Examination of Witnesses (Questions 60
TUESDAY 9 JULY 2002
60. About the answer you gave to Mr Tyrie's
question last time. He asked about overseas contracts, and you
gave us a note on that, and it says basically that the DFID and
the Foreign Office are encouraging promotion of the work at the
Audit Office through embassies and consulates. Sensible stuff,
but why can it not be offered as part of the Aid Programme? I
mean, far more useful than building whole dams they do not want,
or bridges they blow up, or pouring money into the pockets of
a greedy élite, to offer your services as part of an Aid
Programme is, I would have thought, one of the most valuable things
we could do.
(Sir John Bourn) I absolutely agree with that, and
of course when we get money from them, it is from the Aid Provisions,
and it is exactly the point that I make to both the Foreign Office
and DFID, that if you really want to assist in the development
of society, you should attend to institutional development and,
of course, proper auditing is a crucial part of that. We are very
glad to have the Commission's support for that, because it is
exactly what I am saying to the two departments.
61. We have talked a lot about the strengths
of the National Audit Office at the moment. I agree with what
you have said. What are your weaknesses?
(Sir John Bourn) Although we have got good people
you can have better people still. In that sense, there are some
better people that I could have than some of those who I have
got. That does not mean to say I denigrate the ones I have got.
Although I do encourage them, want to help them to be better,
some are not as good as I would like. So, that is one weakness.
62. You cannot get rid of them?
(Sir John Bourn) There have been some cases where
it has been possible to do that, but there are complexities, and,
of course, the employment legislation gives a lot of protection
to people when they are in full-time employment. There have been
a number of people who have left us, people in their 50s, where
it is possible to take early retirement, and so that is a possibility
in those areas. So in saying that we could have even better people,
that is not knocking those who are there.
I feel we often have to fight for so long to
get the improvements in access, for example, that we need. I mean,
I think of all the things that came from Sharman, and often those
things myself, the PAC, have been fighting for ten years to get.
The fact that we did not get it for ten years, is that a weakness?
Should we have found a better way of getting it quicker?
63. I and another member of the PAC were put
onto the committee stage of the Resource Accounting Bill, and
we fought the battle there, beat the Ministers in the argument,
and Sharman was set up as a consequence. But it shows that they
do not always achieve things purely by the normal method, and
that is by just sitting in the conventional select committee.
(Sir John Bourn) That is right. You will not win on
the merits alone; it is timing, it is opportunity, it is the politics.
I look at it more, not so much as weaknesses, but what risks do
we run; what could, as it were, unhorse us? Obviously, a very
bad thing from my point of view would be if I spent over the budget
limit. If I had to ask for a Supplementary Estimate or an Excess
Vote. That would be very bad indeed.
Another risk, I suppose, would be having said
that I will audit all these accounts, that I will do 60 Value
for Money studies, supposing I did not actually complete them?
That would be a failure. If I could not recruit the people, if
I had to say to you, "I know the work is not very good, but
it is very hard to get good people and I just have to manage the
best I can" that is a risk, so that would be a weakness,
if I had it. And it is keeping up the quality of the people, that
is a risk that I have got to run, and be concerned about.
So those are the main sorts of risks that I
am conscious of, that I need to assess and manage and lay up for.
It has been interesting in the last year or so to develop, I think,
in many ways even closer relations between the Office and the
Committee of Public Accounts, in particular. More members of the
Committee are asking for briefings before the report is taken;
more people are coming to us with requests for advice on all sorts
of things. I feel that the fact more of them come shows that we
must be getting it right, but if nobody came; and nobody asked
for our advice on something; nobody thought it worthwhile speaking
to us about a report before it was taken; that would be a weakness,
and that would be a risk I have to run. So, rather a confused
answer as I move between weaknesses and risks, but it is the areas
that we have got to watch.
64. I hesitate to follow up what has been an
excellent sort of wind-up reply, but this can also be a wind-up
reply really. We have got resource accounting coming through Whitehall,
which is revolutionising accounting in Whitehall, and we have
identified a number of Departments which have shown serious weaknesses.
Is there any more that we can do here, to think about giving you
more resources so that you can attack any weaknesses better? Have
you got adequate resources? And really, as part of this wind-up,
are you happy with the resources that we give you to do your PAC
work and your liaison with Parliament? Do you think that we are
attacking these issues as forcibly and with adequate resources,
or is there more that we could or should be doing?
(Sir John Bourn) Well, I think that when I ask you
for 10 per cent, then that will be adequate to take us through
the next financial year. Now for subsequent years, the Corporate
Plan provides for a 6 per cent increase on that 10 per cent. If
I find, when I come to you with the Corporate Plan next year,
that resource account improvements have not picked up, as they
are beginning to, I will be asking for the money to do what I
know I have got to do, and to do it well and adequately. I have
not held back and thought, "Goodness, how could I possibly
ask for more than 4 per cent?" I have asked for 10 per cent
and that is justified. I do not need to ask you for more than
that next year, but I am grateful for that support, because you
are always saying to me, "When you have got good things you
can do for Parliament, and good work to do to make a success of
resource accounting, come to the Commission and tell us",
and that is what I will always do.
65. But in relation to the resource accounting,
can you tell us now that every Department is virtually up to speed
(Sir John Bourn) I cannot tell you that. There are
still a number of Departments that have not got it right. There
are still, of course, problems with what has been the most problematic
of all, which has been Defence. They are getting better. I have
discussed it with the Permanent Secretary and the Principal Finance
Officer. They have things in place to do better still; they are
committed; they edge forward; it is not yet right. There are some,
amazingly, as one might see, some small Departments, like Treasury
and Cabinet Office, which have not got it right, where you would
think they would because, essentially, their accounts are quite
simple. I mean, essentially, it is around employing people and
managing a building, and they did not get it right. Perhaps I
can ask Mr Sinclair to add to that and any other points about
resource accounts and the laggards who need more encouragement.
But we are giving that to them.
(Mr Sinclair) Indeed. We are in the throes, at the
moment, of just starting to audit the first live resource accounts.
Those are the ones for 2001-02. There is a perceptible improvement
in the timing and quality of the accounts that are coming to us,
but I think we will still have a number of departments who will
be very close to the statutory limit of 31 January for presenting
audited accounts to Parliament, and those will be the familiar
four or six departments that the Public Accounts Committee has
previously discussed. And we do find that there is still patchy
commitment amongst some senior civil servants to actually driving
resource accounts forward. In a sense, the delivery of the first
real live resource accounts for 2001-02 is the most acid of all
tests throughout this long process. And I think we are hoping
to see very significant improvement in this cycle. If there are
still laggards, then I think that will be the ultimate point to
raise real concerns; that will play out between now and the end
of the year.
66. Laggards are not just a problem in timetabling;
they are a problem in terms of Parliamentary accountability, are
(Mr Sinclair) I use the phrase "laggards"
not merely to talk about the timetable, but it is also about the
quality. And I think the issue has been that some of the laggards
are amongst the biggest Departments of state, and if this were
some of the small Departments, which were not big resource consumers,
this might be something that would not raise a big deal of concern.
But it is a small group of very large Departments, which are consuming
large resources and have big liabilities. And those are the Departments
we want to see get it right.
We will be producing a report from the Committee
of Public Accounts on the outturn of the 2001-02 resource accounts,
so that the Committee will be able to see it and call up witnesses.
67. In what timescale would that be, now?
(Mr Sinclair) That will be as soon as the round is
completed and soon after 31 January; that is the final statutory
date by which Departments have to lay their accounts before Parliament,
and from what I have said, I think it is a fair bet that there
will be a small handful of Departments that will be right up to
that limit, and so we shall report as soon as possible after the
round is complete.
68. I find it distinctly disturbing that you
specify particularly the Cabinet Office, which has all these efficiency
units telling everyone else how to do things better, but, as we
found when we had the E-envoy before the Public Accounts Committee,
the scrutiny, as far as he was concerned, seemed to be virtually
non-existent. You say you will be producing a report, so we will
wait on that.
69. Well, Sir John, thank you very much, and
your colleagues. It has been a new experience in that we have
had the crowds of the public listening to our discussion. That
does not seem to have inhibited you. Thank you very much and we
will look forward to the next discussions and to the notes that
you have promised to put in. If there are any points we feel we
have not covered, we will drop a note and you can let us have
a note in return.
(Sir John Bourn) Thank you, Chairman.