Select Committee on Treasury Minutes of Evidence

Examination of Witnesses (Questions 20 - 39)



Dr Palmer

  20. I just want to say that I do not actually agree that you can be blamed for any delays of our predecessors but I do think that the work so far appears to be driven by information generation rather than by recipients saying what they would like to find out. I would like to support Kali Mountford's suggestion of a wider survey of Members of Parliament as one of the key inputs for Departmental Reports: "What kind of information do you seek here?". I was very struck by your police example. That is the kind of thing people would like to know about.
  (Mr Sharples) What kind of information are we seeking? We circulated a questionnaire, as I was explaining earlier, to as many people as we could identify that had an interest in the reports and asked a number of questions. Details of their responses are set out in the report and they included questions about, "What do you regard as the most important elements of the Reports?" and, "What additional information would you like to see in them?". We want to see reports—I stress again—which are clear and useful to their readers and the more we know about potential readers and their interests, what information they would like to see, the better we can design the Reports.

  21. Yes. What I meant was that you could, for instance, ask each departmental select committee what items of information about the department would they like to know rather than a general question about reports specifically.
  (Mr Sharples) Indeed, and we did our best to get views on that issue through this consultation and a number of the committee clerks reported on issues which their committees had asked the department to include.

Mr Beard

  22. In July 1999 the House of Commons Procedure Committee said quite presciently: "Committees must be vigilant to ensure that the Government, in reforming financial documents, presents what the House requires, rather than a department's view of what the House should have." Would it not be fair to summarise the previous discussions by saying that that is exactly what has happened, that we have the departments' view of what the House should have rather than the House's view?
  (Mr Sharples) With respect, I do not accept that at all. First of all, nothing in these proposals will mean less information for Parliament. There is no suggestion at all of holding back information in which Parliament has an interest which you have had access to in the past. These proposals are simply about the form in which that information is published. They are designed to try and produce reports which are better designed, easier to use, more appropriate to their audiences. The views of Parliament as to what information you would like to see included in these Reports are a fundamental driver of this process and we want to make sure that these Reports meet your needs. I come back again to the basic proposals here. We think they are basic common sense. They will produce reports which answer the obvious questions about what departments are doing rather than clutter up the Reports with a lot of rather obscure technical information which is difficult, even for financial specialists, to understand. We think the substance of these proposals will be to produce better reports which are more useful for Parliament.

  23. Can I just take you into the review process more widely because departments, under the supervision of the Treasury, have got Public Service Agreements which must be produced and then at some point there is a review as to how targets are being achieved. How do these two reports fit with that process?
  (Mr Sharples) The Public Service Agreements provide the framework for the work of the department. They set out the aim, the objectives and the targets for the department that are agreed as part of the Spending Review. Those Public Service Agreements then provide the framework for reporting on performance and that will continue to be the case. Each of the spring reports will include a report on performance against each of the PSA targets and the supplementary information published in the autumn will provide an update on that information. The PSAs remain central to reporting and accountability.

  24. So will the spring report be the Departmental Report that is reviewed by the Treasury or the Cabinet whatever, in checking whether this Public Service Agreement has been achieved or not? Is that the report that will do that?
  (Mr Sharples) Exactly. The process of checking internally to government goes on all the time. As you know, the PSX Committee chaired by the Chancellor keeps a close eye on the performance of departments on their PSA targets and receives regular reports on progress, but the spring Report will continue to be the main way in which a public statement is given on progress against targets.

  25. But will that report, as it comes to this Committee, say, be the same report that goes to the PSX Committee to decide whether the department is living up to expectations?
  (Mr Sharples) It will include exactly the same information.

  26. It will not be the same report?
  (Mr Sharples) The format of the reports that go to PSX will obviously be different. We cannot put 3,700 pages of Departmental Reports to the PSX Committee.

  27. Is that the only difference, that the PSX Committee will be receiving a digest of this Report?
  (Mr Sharples) As I say, the PSX Committee receives regular reports on the progress of departments against their targets.

  28. The Autumn Statement, as I understand the paper, will be, as the Chairman has said, a backward-looking account—the accounts essentially—with some statement of what has been achieved. The dates that that will refer to will be for the previous year, will they not?
  (Mr Sharples) For the previous financial year, yes.

  29. So it will end in April?
  (Mr Sharples) The accounts will certainly cover the financial year ending on 31 March. For performance information, it would make sense to give the latest performance information on, whatever is the latest reporting date. In some cases that will be the financial year ending on 31 March. In other cases there might have been, for example, new exam results coming through which are important for reporting on educational performance. The autumn update would give the latest performance information.

  30. But that review will tell you what a department has achieved and has not achieved and what it has done with the money. That is the essential purpose of it.
  (Mr Sharples) It will give an update on the performance of the department and set out the detail of the accounts which deal with one specific financial year. The intention is that the spring Report will give a comprehensive view of both the performance of the department and its allocation, its use, of public money over the full period covered by the plans.

  31. But if the autumn Report is going to give you an account of what has been going on in the preceding year, is that not information that is very relevant to adjudicating what is proposed for the next year and seeing where the spring Report is proposing that deficiencies may be made good, and yet that information will not be there for a further six months? Is the cart not before the horse?
  (Mr Sharples) I do not think so, no. The purpose of this additional autumn performance information is to provide an update. At the moment we report annually on performance against PSA targets. We are proposing to provide some additional information. We think that will help Parliament and help the public to understand what departments are doing.

  32. I am confused because I thought a moment ago you said that the information that was covered by the autumn Report would be relevant to the financial year that has ended the preceding April.
  (Mr Sharples) It would be relevant but it may in some cases include some information which has come forward after the end of that financial year.

  33. But the bulk of it will be for the year preceding 1 April.
  (Mr Sharples) It depends on the information which is relevant to measuring performance on a particular PSA target. In some cases that information will be financial year based. In that case publishing information in the autumn will refer to the financial year that has been completed. In other cases, and this is true of many PSA targets, the information that is needed to report on progress is information which may come out quarterly or annually or perhaps even every two years and is not related to a specific financial year because it is a measure at a particular point, for example, exam results or crime surveys, events of this kind. I would not say that it was true that the performance information published in the autumn will only relate to the financial year that has been completed. It will be the most up to date available performance information.

  34. Let me give you an example of possible concern. The department has been allocated quite a large amount of money and it has not been spending it, and we will not know that until the accounts are prepared, so at the time when we are looking at the spring Report, which tells you what the department is going to do to remedy any defects, we will not be in a position to know whether they are overspent or underspent or hit the target until the autumn when the full accounts come out. Is that not a peculiar position to get into?
  (Mr Sharples) I do not think that is quite right because we do publish Estimates of the outturn for each department. First of all, in the Budget we publish our best Estimate of the outturn on departmental expenditure limits and we publish an update on that information normally in July in the Public Expenditure Outturn White Paper, so there is information on outturn for spending that is put in the public domain well before the accounts.

  35. The whole idea of these two papers is to simplify things. We are going to end up with four documents at that rate. We have got the spring account, we have got the July Estimates and another lot of Estimates that have been corrected, and the autumn account.
  (Mr Sharples) The process of reporting to the public and Parliament is one which has a number of stages and each of those stages involves a number of documents. I can assure you that if there is any way of simplifying this process we would be absolutely delighted to pursue it and discuss it with you, but it seems to involve a number of documents which we cannot avoid and would not want to avoid publishing: main Estimates, supplementary Estimates; we publish information in the Pre-Budget Report and in the Budget Statement; Public Expenditure Outturn White Paper, in accounts and in Departmental Reports. Each of these documents has a specific purpose.

  36. Mr Sharples, you do not seem to accept that there is a sort of logical non sequitur in having the foundation information that is relevant to the forward projection of what a department is going to do not available until six months after the department has actually published its forward projection. You do not seem to see that there is anything strange in this.
  (Mr Sharples) Can I say on the publication of accounts that we are very keen to see accounts published more quickly after the end of the financial year. It is unsatisfactory in my view that there is such a long delay before accounts are published and we would like to bring them forward. I think we are at one on that point.

  37. But when we get the accounts, just turning to autumn, if we see some loopholes and things that have gone wrong, there is nothing that can be done about it until the next spring, so it is going to be actually 12 months after the accounts close before you can do anything about anything you pick up in them.
  (Mr Sharples) There are a number of other points at which information is available and in which there is a possibility for discussion. For example, after the accounts are published, or perhaps even before the accounts are published, there is the Pre-Budget Report which sets out some information. There is a Budget Statement in March, there are Estimates and Supplementary Estimates. The winter round of Supplementary Estimates is coming very shortly. Each of these documents provides the best information available at the time and provides an opportunity for Parliament to review progress on spending.

Mr Mudie

  38. I think you are trying to reconcile two things. You are trying to reconcile financial information. As you say, the financial year ends on 31 March. You cannot bring everything together. It is like local government. You get the estimate published then but you have the actual result six months later in September and you are the same. You cannot say you finish accounts on 31 March and publish within a week the actual. You have got to get the paperwork to catch up and in the autumn you know where you are on that preceding financial year. That does two things. Mr Beard is right, that you are running two things and it is hard, if not impossible, to reconcile them. The question I would put is, what use is a Departmental Report? I know the Treasury's is published in April. I have got Education published in March. What good is a Departmental Report published at that point? It is no use, as Nigel Beard has said, for the year it is supposed to be speaking about; it is no use for the future and it cannot provide any actual firm figures because the Treasury will not have them for another six months. Apart from a piece of attractive printing and propaganda what good is it to Members?
  (Mr Sharples) I think spring is a very good time to publish a comprehensive report. First of all, it sets out firm plans for the years ahead that have been agreed in the Spending Review, so at the start of the financial year it is setting out what is the budget available to the department to spend for that year and for the years beyond that, and sets that in the context of spending in previous years. The second reason is that it ties in with the parliamentary approval timetable. Estimates are published in the spring, consolidated over the summer and publication of the Departmental Reports in the spring provide the contextual information to help you understand and discuss the Estimates. We would be happy, if there is a strong view that there is a different time of year that would be better to publish a report on department's activities, to discuss that with you. The views we have had in our consultations on this have been very strongly that the spring is the best time.

  39. I will live with that. Those two things you think come together which are in the future plans and the Estimates. Education Estimates are 50 pages in this document, separate. What is wrong with including them in this Departmental Report then? If I do not want to be confused with figures I do not read pages 150-200, I read the first 150 pages, but if I do want to get financial information I have the main Estimates where you say the two times tables are correct, so why separate them?
  (Mr Sharples) The reason for proposing separating them—and I should emphasise that they have always been separated in the past, up until this year—is that having a number of pages (I do not think it is as much as 50) setting out the technical Estimate which is part of a parliamentary process embedded in a report which is for wider public interest and use makes that document more bulky, more expensive and less easy to understand for the average reader.

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