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Mr. Sadiq Khan (Tooting) (Lab): Is the hon. Gentleman concerned that the media sometimes highlight our criticism of the Government, and pay less attention to the occasions when we praise Departments on their efficiency?

Mr. Leigh: That is the media's besetting sin, but we try to structure our reports and press releases so as to strike a balance. We try to pay tribute to the Government when things go right, but it is the nature of the media that they engage in negativity and prefer criticism to congratulation. However, in its reports, the Committee tries hard to congratulate the Government—the customer—when they have done well. We do our best in that regard.

It is a tribute to the Committee that we do not get involved in policy. We deal in the nuts and bolts of things. We are not policy wonks, as we engage in what people care about. That is why we get considerable coverage. For instance, the entire front page of today's edition of The Independent is devoted to one of our reports, and the same happened with The Guardian earlier this week. It is proof of my consensual nature that I have actually started to read those newspapers.

Credit for the Committee's achievements should go, in part, to hon. Members who have departed the House since the last PAC debate. We are sad that they have left, although I see the hon. Member for Dagenham (Jon Cruddas) in his seat. However, I am confident that the new members will help carry forward the momentum generated by their predecessors. I welcome to the Committee my hon. Friend the Member for Tunbridge Wells (Greg Clark) and the hon. Members for Burnley (Kitty Ussher), for Bishop Auckland (Helen Goodman), for Bristol, West (Stephen Williams), for Orkney and Shetland (Mr. Carmichael), for Portsmouth, North (Sarah McCarthy-Fry) and for Tooting (Mr. Khan). I also welcome to the Committee the hon. Member for Great Grimsby (Mr. Mitchell), who, ironically given the relative youth of some of the members of the Committee, is the newest member of the Committee, and a valuable member too. He has already turned up pretty well every time and, in his usual robust style, has given permanent secretaries a real grilling. We welcome him.

Irrespective of how long hon. Members have been in the House, I am sure that each and every member of the Committee will continue to add something uniquely valuable to our work. Members of the Committee both past and present will understand the hard work and commitment that membership demands. We meet twice as often as any other Committee. So I know that I will not be alone in expressing my thanks and deep gratitude to Mr. Nick Wright, our Clerk, and others who support the Committee, especially the National Audit Office. It is no secret that without the NAO we would not be able to do anything.

We must also remember all those who have served on or worked for the Public Accounts Committee in the past decade. The Committee has issued more than 400 reports and questioned hundreds of senior officials. Witnesses have provided the Committee with vital insights into the challenges that they face in their ongoing battle to improve public services.

I want to outline this afternoon the key findings emanating from the Committee's reports over the past 10 years—findings that are present in the Committee's
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work since my last address and which lie at the heart of current policy discourse on achieving value for money in the delivery of public services.

Indeed, as the parties come closer and closer together on policy—[Hon. Members: "Ah."] I make no comment on that, of course. The debate on how policy is implemented is even more important. That is why the role of the PAC is ever more central.

If one lesson stands out from the work of the PAC over the years, it is that Government Departments in any Government are masters of spending public money, but often far less proficient at ensuring that it translates into better public services. It is in keeping with the non-partisan nature of today's debate and of the Committee to say that the problem has plagued Governments of all persuasions over the years. The Committee recognises the difficulties involved and that often the processes are much more complex and much larger than those in the private sector, especially with IT projects. However, some progress has been made. The Committee has commended the Government's efforts to develop more effective services for older people. Our report on emergency hospital care identified a large and sustained reduction in the length of time that patients spent in accident and emergency.

Welcome as such improvements are, for many years the Committee has also pressed Governments to devote greater attention to public sector efficiency as, all too often, they have failed to learn the wider lessons of the Committee's recommendations. While supporting the good intentions expressed by Gershon, the Committee would like to see practical evidence of real-life efficiency savings being realised. Departments are responsible for delivering those savings, and the Government's programme of departmental capability reviews designed to assess Whitehall's ability to implement policy effectively is significant. The Committee has noted many times that policies are too often cursed by weak management and implementation approaches. We welcome the recent development, but we would like more information on how the programme will be taken forward and rolled out.

Despite those welcome initiatives, however, more must be done to achieve value for money in public services. I shall devote the rest of my speech to outlining the Committee's seven recommendations for getting more out of our public services. Hon. Members can study those recommendations in greater depth by referring to the Committee's 17th report of the current Session, entitled "Achieving value for money in the delivery of public services."

The first recommendation is that those responsible should properly prepare and plan project implementation. Successful implementation rests on careful planning that takes into account a programme's risks and business requirements. Now, all that can be just anorak talk, but let us look into some practical examples. The Committee concluded in its report on asylum decisions that the Home Office failed to put in place sufficient staff and structure to cope with a significant rise in asylum applications in 1999 and 2000. In its report on road congestion, the Committee criticised the Highways Agency for installing cheaper, less sophisticated technology in the south-east in order to close a technology gap between the regions on the basis that it would be upgraded at a later date. Had the agency not reversed that decision, it would have cost
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£64 million more than progressively installing more sophisticated technology from the outset. To avoid such fiascos in future, Departments need to draw up realistic timetables and leave plenty of time for planning and detailed specification. The Committee would also like to see greater use of pilots to test schemes before their large scale implementation.

Secondly, Departments must strengthen project management. Time after time, the Committee has come across poorly managed Government projects. One of    the most alarming examples of poor project management was the Government's purchase of eight Chinook Mark 3 helicopters that could not be used because the Department failed to specify the avionics system when it drew up the contract. No doubt the Chinooks have been consigned to some remote aircraft hangar, but it is something of an understatement to say that they are doing very little to promote our national security.

Like defence procurement, IT procurement is all too often synonymous with delay, overspends, poor performance and even abandonment. Encouragingly, our report assessing the impact of the Office of Government Commerce's initiatives on the delivery of major IT-enabled projects recognised the potential for gateway reviews to secure significant improvements in IT procurement. We also called for gateway reviews to be published, and recommended that the Comptroller and Auditor General be notified where IT projects get "double reds" within that process. I am encouraged by the OGC's agreement to our latter recommendation, but disappointed that it has rejected the former.

The Committee continues to recognise the need to strengthen project management capabilities. Departments need more realistic business cases and time scales, and risk must be understood and better managed. Large, complex projects should be broken into smaller, more manageable components, and reliable contingency plans should be put in place.

Our third proposal concerns the need to reduce complexity and bureaucracy. Too often, public services are unnecessarily complex and bureaucratic. For example, the difference in error rates in passport application forms that are checked by the Post Office for a fee and those submitted directly by customers—1 per cent. and 15 per cent. respectively—shows that people have difficulties with that particular form. The Committee has pointed out that Departments have an obligation to make sure that their forms are straightforward and easy to complete. Looking across Government, the Committee has called for the simplification and streamlining of complex processes that increase costs. For example, the structure of the social fund is so complicated that mistakes are made in almost half of the applications for certain benefits.

The fourth recommendation is the need to improve public service productivity. Delivering quality public services rests on their efficiency and productivity. Our report into sickness absence in prisons confirmed that unusually high levels of sick leave were detrimental to the overall efficiency and productivity of the Prison Service. As well as costing the taxpayer around £80 million in 2002–03, sickness absence increases stress and lowers the morale of other staff. In that particular case, I am pleased to note that the Minister recently reported that in nine of the 10 prisons with the highest
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levels of sickness absence as identified in our report, sick leave has been reduced by 36 per cent. since 2002–03, which is an example of a report making a difference.

Much still remains to be done to improve public service productivity. The introduction of resource-based accounting and budgeting is certainly a step in the right direction, because it helps Departments to use their resources more productively and deliver their services more efficiently. Welcome though these developments may be, Departments still have some way to go in improving public service productivity. They need to match resources better to work load to meet the public's demand for services, and they should tackle bottlenecks in service delivery chains.

Fifthly, we believe that Departments need to be more commercially astute. Such measures have already been introduced in Britain's biggest and best companies. Indeed, the Committee thinks that Government Departments can learn a lot from boardrooms throughout the country. When one considers that central civil service Departments alone spent more than £15 billion a year on goods and services, it is vital that they demonstrate that they are commercially astute. All too often we find that Departments are lacking in that area. The Committee reported that fewer than a quarter of procurement staff in Departments had Chartered Institute of Purchasing and Supply qualifications. Of the 20 Departments, agencies and non-departmental public bodies that spent the most on procurement in 2002–03, only three had commercial directors. Their role explicitly covered all corporate engagement with the private sector and the wider business world, as well as procurement strategy.

I am pleased to note that the situation has since improved, but Departments must do more to strengthen their commercial expertise if they are to maximise their assets for public benefit. Across the Government as a whole, the Committee wants Departments to take greater advantage of their buying power to secure better deals, to award contracts on the basis of value for money instead of lowest price and to make greater use of partnership arrangements with suppliers.

Sixthly, there is a need to tackle fraud. Fraud has been a long-term concern of the Committee. In addition to producing a report on benefit fraud, it found during its investigation on VAT that a staggering £11 billion of VAT that is meant for the public purse is going into the pockets of fraudsters, cheats and those making genuine errors. We urged Customs to introduce tougher penalties for evasion and the under-declaring of VAT. We called for it to take full advantage of its merger with the Inland Revenue to improve data matching as a means of identifying traders in the shadow economy.

We also highlighted the problems among European member states on agreeing what actually constitutes fraud. In our report entitled "Financial management of the European Union", we recommended that the UK presidency of the European Union should be used to support the Commission in its action to improve accountability in the European Union through the development of a road map towards a positive statement of assurance. We also called on the Government to press for the simplification of the rules and regulations governing the common agricultural policy and structural
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funds to reduce the scope for fraud and error. Now that the UK presidency has come to an end, can the Minister detail the extent to which the Government have implemented those recommendations? Will he give assurances that the UK will continue to press for those vital reforms during the Austrian and French presidencies and beyond?

Seventhly, I urge the Government to implement policies better and in a more timely way. It is important that they have clearly thought-through implementation plans and reliable information on which to base decisions about new policies. For example, the Committee's progress report on hospital-acquired infection highlighted the worrying dearth of information about the extent and cost of such infections. For example, the regularly cited figure of 5,000 deaths each year due to hospital-acquired infections is unreliable and dates from the 1980s. Good policies and successful implementation rest on the availability of reliable and up-to-date information. It is imperative that Departments understand the scope of problems before they set about addressing them.

As I have outlined, the Committee makes a valuable contribution towards the development of more efficient and effective Government policies. In the coming months, we shall face numerous opportunities to add to our work. We shall continue to deal with the access issues raised by Lord Sharman's report of 2002 on the   audit and accountability of central Government. The Committee is delighted that Lord Sharman's recommendation that the Comptroller and Auditor General be given audit access to non-departmental public bodies that are companies and their subsidiaries has been taken forward in the Company Law Reform Bill. The Committee would like to thank the Treasury and the Department of Trade and Industry for their support on this matter and looks forward to the smooth passage of the Bill in the near future. However, we just hope that similar progress can now be made on gaining full access to the BBC's accounts. The Committee has valued the experiment that has allowed the Comptroller and Auditor General, under special arrangements, to have limited access to the BBC. However, as I have said in the past there should be no limit on the freedom of choice of the Comptroller and Auditor General if the licence fee payer is to be assured of value for money. The expected renewal of the BBC charter, which is scheduled for later this year, provides the perfect opportunity to address the matter.

The Committee's formal agenda includes hearings on the National Audit Office's major defence projects report for 2005, and reports on supporting elite athletes, faster access to better stroke care, the closure of MG   Rover, corporation tax, and improving poorly performing schools, to name but a few.

In conclusion, the distinguished Committee of which I am proud to be Chairman continues to serve the nation well, analysing important and topical issues and recommending practical improvements to our public services. I commend its work to the House.

4.40 pm

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