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Mr. Bacon: I was interested in what the Financial Secretary said about the NAO being responsible to Parliament. According to the front page of the NAO's website, the NAO is totally independent of Government, and reports to Parliament. I therefore find it odd that the web address is "nao.gov.uk". That may seem a small point, but would not "nao.parliament.uk" make more sense? Will the Financial Secretary suggest the change to the CAG?
Mr. Boateng: That is an interesting point. Given the NAO's independence and its accountability to Parliament, I am not sure that it is for me to make the suggestion, but no doubt the NAO will take account of it. I must confess that I have not looked at the website; I must do so. The hon. Gentleman's point is perfectly reasonable, and will appeal to the techies and anoraks among us—not that I disparage in any way the hon. Gentleman's close attention to the details of websites.
The challenge is to ensure that the public recognise the impact of the work of the NAO and the Committee on the minds of public servants and Ministers.
We have had an interesting insight—I look forward to more—from the hon. Member for Tatton, who at the tender age of 24 had such wisdom and insight into the ways of the world that he was able to be a special adviser to a Conservative Minister. That may explain rather a lot, but he gave an insight from a political adviser's perspective of how the anticipation of an appearance before the Committee concentrated the minds of senior civil servants wonderfully. As a Minister with a rather different perspective, I share his view that the anticipation of an appearance does just that. Importantly, it gives the Department and Ministers an opportunity to think again and where necessary to make changes when it is clear that things are not going as they should.
References have been made to the probation service and to information technology. I was prisons Minister in the latter part of that period. I well recall that, in some
ways, the Committee's work and the NAO report came as a great relief, because they broke what had tended to become a rather internalised cycle of denial at the Department: that things were not as bad as some outside who had to do the work on the ground—probation officers—said it was. The NAO report and the work of the Committee played an enormously important part in ensuring that the changes were made that now enable us to deliver to the probation service the sort of IT back-up that it needs. It is important that we help the public to understand that, and I put on the record my gratitude as a Minister for the work that the Committee does.I commend the way in which the Committee comes back to check on progress in various areas where it has had concerns. That was particularly important in relation to the 13th report, entitled "The Refinancing of the Fazakerley PFI Prison Contract", in which I had particular reason to be interested as prisons Minister. I am a great believer—I make no apology for it, although I know that this view is not held by everyone—in the role that the private sector can play in the delivery of effective and humane prison services. The Committee's concern over the refinancing operation contributed to the drawing up of guidance for a more equal sharing of the gains of refinancing between the public and the private sector partners. That was to the benefit of the sort of partnership between the public and private sectors that we want.
It was recognised that a problem needed addressing. It was addressed, and as a result the credibility of those partnerships has been enhanced. That was because the Committee worked in the way that it did. Its work and the public accountability that it enhances are rightly admired across the world. Indeed, that has been reflected in the speeches this afternoon.
The role of accounting officer is pivotal to our structure of accountability and ensures that the head of each organisational hierarchy is personally accountable for its activities. This year, a number of officers have appeared before the Committee on a variety of issues. The Committee's reports have helped accounting officers to identify failings and gaps in departmental control systems. That is important, and it acts as a continuing driver for improvement. We must ensure that we learn the lessons of the past and improve the way in which the Government do business.
For example, recommendations from the Committee have contributed significantly to changes in procurement practice and guidance. Those hon. Members of all parties who spoke about procurement and its importance were absolutely spot on. I know that procurement is of particular interest to the hon. Member for South Norfolk. I agree with him that, when we look back at the past decade or so, it will be clear that Governments have had to improve their procurement strategies. It has been a learning process, and the Committee has contributed to that.
Several hon. Members referred to procurement in relation to the private finance initiative. I believe that the PFI has a real role to play, but I suspect—in fact I know—that my hon. Friend the Member for City of Durham is more sceptical. However, it is clear that the number of NHS beds that is delivered is entirely unrelated to the method of procurement. Whatever form of decision is taken with regard to the delivery of a new hospital or
facility, it is clear that there has always been a debate and a tension about the number of beds that should be provided.That calculation can be got wrong under the PFI, but also under the old methods by which public investment was delivered. The important thing is to improve the procurement process, as a robust analysis will ensure that what is needed is delivered. We are still on a learning curve, but I am happy to say that the Government are getting better at procurement. That will benefit the public, and is likely to lead to the achievement of even greater value for money.
Mr. Bacon: The Financial Secretary spoke of the robust analysis of PFI projects. In the December 2000 debate, the right hon. Member for Swansea, West (Mr. Williams) said that he was in favour of mortgaging assets in certain circumstances. He said that that had enabled many people to own their homes who otherwise would not have been able to. However, does the Financial Secretary agree that, when complex financial engineering is involved, a robust analysis must ensure that matters such as the discount rate are chosen correctly? For example, the Treasury is about to reoccupy a building that has been refurbished. The discount rate for that project was ludicrously high at 6 per cent. That had a fundamental effect on the apparent public sector comparator.
Mr. Boateng: I am afraid that I am unable to agree with the hon. Gentleman. I fear that he may have shattered the happy mood of consensus that we were seeking to develop in the debate. However, there will always be a discussion, both post and ad hoc, about whether one has got it right. Time will tell. I think that the new Treasury building is great value for money. If the hon. Gentleman comes along to the opening, he will see for himself. Indeed, the whole Committee should come, but I fear that the fare will be much too simple for the hon. Member for Tatton.
I should like to say a few words about resource accounting and budgeting. In December 2000, following the commencement of the Government Resources and Accounts Act 2000, the system of planning, controlling, monitoring and accounting public expenditure has moved on to a resource basis. That was the basis of some of the discussion when the Committee visited us in the Treasury building.
From the outset, the Committee has supported and encouraged the more commercial approach brought about by the implementation of RAB, acknowledging that it should lead to improvements in the clarity and quality of financial information available to Parliament and assist with departmental management. As we reach the end of this financial year, we are seeing an increase in the number of ways in which the benefits of RAB are starting to be realised. In particular, improvements have been seen in departmental asset management, including disposals of surplus items—a massive task that would never have been achieved without the requirements of RAB, including the need to account for assets held.
Resource budgeting is being expanded for the coming spending review—SR2002—representing a step change in the management of some £240 billion of Government-
owned assets, better incentives for managers at all levels and a better measure of the full cost of providing public services.
Mr. Rendel: Since the Minister has got on to the subject of disposing of assets, I wonder whether he knows whether the Passport Office has yet disposed of the 300 umbrellas that it purchased to protect those who were having to wait outside in long queues. When we asked why it was keeping them, the reply was, "You never know, there might one day be a power cut and everyone would have to go outside and wait in the rain—if there happened to be a storm at the same time as a power cut." That seemed a slightly dubious reason for keeping the umbrellas.
Mr. Boateng: I must admit that the fate of the immigration and nationality directorate's umbrellas has not been brought to my attention. However, I promise to write to the hon. Gentleman about it—even as I speak, urgent inquiries are doubtless being made as to their whereabouts. I was in an office on the opposite side of the road at the time, and I recall that they came in very handy. One hopes and believes that they will never be needed again for that purpose, but who knows? In the scenario painted by the hon. Gentleman, they might be. We will certainly write to him about that.
There is more to do in taking resource budgeting forward. It will place the UK among world leaders in public finance reform. There is a great deal of interest, not least among our European partners, in the progress that we are making in this area. I want to pay tribute to the permanent secretary and Treasury staff who have been engaged in this process, and to the front-line staff who are delivering it.
The hon. Member for Rochford and Southend, East (Sir T. Taylor) and I recently visited the Customs and Excise facility at Southend. I saw the area where mail is received and the envelopes opened for VAT cheques. It was fascinating to talk to the dedicated and committed staff. Many of them had worked there for many years, man and boy—and, indeed, young woman and pensioner, because some had come back after retiring. They shared with me the complete revolution that had resulted from the introduction of a measure to deal with incoming envelopes. They were sorting out cheques that needed to be accelerated and banked immediately because of their size.
There was great attention to the imperative of getting that money into the bank as quickly as possible. So when one listens to complex and technically challenging expositions as to what resource accounts and budgeting is, one should never forget that people are doing the business on the ground to deliver the benefits that it is so demonstrably delivering.
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