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Mrs. Beckett: I am afraid not.
Mr. John Bercow (Buckingham): May we please have an urgent debate in Government time on the BBC's compliance--or lack of compliance--with its charter obligations on impartiality? Regrettably, that matter was not covered in the exchanges that followed the Secretary of State's statement earlier this week on the communications White Paper. Does the right hon. Lady not agree that in the light of the twin principles that no organisation should be judge in its own cause, and that it is desirable for the BBC and independent broadcasters to play on a broadly level playing field, such a debate would afford an opportunity for the Secretary of State to explain without delay whether the BBC will in future be accountable to Ofcom, and whether Ofcom will be able to judge it in terms of its accountability?
Mrs. Beckett: From what I heard my right hon. Friend the Secretary of State for Culture, Media and Sport say last week when he announced the communications White Paper, my impression was that those are precisely the issues that the Government are considering. The intention is that broadcasters will have proper duties, and that Ofcom will be the supervisor of those duties. I shall certainly draw the hon. Gentleman's question to my right hon. Friend's attention, but I fear that I shall not be able to offer him any debating opportunities other than those that are likely to arise in the context of discussing the communications White Paper and what may flow it--unless he would like to seek a special debate in Westminster Hall, if he thinks that the subject merits one.
Points of Order
1.31 pm
Mrs. Angela Browning (Tiverton and Honiton): On a point of order, Mr. Speaker. May I, through you, ask the Leader of the House whether she will reconsider her response to my request for a debate next week on the appointment of the electoral commissioners? Section 3 of the Political Parties, Elections and Referendums Act 2000 requires an address to the Crown from the Commons for the appointment of commissioners. Does it not therefore seem highly appropriate that the Commons should address the subject?
Mr. Speaker: Does the Leader of the House wish to comment?
Mrs. Beckett: I was almost about to venture into your territory, Mr. Speaker, by wondering whether that was really a point of order. I take the hon. Lady's point, but I fear that, as she will realise if she recalls what next week's business is, it will not be easy for the House to find time for such a debate--nor, indeed, do I immediately perceive the necessity for one. However, I certainly undertake to draw her remarks to the attention of my right hon. Friend.
Mr. Ian Bruce (South Dorset): On a point of order, Mr. Speaker. You will know that the local transport plans were announced at 11.30 am today. That was when you came into the Chamber, so clearly you will not yet have been asked about a statement so that we could discuss the plans with Ministers. I wish to bring to your attention a problem in my constituency. Since 8 o'clock this morning, the Labour prospective parliamentary candidate has been telling people about the local transport plans; surprisingly enough, the news was not leaked to the press as normally happens in such circumstances. While he was announcing that we would get our road scheme, at 11.30 the county council was told only that the scheme had "provisional" acceptance, and no funding has been announced for the next five years, but only for the five years after that.
Obviously there has been spin without substance, but surely it is a serious matter for you, Mr. Speaker, when Members of Parliament are bypassed and misleading information is given out to our constituents by prospective parliamentary candidates of the party in government.
Mr. Speaker: I shall look into the matter and come back to the hon. Gentleman.
Mr. Eric Forth (Bromley and Chislehurst): On a point of order, Mr. Speaker. You will know that yesterday we had the first use of the ludicrous new voting system that the House has to suffer. Can you clarify for us what procedure you have laid down in case there are spoiled ballot papers? Who will be the scrutineer? Who will determine whether a ballot paper is valid? If there is a dimpled or otherwise dubiously marked ballot paper, who will decide what it means--and will there be any method of appeal, because in close votes those ballots could become extremely important? The House would
appreciate your early guidance on this matter, so that as our pencils hover above the appropriate boxes we will all be very careful.
Mr. David Winnick (Walsall, North): Further to that point of order, Mr. Speaker.
Mr. Speaker: Order, perhaps I may first answer the right hon. Member for Bromley and Chislehurst (Mr. Forth). The hon. Member for Walsall, North (Mr. Winnick) may not then need to raise a point of order.
The right hon. Member for Bromley and Chislehurst always brings important matters before the House and the Chair. I shall look into this one and make a statement next week.
Mr. Winnick: Further to that point of order, Mr. Speaker. As you look into the matter, can you guarantee that it will be dealt with internally and that under no circumstances will you consider asking anyone from Florida to do the checking?
Mr. Speaker: I give the hon. Gentleman that assurance.
Mr. John Bercow (Buckingham): On a point of order, Mr. Speaker. I seek your guidance on a matter that I have had cause to raise before. For the second time in the past 18 months, the Paymaster General has had to sit through fully 60 minutes of Treasury questions without an opportunity to answer any question herself. I am aware from first-hand knowledge that the Minister is frustrated by that state of affairs, which gives at least an impression to Members and the outside world of deliberate sex discrimination. Can we be assured, therefore, that there will be no repetition of that appalling state of affairs?
Mr. Speaker: I can assure the hon. Gentleman that there is no discrimination on my part. He is a regular attender at Question Time and has heard me say before that we should have brief questions and brief replies. Perhaps then we could get to the Paymaster General.
Mr. Christopher Chope (Christchurch): On a point of order, Mr. Speaker. Yesterday, at the Select Committee on Trade and Industry, when a Minister was questioned about the United Kingdom online annual report, the question arose of the availability of that document in written form. It had not been submitted to the Library in written form, and only a summary and a CD-ROM had been placed there. I understand that a Speaker's ruling already exists that any document ordered by a Minister to be placed in the Library must be in a hard copy, and that it is not possible to lay a document before the House in electronic form only. I should be grateful if you investigated the need to extend that ruling to the proceedings of Select Committees and the documents discussed at them. Yesterday, members of the public who attended the Trade and Industry Committee were unable to gain access to the documents that we were using.
Mr. Speaker: I will look into that matter and the status of the document. I hope that that is helpful.
BILL PRESENTED
Tobacco Advertising and Promotion
Mr. Secretary Milburn, supported by The Prime Minister, Mr. Secretary Prescott, Mr. Chancellor of the Exchequer, Mr. Secretary Smith, Mr. Secretary Murphy and Yvette Cooper, presented a Bill to control the advertising and promotion of tobacco products; and for connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow, and to be printed. Explanatory notes to be printed [Bill 6].
Public Accounts
1.37 pm
Mr. David Davis (Haltemprice and Howden): I beg to move,
- That this House takes note of the 39th and 41st Reports of the Committee of Public Accounts of Session 1998-99, of the 1st to 9th and 11th to 37th Reports of Session 1999-2000, and of the Treasury Minutes on these Reports (Cm 4576, 4593, 4656, 4695, 4688, 4732, 4758, 4798, 4822, 4863, 4886 and 4901).
I hold the right hon. Gentleman in great esteem, admiration and affection. He held the post of Chairman for a record 14 years, and given that it is always held by an Opposition Member, the House will understand that my party has no wish that I should challenge that record. He also played a pivotal role in the creation of the National Audit Office in its current form, which is the most important landmark in improving public accountability since Gladstone established the PAC in 1861. The right hon. Gentleman presided over the publication of 600 reports, every one of them unanimous. Those reports have made a significant contribution to better government and service to the taxpayer. Their implementation has saved the taxpayer many billions of pounds.
Above all, the right hon. Gentleman made the Committee what it is today. There have been numerous highlights. The Committee brought to the public's attention a number of significant cases in which public money had not been spent wisely. They include, most famously, the Pergau dam, Wessex regional health authority and the Welsh development agency.
In 1994, under the right hon. Gentleman's stewardship, the Committee produced its seminal 8th report, "The Proper Conduct of Public Business", which examined the standards of conduct in public life and set out the measures needed to uphold the integrity of public servants and to restore confidence in public service. It was a landmark exercise that I have been keen to emulate, drawing out in specific reports the generic lessons arising from the Committee's work on privatisations, the private finance initiative and information technology.
In recent years, the right hon. Gentleman has continued his interest in the work of the Committee and the National Audit Office as chairman of the Public Accounts Commission, which plays a key role in the accountability process, most notably by setting and protecting the NAO's budget.
The right hon. Gentleman has been an unfailing source of good advice to me. He is a man of unusual wisdom and he will be greatly missed. I know that he cannot be here today, but I nevertheless express thanks and gratitude--I hope, on behalf of the whole House--for all that he has done.
In the past year, the Committee has produced 43 reports on matters as diverse as the "Government on the Web" and "Compensating Victims of Violent Crime". Committee members are diligent and thorough. We have lost some valuable members in recent years, to whom I pay tribute. My hon. Friend the Member for South-West Hertfordshire (Mr. Page) made valuable contributions for 11 years. My hon. Friend the Member for Bexhill and Battle (Mr. Wardle) was a highly effective member for four years, and although the tenure of my right hon. Friend the Member for Skipton and Ripon (Mr. Curry) was brief, it was also distinguished.
In the past year, it has given me great pleasure to welcome to the Committee my hon. Friend the Member for Gainsborough (Mr. Leigh), the hon. Members for Eastwood (Mr. Murphy) and for Edinburgh, South (Mr. Griffiths), and my hon. Friends the Members for West Chelmsford (Mr. Burns) and for Westbury (Mr. Faber), who are recent additions.
In particular, I praise the hard work of and the seamless service provided by Mr. Ken Brown, the Committee Clerk, and his team. We all recognise the pressure that they are under and we are grateful for their help and advice.
The Committee is of course uniquely fortunate in enjoying the services of the National Audit Office under the able and experienced command of Sir John Bourn. The NAO serves Parliament well; indeed, its staff are the unsung heroes of the story that I am about to tell.
The Committee has made a real impact. Between them, the NAO and the PAC have generated substantial savings of some £1.3 billion in the past three years--a sum equivalent to an £8 saving for every £1 spent on running the NAO. In the past 12 months alone, we prompted the bodies that the NAO audits to make more than 2,100 significant changes to their systems. That that work is of practical benefit to the Government is evidenced by the fact that more than 90 per cent. of recommendations that the Committee made last year were accepted.
This has not, however, been a record year in terms of numbers of reports. Like all the Committee's failings, that is the fault of the Chairman. On that point, at least, there is always unanimity. In truth, the passage of the Government Resources and Accounts Bill took up much of the Committee's time, my time, and that of the right hon. Member for Swansea, West (Mr. Williams) and the hon. Member for Newbury (Mr. Rendel). That Bill presented an opportunity to bring up to date the Comptroller and Auditor General's powers of audit and access. To do so is a prerequisite if the NAO is to continue to provide Parliament with a quality service in a changing world with many new forms of public service delivery. The Committee's 4th and 9th reports on the Bill set out the arguments for such reform. Key issues remain unresolved, including the CAG's ability to audit companies set up by public bodies such as the New Millennium Experience Company--the dome company--the auditing of all non-departmental bodies and access to contractors.
In our experience, the existing audit arrangements for such bodies have sometimes shown them to be less than satisfactory and occasionally disastrous. The most obvious example is the quality of auditing in further education, about which the Committee is concerned.
The Bill, now the Government Resources and Accounts Act 2000, also gave the Government and the House the opportunity to look to the future and get a grip on new and independent ways in which to measure performance. Performance measures have a great potential to serve as a lever to improve the delivery of public services and to increase for the public the openness and transparency of the Government's efforts on their behalf. However, those measures need to be independently validated and reported to Parliament if the public is to have confidence in them, and if they are to lever up the standards of public service.
The Government did not grasp those opportunities in the context of the 2000 Act. However, it is fair to say that the Chief Secretary understood our concerns and has set up a review of audit and central Government accountability, which is led by Lord Sharman. I hope that that report will put right that problem.
Our remit is wide and covers many subjects, and I shall dwell on three important threads that run through them. First, there is the Committee's role in initiating improvement in Government; secondly, issues arising from our work on regulation this year; and finally, accountability--a high-profile issue at present.
In prompting improvement in Government, the Committee--perforce, for most of its time--focuses on criticising poor performance, but its purpose in so doing is to draw out the lessons that must be learned. That forward-looking approach is exemplified by our first report this year--on information technology--which drew out lessons learned from 25 previous reports spanning about 10 years.
Our report identified common themes; for example, the need to analyse fully the implications of the introduction of new IT systems for all aspects of the business, and the importance of full senior management involvement in championing the successful development of such systems. The Government responded positively to that report; indeed, I understand that it formed the basis of their White Paper. We hope that they will ensure that the lessons that we identified are implemented throughout Whitehall.
Inevitably, many of our reports highlight cases where matters have not gone well--where a body has failed to deliver value for money or has provided poor service to the public or, in some cases, where there has been a combination of the two. One example is the Committee's examination--in its 29th report this year--of the crisis in the Passport Agency in the summer of 1999. At the peak of the crisis, more than 500,000 people were awaiting passports. Many thousands were forced to queue at passport offices, and many more suffered inconvenience and distress because they were unable to find out about the progress of their application. More than 500 people missed their travel dates. That fiasco represented a deplorable departure from the high standards of service that the public have a right to expect.
The crisis was caused by the Passport Agency's over-optimism about the implementation of a new computerised system for processing passports. Although the agency had transferred the risk associated with design and delivery of the new computer system to its private
sector partners, it retained responsibility for ensuring continuity and quality of service. As a result, the agency incurred additional costs of £12.6 million in an effort to maintain services. Only a fraction of that sum--less than £2.5 million--will be recouped from its supplier.Another example of poor risk management in contingency planning was covered in our 7th report--on the immigration and nationality directorate's casework programme. In April 1996, the directorate let a contract for a privately financed business change initiative, which depended heavily on new information technology. The contract was part of an integrated strategy to achieve a better approach to immigration control. Delivery of the IT system to support the programme slipped, leading to severe disruption to the directorate's services and a large increase in the backlog of cases. By June 1999, a backlog of 219,000 cases awaited processing and decision at the directorate. The Committee concluded that to combine a complex IT project with a major reorganisation was always likely to be a risky venture, yet the Home Office contingency plan was seriously flawed.
The Committee was rightly critical of those cases, but used them to make constructive recommendations on the need for adequate contingency plans in key public services--including both the need to plan for substantial loss of capacity and how to handle rapid rises in public demand when user delays become known.
A further area where we have used examples of weakness to make positive recommendations is that of poor project management. In our 6th report--on the Arts Council of England's monitoring of capital projects--the Committee examined 15 major capital projects funded with lottery money by the Arts Council, totalling about £325 million. We noted that the overwhelming majority had not gone according to plan; 13 of the 15 were over budget and more than half were late. The Arts Council had already found it necessary to make supplementary grants of more than £20 million on those projects alone.
The Committee was concerned that the Arts Council did not have the necessary financial and project management expertise, and that there was a need to strengthen its business monitoring function. The Committee concluded that earlier action to strengthen the council's grant assessment and financial skills would have helped to reduce cost and time over-runs in most cases.
I am pleased that the Committee's recommendations have been accepted and acted on. The Department for Culture, Media and Sport tells us that project monitoring and risk management were central to the management of lottery awards and that it is confident that the Arts Council's new, three-stage assessment process minimises the risk of project cost and time over-runs. The Committee will expect that reform to produce better performance.
Perhaps I might conclude this look at where projects have gone wrong by mentioning our 34th report, which examined probably the most costly example of maladministration in the history of the country: the state earnings-related pension scheme and the failure to inform the public about reduced pension rights for widows and widowers. That case represents an abject failure in a Department's legal responsibility to provide accurate and complete information to the citizen.
For 10 years from 1986, the Department of Social Security did not publicise adequately a very significant change, which was introduced in 1986, but not due to come into force until 2000, to the arrangements for the inheritance of the state earnings-related pension. Nor did it ensure that staff provided the public with correct information on that change between 1986 and 1999. As a result, many thousands of people are likely to have made decisions about their future provision based on an incorrect understanding of the pensions that will be inherited by their spouses after their own deaths. There was a systematic failure of administration in the Department and the Benefits Agency, which illustrates the need for a fundamental improvement in their attitudes to customer service.
I welcome the Secretary of State's announcement of 28 November, which addressed a major concern, flagged by the Committee, regarding the redress package announced in March 2000. We were concerned that many of those affected would not hear about the redress scheme and might find it difficult to understand. We were also concerned that those who had already retired would not be able to make alternative arrangements. The cost of remedying that debacle is estimated at some £12 billion.
The fact that the debacle was remedied properly is to the credit of the Secretary of State for Social Security, but I am sure that he was greatly reinforced in his arguments with the Treasury by the fact that the two most heavily armed Select Committees--the Public Administration Committee, which has the weapon of the ombudsman, and the Public Accounts Committee, which has the weapon of the National Audit Office--were both determined that the pensioners should be treated properly. That is a good example of Select Committees changing the balance of power in Whitehall in favour of democracy and in favour of the good of the public.
On health, we have produced important reports about improving delivery. Our 42nd report, on hospital-acquired infection, highlighted that growing problem. The best estimates suggest that there are some 300,000 cases each year in England, causing more than 5,000 deaths. The cost to the national health service may be as much as £1 billion a year. Not all cases are preventable, but a lot are. A 15 per cent. reduction would save many lives, and could save the NHS about £150 million a year.
We encouraged the NHS executive to take a much firmer grip on the extent of that problem through a root and branch shift towards prevention. We also urged the collection of robust, up-to-date data to enable it to identify the scale of the problem. It is pleasing that the Government have taken forward so many of our recommendations. For example, they have launched a new strategy to address the growing problem of anti-microbial resistance. That includes the establishment and maintenance of surveillance systems, strengthening infection control practices and processes in hospital and the community and the promotion of a co-ordinated programme of research and development of new techniques to detect, prevent and treat infection. They have also announced further money--£31 million--to clean up NHS hospitals.
Lack of data is a common theme in our NHS reports. Effective information is essential for good management and effective health care and central to NHS modernisation. The Committee has taken evidence from the NHS on the ways in which it might improve in-patient
admission and bed management procedures. The potential gains to the NHS are enormous. In 1998-99, a record number of people in England--about 5.8 million--were admitted to hospital for at least a night. There is already much good practice in the NHS, but many problems remain. In 1998-99, the operations of 56,000 patients were cancelled at the last minute for non-medical reasons. More than 2 million bed days are lost each year due to delays in discharging people who are fit to leave hospital. That is due to poor management and poor collaboration between NHS agencies, social services departments and other agencies. That costs the NHS £1 million a day, wasting scarce resources that the NHS can ill afford.The Committee has also taken evidence on hip replacements. The National Audit Office found that, in England, the NHS performs more than 30,000 replacements a year at a cost of £140 million. Most patients receiving hip replacements receive an excellent service from the NHS and enjoy an enhanced quality of life after their operation. However, the Comptroller and Auditor General reported that there were significant variations in performance. For example, there are variations in practice between trusts and orthopaedic consultants on a range of issues, such as the purchase of hip prostheses, supervision of surgery, length of patient stay in hospital and follow-up after operations. The Committee believes that the NHS executive should address any inequalities in access to care wherever they arise and should resolve the uncertainties about the clinical effectiveness of the different prostheses used.
A key theme running through the Comptroller and Auditor General's report, which the NHS executive acknowledged in its evidence to the Committee, was again a lack of management information available to NHS trusts and individual consultants. We shall never have cost-effective health care until we solve that problem. Better use of taxpayers' money means more and better health care. That underlines the importance of the steps that the executive is undertaking to improve information and of the successful delivery of the new NHS management and information technology strategy on which the Committee commented in its 13th report.
In July, the Committee produced a ground-breaking 27th report on joined-up working in the criminal justice system. Every year, the criminal courts in England and Wales deal with almost 2 million defendants. The criminal justice process is complex involving several separate organisations, including the police, the Crown Prosecution Service and the courts. Defendants are usually represented by lawyers who are publicly funded from legal aid. Cases may require work by probation officers, the forensic science service, independent experts, professional witnesses, the Prison Service and the prison escort and custody service.
There has been much impetus in recent years for public services to work better together and the criminal justice system is a key area where such a joined-up approach is essential. We recognise that the independence of the various players is fundamental to justice, but that independence is entirely compatible with the various agencies taking joint responsibility for achieving value for money from the substantial public sums that they spend. In short, it is hard to think of an area where it is more important to adopt effective joint working. The old adage, "Justice delayed is justice denied" obviously applies in this case.
However, the Committee found that the criminal justice system is some way from having the information base needed to enable people to work together and to plan and manage the process effectively. That causes endemic delays in the system, which increase costs and undermine public confidence. I am pleased to note that the pilot programmes to expedite criminal cases show that real benefits can be achieved. The wider application of those programmes should be an urgent priority for everyone working in the criminal justice system.
The Committee, as a matter of course, also draws attention to good practice. For example, our 40th report examined National Savings' public-private partnership with Siemens Business Services. In that deal, Siemens--a company that does not always necessarily receive the PAC's plaudits--took over the day-to-day administration of National Savings' products, and that included responsibility for more than 4,000 staff. The remaining 130 staff of National Savings retained responsibility for overall business performance, including the design, management and marketing of products to customers, liaison with Treasury on funding requirements and managing the relationship with Siemens. It is still early days, but we congratulated National Savings on managing the process so well and concluded that the deal offers very good value for the taxpayer.
The Committee's positive response to that innovative project refutes the concern raised in some quarters that accountability to Parliament through the PAC acts as a disincentive to risk taking and innovation. Let me dispel that notion here and now. In my view, innovation is essential for radical improvement in the quality and value of public services. The freedom to innovate must be balanced against responsibility to those providing the funds. In the commercial world senior staff are accountable to their boards and, beyond that, to shareholders. In the public sector, Parliament and the Public Accounts Committee perform that role. The rewards for success are higher in the commercial world, but so are the personal consequences of failure.
My Committee is not against sensible and reasoned risk taking and innovation. We support such moves provided that the risks are managed well and hold out the prospect of a sizeable reward for the taxpayer. We do not criticise projects per se, but are certainly concerned about projects for which the risks were not properly evaluated or were badly managed, and thus led to an unnecessary waste of taxpayers' money. There is a world of difference between the Committee's criticism of public bodies' failure to get a grip, which unfortunately we see all too frequently, and its criticism of their failure to take well thought through risks, which they generally do not do. Too often, Whitehall seems unable to distinguish between risk management and roulette management--the careless gambling of the public's money on ill thought out, weakly managed projects.
Cultural inhibitions provide a much greater barrier to innovation in public service. The civil service culture has long been risk-averse, and the pace of progress made by the public service has been slow. To say that audit scrutiny is a barrier to innovation is a lame excuse, used by those who do not have the vision to see the potential of new approaches or the capacity to manage risk. No one who has appeared before my Committee was able to say that he took a well-judged risk, managed it tightly as
possible, but unfortunately it did not pay off for reasons beyond his control. Should that happen, I would commend, not castigate, such action.The second theme is regulation. Regulators play a key role in ensuring that the rights of the taxpayer are protected, whether through lower prices, greater choice or improved services. Regulators are the only proxies for pressures of competition in parts of vital industries such as power supply, railways and telecommunications. In competitive markets, regulators have a role in protecting the interests of consumers in society by investigating and acting against abusive practices. Sometimes, the regulator's failure to bring about improvements has been due to shortcomings in the original legislation. In such cases, the regulator should seek to strengthen his powers. In other cases, the legislation has provided the regulator with the appropriate firepower, but he has been slow to act or has not moved with the times.
Let me give four examples: the Office of the Rail Regulator, which is dealt with in our report on ensuring that Railtrack maintains and renews the rail network; the Office of Fair Trading, which is covered in our report on protecting the consumer from unfair trading practices; the Gaming Board, which is the subject of our report on better regulation; and the Office of Gas and Electricity Markets, which is addressed in our report on giving customers a choice after the introduction of competition into the domestic gas market.
In August, we published our 35th report on the Office of the Rail Regulator. It was sadly prescient given the fateful accident at Hatfield in the autumn, because we highlighted the sharp rise in broken rails on the network. In 1998, Railtrack forecast that there would be 450 or fewer broken rails in 1999-2000, but in 1998-99 and 1999-2000 it had more than twice that number--937 and 919. Frankly, that is not good enough. Railtrack made a commercial decision not to replace the track, which last year was in a worse condition than when the railways were privatised. The consequence of delays and inconvenience to the travelling public and for safety are now all too apparent.
Some of the problems can be put down to the inadequate powers made available to the regulator on privatisation in 1996, but at the time of our report the regulator had yet to put in place the right tools--notably, amendments to Railtrack's network licence. We called on the Rail Regulator to take action to ensure that the incidence of broken rails were substantially reduced. We recommended that he should set targets for achieving those improvements within the next two years and apply financial penalties against Railtrack if the targets were not met. I am glad to say that the Government accepted the recommendations but, sadly, the incident at Hatfield occurred before they were implemented.
The situation in that sector is a good example of the need to tailor the powers of the regulator to the circumstances of the industry involved. The risk of fatal injury is low on the railways and that will inevitably influence the actions of rail managers, possibly making them complacent. Accidents are infrequent. They seem to happen in groups about every 10 years, but when they occur, the number of casualties can be very high. The regulatory regime should be designed to shape the industry's behaviour to offset such problems.
Our examination of the Office of Fair Trading found that, although the OFT had been hampered by ineffective legislation, it could still do more within its existing powers to protect consumers from rogue traders. Few consumer credit licences are revoked, even though, in some cases, licensed traders have had serious criminal convictions. It is shocking that the OFT has only once applied to the courts for a contract to be revised under the Unfair Terms in Contracts Regulations 1994. The OFT has consistently failed to take opportunities to show traders that it will not tolerate customers being ripped off: it is a watchdog that rarely comes out of its kennel. A more proactive approach would send a powerful message to rogue traders and restore the public's confidence in the role of the regulator.
The Committee's examination of the introduction of competition into the domestic gas market disclosed that low-income customers who use pre-payment meters were relatively disadvantaged. Furthermore, we were astounded to find that, owing to unscrupulous sales techniques, 100,000 customers were switched to a different supplier without their consent. We were especially concerned about the impact of that on the elderly and other potentially vulnerable groups. As in the railway industry, there was a safety concern--in this case, falling standards in tackling uncontrolled gas escapes. Therefore, while welcoming the benefits resulting from gas competition, we urged the regulator to act to remedy the problems that accompanied it.
Sometimes, regulators have been slow to move with the times and, because of wider socio-economic changes, regimes that were once appropriate become no longer relevant. Our 41st report, "The Gaming Board: Better Regulation", is a case in point. It looked at a body that regulates a substantial industry taking in about £11 billion in stake money--a mainstream industry that is largely free of criminal activity and is becoming increasingly sophisticated with the advent of internet banking and internet gaming.
There is a marked difference between now and the era when the Gaming Board was set up in the late 1960s. One of the board's main aims was to purge gaming of criminal activity and ensure that it was fairly and properly conducted. Then, the board monitored the industry through regular visits by inspectors, many of them retired former policemen. Now, however, there is a high level of compliance in the sector: for example, ownership of many casinos is concentrated in a few limited companies with their own audit, security and compliance departments. Yet, until recently, the board's approach and the frequency of inspections had remained largely unchanged.
The Committee concluded that the board's approach was unfocused and wasteful. We recommended that it should rationalise its regulatory procedures to take greater account of industry developments, such as companies' own compliance procedures, and to assess better the success of its activities through appropriate performance measures. The Committee also considered it important that the board should have the appropriate staff mix to reflect today's environment: more staff with backgrounds in information technology and accountancy and perhaps fewer retired policemen.
We have been able to make important recommendations in the regulatory sector because, in most of the sector, the Comptroller and Auditor General
has full access and audit rights. One area of regulation that represents a yawning gap in those rights is that of public housing. The CAG does not audit the Housing Corporation and has no right of access to registered social landlords, formerly housing associations, despite the fact that they will receive more than £800 million this year, rising to £1.2 billion in 2003. The need for effective scrutiny of the sector was clearly demonstrated recently when my Committee discussed the case of fraud at Focus housing association, which was regulated by the Housing Corporation. It took six months of negotiation before the National Audit Office was allowed access to Focus. Such a position is entirely indefensible when such substantial sums of public money are at stake.In summary, the regulatory regime exists to protect consumers and society from unscrupulous practices. Regulators can be entrusted by Parliament with acting in the interests of consumers, and they need to respond quickly and forcefully when problems arise or circumstances change. The Committee has been keen to ensure that they do so, as the ultimate defender of consumer interests.
My third and final theme, accountability, is central to the history of the Committee and its effectiveness. It is at the core of the relationship between Parliament and the Executive. There are long-established and robust traditions that serve to balance the ability of Government to govern against the ability of Parliament to protect the interests of the taxpayer.
A key feature of the Committee's success is the notion of personal accountability to Parliament of the senior official within a Department or agency. It is not by accident that most senior officials in a Department or other body also have the title "accounting officer". Indeed, until 1981, accounting officers were personally liable for expenditure improperly charged to accounts. If that were true now, I suspect that one or two of them might have £100 million mortgages.
The current arrangements involve periodic appearances by senior officials before the Committee. Normally, we call the incumbent accounting officer, who accepts responsibilities for the actions of his or her predecessors. In most instances, this works well. Sometimes, however, it may be appropriate for past accounting officers--those who were in post when key decisions were taken--to be brought back before the Committee. For example, when the Committee examined witnesses about the problems of the Passport Agency in the summer of 1999, the evidence of the former chief executive was of particular importance to us as we sought to understand events leading up to and during the crisis. For that reason, we shall continue to call witnesses whom we consider to be most appropriate in the circumstances of each case. It is a power that we shall use responsibly, but it is one that should not be open to question.
A particular feature of the special relationship between accounting officers and Parliament is the need for officers to defend their actions to the Committee. There are a few occasions each year when accounting officers consider that they have been asked to take action that they could not defend to the Committee, on grounds of either propriety or value for money. Clear procedures exist for the accounting officer to request a written direction from his or her Minister to take such action. These directions are automatically notified to the Comptroller and Auditor General, who considers the issues and advises the
Committee as he thinks fit. Automatic notification where directions were sought on the ground of value for money was a further innovation of my predecessor, as Chairman of the Committee. It was introduced following the then Committee's examination of the Pergau dam case in 1994.Our recent investigation into the millennium dome is a classic example of the importance of accounting officers using the automatic notification process. Twice, the accounting officer of the Millennium Commission sought and received directions from the chairman of the commission to make additional grants to the New Millennium Experience Company. The process ensured that the procedure was brought to the attention of Parliament, and the CAG launched an investigation. Knowledge of the directions assisted our understanding of the matter when we took evidence on the CAG's report. We have not yet concluded our deliberations on the issue.
Openness between Parliament and the Executive is a further essential--
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