services, do you think that
the Audit Commission's audit structure is sufficiently flexible
to accommodate the different ways in which local authorities may
approach Best Value?
(Mr Davis) The answer to that is, I think so. Local
authorities are not going to be completely free to do everything
they want to. The framework of the law is quite constrained, but
I think so. I think local authorities are going to get a lot of
help from the Audit Commission in that respect and look to them
as experts, I suspect.
Mrs Ellman
26. You spoke about what you call the increasing
amount of scrutiny in delivery of local services. We have a large
number of inspectorates in local government, is that right, or
should there be fewer?
(Mr Davis) I think it is probably all right. I am
conscious that people worry about the proliferating number of
inspectorates, but there is a second reason I did not mention,
when I was talking to Mr Brake, apart from the public service
delivery component. The other aspect which concerns me slightly—not
because I disapprove of it, I do approve of it—with the
preponderance these days of more contracting out of public service,
I think the requirement for inspectorate goes up and not down.
Just as when we privatised the railways we got the other organisations,
Telecom got Oftel, and Ofgem now with gas and electricity, I think
that oversight requirement is quite important because, apart from
anything else, it keeps a pressure on the local authorities themselves,
not just for cost reduction but also high quality of service delivery.
I am not going to back off on this one I think they are necessary.
Chairman
27. Why do you need an "Ofcouncil"
rather than the local electorate?
(Mr Davis) By observing the results so far. Look at
education—I just leave that in the air; it has not delivered
and I think OFSTED is helping in that process. The fact of the
matter is, coming back to an ordinary local elector, we all have
the experience as Members of Parliament of being written to in
our role in local government (which does not exist now) so we
know the level of understanding sometimes exists in the population
at large about who delivers what. Why should an ordinary citizen
know precisely which tier of local government or which tier of
national government delivers education? They might reasonably
think, since we deal with most of it, in national terms that Mr
Blunkett delivers education—and it is not, it is locally
delivered. I think quite a lot of these measures require serious
enforcement. I also think frankly, from the public democracy point
of view, the actual validated delivery of public performance figures
enhances local democracy. Let me give you a precise example. Over
the last decade, or a bit less, there has been a lot of information
produced about police service performance. 50 per cent. of it
has been pure rubbish because of the behaviour of some police
officers, police chief constables, in using the systems and changing
the systems to give the outcome they want. For example, the secondary
clear-up rates where some policemen go to prison and say to the
prisoners, "If you volunteer 13 more cases ...." The
public cannot make judgements on data which is that unreliable.
The public deserves a better, more reliable set of information.
It does not matter whether it is policing, local education, health
or the other services that local government provide, they deserve
robust measures they can understand and they can rely on and this
will need enforcement.
Mrs Ellman
28. Does the same degree of scrutiny in inspection
apply to central government services?
(Mr Davis) I am in danger of getting into controversy.
We are having an argument on the Resource Accounting Bill at this
very moment. My view is that it is not and it ought to be. That
is strictly my view and not a PAC view.
29. Whose responsibility should it be?
(Mr Davis) It might be Parliament through the Comptroller
and Auditor General, through the NAO; Parliament through its own
mechanism, the NAO. One of the other aspects of the original Labour
Party manifesto commitment I thought was admirable, which has
not yet been delivered, is the independence of the Office of National
Statistics. There was a commitment and a promise in the Labour
manifesto on that. I do not think it has been delivered. I think
if that was delivered that would be another good way of keeping
central government on the straight and narrow.
30. In general terms you do not believe that
scrutiny being demanded of local government is being applied to
central government?
(Mr Davis) Not yet, no. I think it will. I think that
is the next great argument in this Place.
31. Do you think the Audit Commission uses its
powers to look at the impact of central government policies on
local government?
(Mr Davis) I do not know the answer to that.
Mr Brake
32. You have already mentioned that in your
view perhaps the Audit Commission does not follow up as well as
the NAO does. Are there any other areas where you can see the
Audit Commission could learn from the NAO, or perhaps vice versa?
(Mr Davis) Chairman, if you will forgive me that is
a slight mistake in what I said. What I said was the structure
with the PAC following up on what the NAO does we get a more robust
follow-up. I would not want in any sense that to be seen as the
NAO doing a better job than the Audit Commission. That is not
my view in this respect. They both do a very good job. The point
I was making is that the Audit Commission presents its case to
the public and the DETR, a single ministry in Whitehall. The nature
of Whitehall, the nature of the Executive is that it does not
get the follow-up. I am sorry, I have lost the original question.
33. The original question was whether the NAO
and the Audit Commission can learn things from each other in terms
of best practice?
(Mr Davis) They can and do. We have a Public Audit
Forum, created in 1998, partly for that purpose. The Audit Commission
do a pretty good job of consultation before they start down a
new policy route. They talk to all their stakeholder; they also
talk to the National Audit Office.
34. Do you have any concrete examples of the
various ways the Audit Commission is doing a good job and the
NAO could learn from that or vice versa?
(Mr Davis) Had I so I would have already spoken to
the NAO about it.
Chairman
35. On that note, can I thank you very much
for your evidence, I think it has got our inquiry off to a very
good start.
(Mr Davis) Thank you, Chairman. It has been fun to
be the other side of the trestle for a change.
|
