Select Committee on International Development Minutes of Evidence

Memorandum submitted by the Rt Hon Clare Short MP, Secretary of State for International Development

  During the hearing on the White Paper on 29 January, I promised to follow-up some of the issues raised. I therefore enclose:

    —  a note from the Department of Health on the National Health Service procedures for recruiting staff from developing countries (Q22);

    —  a note on auditing accountancy firms working in developing countries (Q28); and

    —  a copy of my letter to the Speaker on why the White Paper was launched before copies were made available to the House (Q39) (Not printed).

  We are also in touch with the Treasury for an update on the UN Commission looking into the Tobin Tax, in response to Mr Colman's question (Q30). We will write to the Committee on this issue as soon as possible.


  The NHS is also extremely concerned about the potential for recruiting from developing countries. Guidance issued in November 1999 clearly states:

    "It is essential that all NHS employers ensure that they do not actively recruit from developing countries who are experiencing shortages of their own. The only provisos to this policy are if: nurses or midwives from these countries are seeking development by the relevant Governmental authorities in the country concerned."

  The above is specifically intended for NHS employers who have established mutually beneficial links to developing country healthcare systems.

  NHS Trusts should not be actively recruiting from developing countries and certainly there is no known recruitment from the Caribbean. This position will be reinforced throughout England by the newly appointed Director of International Recruitment, whose job it is to oversee and co-ordinate all recruitment activity involving medical and dental staff, nurses and midwives, and allied health professionals. Furthermore, a section will be specifically included in the Code of Practice which will be published shortly.

  Naturally, healthcare professionals around the world have the absolute right to apply as individuals to any vacant NHS post for which they are qualified. The NHS already responds appropriately to these applications and the process is currently being streamlined in discussion with NHS Careers.


  The global accountancy firms have had a lot of adverse criticism in recent times. Some of this has been linked to the standards of accounting and audit carried out by national subsidiaries, and the supervision by the centre of firms using their marque around the world.

  It is much more difficult to draw a causal link between this and the Asian financial crisis. The lack of consistent standards for accounting and audit are not the major cause of such crises, they are contributuory and, once a crisis hits, certainly make it harder to see what is going on. There is a view that some quite sophisticated economies with well-developed professions were let down by poor standards (eg Malaysia and Hong Kong), quite apart from those with weaker professions (eg Thailand and Malaysia).

  The Big 5 have accepted quite a lot of the analysis which followed the crisis (undertaken by the World Bank and others) and are taking action to improve standards generally, and—in a related but separate initiative—to develop global accounting standards. This has led to the strengthening of institutional mechanisms such as the International Federation of Accounting Companies (IFAC), the Forum of Firms, and the International Accounting Standards Committee. The DTI has been strongly supportive of these initiatives, not least because of their relevance to the situation in other European countries.

  From DFID's point of view, with the focus of our work in developing countries, there are two areas of concern: professional capacity and professional regulation. The first is well understood (numbers, qualifications, opportunities etc). The second derives from the fact that in this global industry shake-up, the regulation and determination of standards is slipping from the professions and their associations (of accountants and auditors) and from governments, to the Big 5 themselves. The problem is that, especially for Least Developed Countries, there are not many prepared to fund the sorts of programmes needed to improve standards and achieve some global harmonisation of standards well above the lowest common denominator level. We will look into these issues further with the DTI.

Rt Hon Clare Short MP
Secretary of State for International Development

February 2001

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