Select Committee on Treasury Minutes of Evidence

Examination of Witnesses(Questions 160-179)



  160. When you say rationalising, you are not rationalising the district auditor. We have the district auditor. You are having a second auditor in housing.
  (Mr Macpherson) At the moment there is a Housing Inspectorate in the Audit Commission.

  161. Yes.
  (Mr Macpherson) There is in effect also housing inspectorate within the Housing Corporation. The Deputy Prime Minister will set out his proposal, no doubt, in due course but the thinking underlying this is to create a more rational and effective inspection unit.


  162. To answer George's question, take for example hospitals, there will be two bodies, there will be the Audit Commission and another body. It is not just one body.
  (Mr Macpherson) In terms of the high level inspection and auditing, the part of the Audit Commission which dealt with hospitals will be merged with the CHI, the Commission for Health Improvement.

  163. The position on the ground, will they see one or two bodies going round to audit them?
  (Mr Macpherson) Just one.

  Chairman: No.

Mr Mudie

  164. Why, if you have a Housing Inspectorate and a district auditor?
  (Mr Sharples) In relation to the Health Service, the proposal is to move from an arrangement where currently we have two bodies involved in inspection of hospitals to a single unified body.

  165. Who are the two bodies?
  (Mr Sharples) The Audit Commission on the one hand which has responsibilities for local government and for the Health Service.

  166. What is going to happen to the Audit Commission?
  (Mr Sharples) Its Health Service responsibilities are going to be merged with the—

  167. Taken from them?
  (Mr Sharples) The new Commission for Health Care Audit and Inspection is going to be set up.

  Chairman: Who will audit the accounts of these bodies?

Mr Mudie

  168. They are taking the Audit Commission's responsibilities covering health and giving them to a new body. What other powers will be taken from the Audit Commission and what is the criticism of the Audit Commission? Why suddenly do they have to be divested of their powers?
  (Mr Macpherson) We think the Audit Commission is very effective but equally we want to create in one place, building on the excellent record of the Audit Commission, a very strong single inspectorate which can look at value for money issues as well as simple, not simple rather complex health standard issues.


  169. Will the Audit Commission still have a statutory duty to audit the accounts? It will not?
  (Mr Macpherson) I am happy to provide a note on that4.

Mr Mudie

  170. You can have a change of mind in two minutes.
  (Mr Macpherson) No, you are asking about the accounts. I was mainly talking in terms of performance indicators. You will read from time to time Audit Commission reports on the different performance of trusts across a range of indicators. The key thing is to bring in those value for money indicators together with the Health Standard Indicators which are covered by the Commission for Health currently.


  171. Will the Audit Commission still have a statutory responsibility to audit the accounts in hospitals then? Will you write to us on it?
  (Mr Macpherson) I will be happy to provide a note on that.

Mr Mudie

  172. Can I just ask a question on costs. Have you costed as good Treasury people in the new arrangements the additional costs and have you actually added up how many people—We know the accountants are all looking for work so there will not be a shortage. Have you decided how many accountants you are going to take in and the cost of them?
  (Mr Macpherson) This Commission has yet to be set up.

  173. No, I am speaking of the seven.
  (Mr Macpherson) It requires legislation to do it.

  174. This is a major reform.
  (Mr Macpherson) It is a major reform.

  175. You must have costed it.

4  Ev. 26.

  (Mr Macpherson) Yes.

  176. How much?
  (Mr Macpherson) The issue though here is comparing the current system with the new system and, as I say, one of the motives in reforming this area is that there are a whole lot of bodies looking at all sorts of things and we want to get the economies of scale.

  177. You said you have costed it, how much? I said "Have you costed it" you said "Yes" and you went on speaking so I am bringing you back. You have costed it, how much?
  (Mr Macpherson) Just talking about the housing one, the Deputy Prime Minister has yet to announce his proposals on the subject, so it would be premature to give the costing.

  178. He has got to do that within the limits you have set him.
  (Mr Macpherson) Exactly, so we are clear it is affordable.

  179. But leaving housing alone, give us a total. You have clearly set this up as a major reform and you said you had costed it. When a public servant is asked by a member of the Treasury Select Committee when you said you had costed it, could you tell us how much, it seems to me an answer is required.
  (Mr Macpherson) What we have done is set out plans for the next three years so it is going to be affordable within those plans.

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Prepared 12 December 2002