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Mr. Geoffrey Clifton-Brown (Cotswold) (Con): When I was a member of my hon. Friend's august Committee, before he was Chairman, I suggested that the promotion hierarchy for senior civil servants should be dependent on their ability to manage satisfactorily the budgets in their Department. Does my hon. Friend have any sympathy with that idea?
Mr. Leigh: Yes, I have enormous sympathy with that idea. Civil servants should be assessed on how they run projects. We must move away from a culture in the civil service whereby promotion has depended too much on one's ability to advise Ministers and deal with policy, and too little on running projects. Again and again, we see permanent secretaries—senior civil servants—who have never run a project in their lives, and never been assessed on that. That is simply not acceptable in the modern world.
I want to comment briefly on the Comptroller and Auditor General's budget assumption work. Under the Finance Act 1998, the National Audit Office audits those parts of the Budget for which the Chancellor sees fit—that is the important part. This year, one of the assumptions newly audited by the NAO related to the growth of the VAT gap. Mention has already been made of the different estimates on fraud and error used as part of a new method for forecasting VAT receipts, which is a vital part of the Chancellor's arithmetic and of how he informs us that he can keep to his golden rule.
The NAO found that the rate of growth in the VAT gap exceeds the historic average, and is therefore duly cautious. The NAO brings independence to its work
and, clearly, expertise—not just financial, economic and statistical expertise but the expertise that comes from being able to do its core audit work across Departments. I use the VAT gap assumption as an example of precisely that. As we have been told, the NAO recently published a report on work by Customs and Excise to tackle VAT fraud and losses. It shows that Customs and Excise is stepping up its efforts against VAT fraudsters, but it is too early to be optimistic about the impact on the VAT gap. The important point, which I have not yet heard emphasised in this debate, is whether it can secure a sustained reduction in fraud and error, which currently run at a staggering £12 billion. The jury is still out on that. On those assumptions alone, we can see what a difference—billions of pounds—can be made in revenues coming into government.As I said, the National Audit Office audits those parts of the Budget that the Chancellor sees fit for audit. Some assumptions have been audited in the past, others this year. A valid assumption made last year and audited as such will not necessarily be valid this year. The fact that something has been audited in the past does not make it right today or tomorrow.
I believe that we should assert, or rather reassert, the traditional independence of our auditor. He is, after all, our auditor. He reports to us—to Parliament—not to the Government. Surely it is time for the Treasury to consider amending the Finance Act to give the Comptroller and Auditor General the unfettered freedom—I emphasise those words—that he enjoys in all other aspects of his work, so that he rather than the Chancellor decides which assumptions to audit.
I am pleased to see both the shadow Chancellor and the Chief Secretary to the Treasury present. This is not a party political point, and I hope that both sides can agree that if the main parliamentary auditor is asked to audit something, he must have freedom to do the work that he wants to do. I believe that that—coupled with the implementation of my earlier suggestion that the NAO should conduct value-for-money audits of Departments—would produce more confidence, more transparency and more accountability. Surely we as parliamentarians are interested in confidence, transparency and accountability. We should at least be able to agree on the parameters of political debate. We can have an argument across the Chamber about a policy decision on whether to spend more or less on a particular aspect of government, but let us at least agree on the assumptions.
I am very cautious about the ability of any Government—I am thinking of historical examples—to reduce waste and incompetence in the public sector. I have no doubt that each month during the next 140 years—just as happened during the last 140 years—the NAO will produce a coruscating report on waste and incompetence in the public sector. I believe that we must ultimately move towards private sector solutions. I give the Government credit for having grasped the nettle, or bitten the bullet, in terms of the private finance initiative. That met with some opposition on their own Benches, but involving the private sector in the delivery of public sector solutions has enabled us to produce more hospitals and other buildings to budget and on time.
Mr. David Cameron (Witney) (Con): Does my hon. Friend think that we are transferring as much risk from
the public to the private sector as was originally intended through the PFI? Or is it too much of an exercise in trying to take finance off the Government's balance sheet?
Mr. Leigh: That is an interesting point. Some of my hon. Friends, in particular, believe that that is what lies behind it, which is worrying. A couple of weeks ago, I had an interesting conversation with the former Chief Secretary in the French Government. Members of that Government are coming to study what we are doing with the PFI. There is amazement throughout Europe that there is so little political debate about the fact that so much debt is being transferred to future generations. There is little understanding of that in Parliament, and we engage in little debate about the whole PFI issue, which I think should be a central element of financial debate. Our debates should be better informed so that we can resolve the issue one way or another.
I believe—it is a purely personal belief—that we shall have to adopt more PFI-type solutions in other areas of public sector work, including the management of hospitals, schools, DWP projects and perhaps entire benefits systems. The debate on all that has hardly begun.
Mr. Clifton-Brown: I am grateful to my hon. Friend for being so generous in giving way. Part of the purpose of the PFI was to transfer risk, but many companies involved in such schemes tell me that the risk is considerably reduced because their lawyers spend so much time trawling through contracts and including exceptions in them. Does my hon. Friend agree that the Government need to become much smarter in their specifications?
Mr. Leigh: Yes. That is a good point on which to end. If we are to move towards more private sector involvement in delivering Government programmes, we must be much cannier, smarter and more ruthless when we deal with the private sector. Private companies take no prisoners. I do not blame them for that because they are there to make a profit. The Public Accounts Committee has witnessed too many examples of the risk not being transferred.
Let us consider only one such example—I could cite numerous others. The Government decided to build an armouries museum in Leeds. Hugely over-optimistic assumptions were made, and it went bottom up. The Government immediately bailed it out. Did the private sector suffer? Of course not. It never suffers in such circumstances. That is why we must bring more private sector people into government so that they work for us.
Let us forget for a moment the normal party political divide and unite as the guardians of the taxpayer. We represent the taxpayers, who pay for everything in this Building, all PFI projects and everything that we do. Why do we allow so many instances of the private sector, which we want as a partner, taking us for a ride because it employs better lawyers and is more ruthless and vigorous in dealing with projects?
There was one recent example in a Committee hearing of a project that the Government delivered well. I believe that it was a new call centre in the NHS. I asked
one question of the lady who ran it: "How long have you been in this job?" She replied that she had been running the project for five or six years. That was a unique example of somebody in the public sector who had not been moved from job to job but was there, on the ball, and had run a project for not just a few months or a year or two, but for five or six years. She had the expertise to run it and to deal with the private sector.That is a good note on which to end. I hope that, at the end of the Budget debate, we can unite in trying to get the best deal for the taxpayer.
4.12 pm
Mr. Paul Goodman (Wycombe) (Con): It is a pleasure to follow my hon. Friend the Member for Gainsborough (Mr. Leigh), who gave a persuasive exposition of the way in which it is possible to reduce the rate of increase in spending—he specifically referred to the Department for Work and Pensions—without cutting front-line services. I intend to draw on my experience as a member of the Select Committee on Work and Pensions to speak about poverty and the Budget.
I want to make three preliminary remarks. First, I am determined, in a moderate and irenic spirit of good will, to welcome something in the Budget. I shall therefore join my hon. Friend the Member for Havant (Mr. Willetts) in welcoming the £100 payment to pensioners. I am not sure that my constituents in High Wycombe and Buckinghamshire will be as generous-minded without expressing some reservations. The payment follows the transfer two years ago of some £11 million out of Buckinghamshire to other counties. The preceding year, my constituents paid an increase of more than 15 per cent. in the county council element of the council tax.
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