Select Committee on Public Accounts Minutes of Evidence

Examination of Witnesses (Questions 180-199)



  180. As it says in 2.10, that would have required you to slow down your regeneration activities.
  (Mr Hall) Yes.

  181. Sir Richard, the Chief Executive, as he has just said, the Director of Finance and Price Waterhouse all came to the conclusion that these anticipated grants were allowed, did you not have a discussion with the Treasury in which it was made clear there was a distinction between monies which had been voted by Parliament and monies which had not been voted by Parliament?
  (Sir Richard Mottram) Not that I am aware of, Chairman, but I can obviously go away and check that.

  182. In your own mind, in the mind of your Department, was it okay to anticipate monies?
  (Sir Richard Mottram) I think it was, yes.

  183. Including monies which had not been voted by Parliament?
  (Sir Richard Mottram) My guess is, and I can certainly look at this again, Chairman, as the first sentence of paragraph 2.10 says, "The Department told us that it had interpreted Treasury guidance as permitting such anticipation of grant." I agree there is an ambiguity there, but the question is whether the Department fully understood the distinction between a sort of 45 per cent level and a 100 per cent level, or indeed a two year level, and I am not sure it did, but I will go back and double-check.

  184. You mention two years, it refers in paragraph 2.9 to ". . . a further £19 million and £20 million respectively of grants not due until two years later, which Parliament had not voted."
  (Sir Richard Mottram) Yes, exactly.

  185. You were aware of those monies, presumably?
  (Sir Richard Mottram) The Department was, yes.

  186. Was the Treasury aware of them?
  (Sir Richard Mottram) Yes, absolutely, because those monies—

  187. Presumably the Treasury was aware they had not been voted?
  (Sir Richard Mottram) The amounts were obviously derived from the forward forecasting of the provision for the Corporation.

  188. So the Department was aware they had not been voted by Parliament and the Treasury was aware they had not been voted by Parliament?
  (Sir Richard Mottram) I think they must have been, yes.

  189. Treasury?
  (Mr Glicksman) I think that depends whether we had seen the accounts of the Corporation. I am not sure we had.

  190. Would there not have been a need for an extra vote?

  196. Do you want to explain a bit more?
  (Mr Glicksman) We had a hybrid system in operation in those days. This was in the days before resource accounts. We had controls on a cash basis and Parliament voted a grant in aid to the organisation on a cash basis. But the Treasury required bodies such as all non-departmental public bodies to produce their accounts on an accruals basis, which was different from the way Parliament voted the money. Accruals accounts require organisations to take account of certain types of transactions which are going to happen in the following year—creditors, debtors, provisions and so on. So the Treasury put out guidance on how to take into account things which are going to happen in the next financial year. The bit of guidance I was reading from was, how do you take account of the fact you are going to have grant in the next financial year.

  Mr Bacon: I was happy with Sir Richard's previous answer, that he should have done it and he did not.

  Chairman: We will take that answer off your time.

Mr Bacon

  197. Sir Richard, in paragraph 5.8 it says that the Department were aware of the Corporation's approach to business affairs. In 5.9 it goes on to enumerate a number of things the Department was aware of, specifically, "The Corporation entered into agreements without the necessary departmental and Treasury approval, and had deferred payments to creditors. It was also aware that the Corporation was agreeing the terms of deals with, and making moral commitments to, developers, contractors and other parties without approaching the Department for approval first". On page 45 there is a list of the Board members, there is Mr Ian Mathieson, the Chairman of the audit. Did anyone in the Department draw these concerns to the attention of Mr Mathieson?
  (Sir Richard Mottram) I do not know. I will have to look at that.[2]

  198. The Corporation Chairman told us that the Department did not share concerns about the Corporation's financial management with the Board. I take it Mr Mathieson was not told?
  (Sir Richard Mottram) There could be—

  199. The Chairman was not told.
  (Sir Richard Mottram) Could it not be the distinction between the Board and the Chairman and the Chairman of the Audit Committee. Each year Price Waterhouse were producing three documents dealing with the audited accounts, they were auditing the accounts and they were signed off, as Mr Hall explained.

2   Ev 32, Appendix 1. Back

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2002
Prepared 14 August 2002