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Mr. George Osborne: I am interested in the Minister's experience in Southend. During the months that I have served on our Committee I have long felt that it would be useful to have not just the permanent secretary of the Health Department, but also a doctor and a nurse to check what was going on, or not just the permanent secretary of the Ministry of Defence, but also a soldier. Perhaps we could look at that in the away day.

Mr. Boateng: This away day gets more and more interesting. Quite how the top brass will take to a squaddie

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being dragged along with them to a Committee is a different matter. Joking apart, there is a serious point about following through the changes that occur at that level to their logical consequence on the ground.

There is, of course, more to do. The resource accounts for 2001-02 will be qualified for a small number of Departments and we need to work hard to achieve the timeliness of accounting information that is routine in the private sector. The remaining problems arising are being resolved and we are confident that all of the benefits of RAB will be realised. I look forward to that and to seeing the impact of increased and improved information on the work of the Committee in due course. For perhaps the first time it will be possible to hold Departments to account for items such as their management of assets and working capital movements. We are beginning to see the fruits of that, as was made clear in the course of my exchange with the hon. Member for Newbury.

I just want to say a few words about whole of Government accounts. Building on the principles adopted for resource accounts, the Government are moving rapidly towards the production of whole of Government accounts. Akin to commercial group accounts, whole of Government accounts will bring together all areas of Government work in a single account. The intention is to present a true and fair view of the Government's activities, providing a complete overview of the public finances for the first time. That will further improve accountability to Parliament and taxpayers.

The Government are introducing whole of Government accounts in two stages. Accounts bringing together the activities of central Government bodies will be published in 2003-04, following dry run presentations in this financial year and 2002-03. Whole of Government accounts with full public sector coverage are to be published from 2005-06. We look forward to the continuing contribution of the PAC and NAO to the development of whole of Government accounts and to working with them on these matters.

I shall say a few words on performance reporting. The Government have introduced significant developments in the provision of information about departmental performance. Tough, outcome-focused targets are set for each Department and are published in departmental public service agreements. The targets need to be met by Departments in return for additional investment. We had some interesting exchanges about targets this afternoon. The next spending review will build on the approach, setting targets focused on the Government's key priorities, linked to a prudent allocation of resources. We need to make sure that the information that underpins reporting on targets is reliable. We think that the introduction of independent validation would help to provide assurance on the quality and integrity of data systems. That is the importance of the working group established by my right hon. Friend the Chief Secretary to consider arrangements for improvements in the validation of PSA data systems. The National Audit Office, the Office for National Statistics and the Audit Commission have made valuable contributions to the group and the conclusions of the work will be announced in the Government response to Lord Sharman's recommendations in his report, "Holding to Account", about which I shall say more in a moment.

Mr. Rendel: Does the Minister accept, in line with earlier remarks, that the law of unintended effect, which

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hits Government so often in all sorts of ways, is particularly likely to have a deleterious effect when the Government are setting targets? The Government set a target for one thing and almost invariably in order to meet that target create another problem.

Mr. Boateng: I would not say "almost invariably". There is that danger and it must be guarded against in the setting of the targets. That is why information and analysis before the targets are set is so important. That danger is there, and one would be foolish to deny it. However, I would question the suggestion that targets are plucked out of blue air—or blue sky.

Mr. Nick Ainger (West Carmarthen and South Pembrokeshire): Thin air.

Mr. Boateng: Thin air; I am much obliged to my hon. Friend. I have been present in the course of the conception, gestation and birth of targets and sometimes it is a prettier sight than others, but they are never plucked out of thin air. They never just appear out of the blue skies. They are the products of a laboured exercise. The important thing is to ensure that we get the mechanics of that exercise right—that we feed in the right information, conduct the right analysis and ensure that the evidence that underpins the targets is fit for the purpose. That is not always the case, and it is sometimes necessary to revisit them. However, the hon. Gentleman makes a fair point of principle and it is important to have regard to it.

I said that I would say something about Lord Sharman's report and hon. Members on both sides would be disappointed if I did not. As my predecessor—now the Minister for School Standards—and colleagues explained in debate in the House and the other place during the passage of what became the Government Resources and Accounts Act 2000, the Government have never objected in principle to extensions to the statutory powers of the Comptroller and Auditor General in relation to audit and access. The importance of independent audit is well recognised as a key accountability tool, and access to information associated with an audit is essential for the Comptroller and Auditor General. Our concerns focused on the practicalities of change, particularly how to avoid undue burdens for the private sector if non-statutory access rights became statutory, and the need for assurances about the quality of audit if competitive influences were removed.

The Government welcome Lord Sharman's recognition of those concerns and the need for them to be addressed through protocols between the Government and the Comptroller and Auditor General. Following publication of the report, my officials have had productive discussions with the Comptroller and Auditor General's officials on the content of those protocols. I am enormously grateful for the constructive way in which the NAO has approached those discussions. In the light of the assurances that we have received, I hope that it will be possible to make a positive response to the recommendations.

We are grateful to Lord Sharman for considering audit and access, and for his views on accountability more widely. We have taken time to consider Lord Sharman's recommendations, as they do relate to issues that were for a long time a source of intense and stimulating debate.

The hon. Member for Gainsborough (Mr. Leigh) will be glad to hear that our consideration of the recommendations is now nearing completion and my right hon. Friend the

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Chief Secretary hopes to publish the Government's response to Lord Sharman's report shortly. We hope to respond positively.

Mr. Bacon: Will the right hon. Gentleman give way?

Mr. Boateng: I think that I have given way sufficiently.

I do hope that I have given hon. Members, particularly the sceptics among them—they are members of the Committee so, by definition, they are all sceptics—the sense that we do intend to respond positively. I trust that our response will signal the end to long-running disagreements over many years, during the terms of office of many Governments of all political persuasions, between Government and Parliament.

It has been an important debate. It has not been possible in my response to cover all the arguments that hon. Members made. They made some very important points about risk management. We are glad that the Committee continues to welcome the improvement that has been made in risk management processes in Government. We are continuing to improve the management of risk and to develop statements of internal control.

A progress monitoring exercise is being planned for the spring to assess progress in developing internal control systems and to identify issues on which Departments will need further support and guidance to help them to complete the effective implementation of that policy. The Committee's role has been enormously important. It has brought to light valuable evidence of strengths and weaknesses, and it has played a similar role in the promotion of innovation. Risk management is crucial if we are to promote innovation in the delivery of public services. If everyone is risk averse, necessary improvements are not likely to occur.

Our long-term goal is to deliver world-class public services through investment and reforms that ensure that taxpayers receive good value for money. The work of the Committee and the contribution of its Chairman, members, advisers, staff and Clerk—with the NAO—is crucial to achieve those goals and, indeed, to the very purposes of Parliament. Scrutiny is absolutely central to Parliament's role; it drives improvement and helps to ensure that regard to regularity, propriety and value for money is given in all aspects of Government projects and operations.

We are enormously grateful not only to hon. Members for the contributions that they have made today and to those hon. Members who have taken the time to attend for all or part of the debate, but to the Committee for its on-going work. We look forward to continuing to work closely with the Committee, to being challenged by its scrutiny and to the public receiving an improved service as a result.

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