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Secondly, once demanded, public services should be delivered as promptly as possible. Failure to do so can cause inconvenience, hardship and disruption, and, at its most serious, put lives at risk. Over the years, the
Committee has repeatedly highlighted the importance of getting it right first time in benefit decision making, which means making decisions quickly and accurately to guard against clogging up the system with appeals and revised benefit assessments.
Thirdly, public services should respond to the needs of users, which is obvious but is not always done. Failure to take into account what people want can result in unsuitable services that cause inconvenience, dissatisfaction and, sometimes, hardship for users. To design services around the needs of users, providers must first have a thorough understanding of what users want. Incidentally, all these points are illustrated by practical examples in the report, but there is no time to go through them now.
Fourthly, public services will ultimately fall short of expectations if users and providers fail to communicate effectively with each other. Call centres are one increasingly common way for people to communicate with public bodies, but they are also an increasingly common cause of frustration and dissatisfaction with public services. Our investigation of tax assessment found that some staff on telephone helplines lack the detailed knowledge to respond consistently and accurately to inquiries.
Fifthly, public services need to set and meet high standards. One way to improve the quality of public services is to introduce appropriate incentives and targets. For example, the Committee recommended the greater use of financial penalties to drive up the standard of facilities in Britain’s railway stations. I was so appalled by the disgusting state of Market Rasen station in my constituency that I brought my own incriminating photographs to the hearing, where a panoply of highly paid members of the railway establishment were in front of the Committee. My photos of waiting room graffiti captured the squalor pretty well and, although I do not have the photographic genius of Robert Capa or the hon. Member for Great Grimsby (Mr. Mitchell), they made a difference and things have changed. Standards in public services can also be improved by involving public service providers that are capable of meeting the diverse needs of different groups in society.
Finally, even if standards are world class, people will not be happy if services cost what they consider to be too much. As a consequence, providers must publish, publicise and contain costs. And users of services need to know about the costs that they will incur. People must be told how much they will pay when, for example, they contact a public service by telephone. It is also important that money is not wasted. Some money never makes it to a programme’s front line, because it is swallowed up in management costs. For example, about one third of Learn direct funding went on overheads in 2004-05, and the Committee urged UFI—the University for Industry—to channel that money towards learners instead.
By outlining the Committee’s recent findings on users’ experiences of public services—some positive, some negative and some highlighting areas for improvement—I hope that we have contributed to the debate on the effectiveness of increased spending on
public services, which is helping to inform the Financial Secretary’s work on the comprehensive spending review.
In my final few minutes, I want to move on to explore some important developments in other aspects of the stewardship of public money. In January, the Comptroller and Auditor General issued a disclaimer on the Home Office accounts, which were not only riddled with errors but delivered too late for his staff to audit in time. Such a disclaimer is virtually unprecedented in relation to a great Department of State. It is extraordinary, not to mention deeply concerning, that such an organisation should fail so spectacularly to render its accounts to Parliament.
The Home Office invited yet more accusations of incompetence following the Committee’s inquiry into returning failed asylum applicants. The sheer perseverance of the Committee, particularly my hon. Friend the Member for South Norfolk, brought this to light. We not only highlighted a serious immediate threat to the well-being of the public but pointed to what the former Home Secretary was compelled to describe as “a serious systemic failure” in his Department’s ability to understand what was happening with foreign national criminals. The Government aim to address the clear need to improve the performance of Departments for their departmental capability reviews. I look forward to assessing those reviews and their implementation in the coming weeks and months.
We welcome the other developments that will give the Comptroller and Auditor General more opportunities to ensure the wise spending of the nation’s money. It is encouraging that HM Treasury has asked the National Audit Office to review the economy, efficiency, and effectiveness with which the Financial Services Authority has used its resources when discharging its statutory functions.
We note the progress of the Company Law Reform Bill, which will give the Comptroller and Auditor General the right to audit non-departmental public bodies that are companies. We are pleased to see the continuing progress of the National Lottery Bill, which will finally give the CAG access to the information that the National Lottery Commission holds for the purpose of vetting people involved in running the national lottery.
We always return to the BBC in these debates—and why not? The Committee would like assurances regarding the CAG’s access to the BBC and to central Government money channelled through local government. It is with great interest that I note the discussions between the Department for Culture, Media and Sport and the NAO regarding the establishment of a baseline against which to judge the BBC’s future efficiency programme. I welcome the Government’s recognition that the NAO should have an expanded role in assessing the BBC’s value for money, but I urge them to do more to enhance parliamentary scrutiny of the BBC. It is ludicrous that the CAG should not have freedom to select the topics that he wishes to examine. We cannot have a situation whereby what is in effect a public body is spending £3 billion-worth of public money, and the main external auditor on the behalf of the taxpayer—the CAG—has to go cap in hand to the BBC to agree a
programme of investigation. He should have the right to go where he wants. As the Government introduce different funding mechanisms for local government through local area agreements, it is imperative that proper parliamentary accountability of these funds remains.
Following the Committee’s recent visit to Washington DC, where Congressmen have far more power over appropriation than we do, it is clear that there is scope to improve parliamentary scrutiny of Government spending plans. We wrote as a Committee to the Chairman of the Liaison Committee, the Father of the House, who is also a member of our Committee—I pay tribute to his work on it—proposing that departmental Select Committees devote more time to the scrutiny of expenditure plans. We also drew his attention to the willingness of the NAO to provide support for that. We discussed this in the Liaison Committee last week—I hope that I am not giving anything away—and interest was expressed. The Hansard Society has published a report on the subject, and we have our own PAC report on it. I agree that we will never—or not rapidly—move to a situation whereby we are like Congress, where the President proposes but ultimately Congress disposes, with line- by-line control of the budget.
Nevertheless, there must be some progress towards returning to Parliament’s traditional role. I cited the 17th century, when this sort of debate produced a civil war. Nowadays there is virtually no line-by-line scrutiny of the estimates. That is a worrying shortfall in what Parliament’s work should be about. If we can provide other Select Committees with more help from the NAO, we will not magically persuade the Government suddenly to give Select Committees line-by-line procurement powers. However, if they can at least set up the processes and have the knowledge, it might be possible for the Government, or a future Government, to start creating more interest in the appropriation procedure and business. Parliament is fundamentally about that and was set up to perform that function.
I have given a brief outline of the Committee’s valuable and challenging work in the past six months. I expect our work in the next six months to be just as challenging and, I hope, valuable, with investigations into a wide range of topical issues, including NHS financial management.
David Taylor (North-West Leicestershire) (Lab/Co-op): The hon. Gentleman has led the Public Accounts Committee with distinction, and some of the reports satisfied Parliament about the economy, efficiency and effectiveness of public expenditure in five sixths of the United Kingdom—the country of England. Does he believe that he has adequate powers to focus on the public expenditure that is funded by the generous Barnett formula in Scotland, Wales and Northern Ireland?
Mr. Leigh: I may have personal views, but I am supposed to express those of the Committee. I am told that there is an adequate Public Accounts Committee in Scotland and similar mechanisms in Wales.
Mr. Jim Devine (Livingston) (Lab):
The Public Accounts Committee in Scotland is good. When the
Conservative party was in power, it introduced the internal market into the Scottish health service. It surprises me that Public Accounts Committee reports do not mention the public sector’s purchasing power. There were 32 different prices for cornflakes, and the Conservative Government extended that to beds, bandages and breakages. The internal market in the health service gave the private sector a licence to print money. Does the hon. Gentleman agree that the public sector should standardise its purchasing policies, whether in local government or the health service, for chairs, beds, pens, tables and so on?
Mr. Leigh: Of course I agree. I give the Government credit for setting up the Office of Government Commerce. There has not been time to deal with that vital issue in my few remarks but we all agree with the hon. Gentleman that what he outlines is an extraordinarily important part of saving public money, and that a great deal of progress remains to be made.
In the next six months, we shall consider NHS financial management, the Rural Payments Agency, including the single payment scheme, which had all sorts of problems, and the Child Support Agency. Our distinguished Committee has been a force in ensuring that taxpayers’ money is spent wisely and effectively. I commend its work to the House.
9.17 pm
Sarah McCarthy-Fry (Portsmouth, North) (Lab/Co-op): One of the frustrating aspects of the Committee’s work is the time lag between our hearing, the subsequent reports and the Treasury’s response. In January, when Public Accounts Committee reports were previously debated on the Floor of the House, I found myself, as a new member of the Committee, in an interesting position because I had not participated in any of the hearings on the reports that we were discussing.
Today, however, I have seen the process through with many of the reports, from the initial National Audit Office report, through the PAC evidence sessions, to the publication of the report and the Treasury response. It helps when we see the whole picture. However, it requires an efficient filing system because it is impossible to retain in one’s head the burning issues that we discuss at hearings. If one does not keep a good record in notes, the issues can get lost in the mists of time, because we meet twice a week to consider a most diverse range of subjects—unlike other Select Committees, which, as the hon. Member for Gainsborough (Mr. Leigh) said, home in on a specific aspect of a particular Department and spend several weeks delving into minute detail.
We, on the other hand, fly at 30,000 ft, twice a week diving down and swooping back up to move to the next Department and the next subject. Although that approach means that we cover much ground, it sometimes feels a bit superficial. I am pleased that, in the past year, we have spent some deliberative time outside hearings, trying to pull together some common themes. I should like us to do more of that.
Our most recent session, when we reviewed the work programme of the National Audit Office for the next couple of years with Sir John Bourn, was most
valuable. Our work is a partnership with the NAO. I particularly welcome the new appendix to that report, which looked at the risk factors involved in the various areas that the NAO was considering.
It is easy for us to get on our hobby horses when deciding what issues we shall hold hearings on. We all have our pet projects and our pet Departments. However, our time is limited, and we should prioritise our hearings to cover the areas of highest risk. Time and again, we criticise Departments for not taking a risk-based approach, so it is only right that we too should take such an approach to our work.
While reviewing our work over the past six months, I should like to pay tribute to the Chair of our Committee, the hon. Member for Gainsborough, who has, as ever, been assiduous, courteous and charming in his chairmanship. I would also like to thank Nick Wright for his invaluable help as our Committee Clerk, and all the staff at the NAO.
We have a wealth of reports before us today demonstrating the sheer scope of our work, which reaches into every Department, enabling us to fulfil our function of ensuring that the taxpayer is getting value for money, exposing weaknesses and recommending improvements in the process—but of course not the policy—of government. As a member of the party that is in government, I see my role as that of a critical friend. I of course believe that the policy is right; I therefore have a vested interest in making sure that it is delivered effectively. Because of that, I want to focus on two reports today. The first is the 17th report, “Achieving value for money in the delivery of public services”, from which I want to pick up on the theme of complexity, and move on to the 36th report, entitled “Tackling the complexity of the benefits system”.
Before I home in on those reports, however, I want to say a few words about the Committee’s visit to Washington and Boston earlier this year. Once again, I must thank the Committee staff, particularly Nick Wright and Christine Randall, who accompanied us and made sure that we were all in the right place at the right time, even the hon. Member for South Norfolk (Mr. Bacon), who usually managed to be last. It was interesting to see the different approach taken to financial oversight there. In many ways, that reflected the different structure of a separately elected President and his Executive, who can be in conflict with the separately elected Congress. That is all very different from our parliamentary system, in which the Executive derive their power from their majority in Parliament.
It would not be easy to replicate the financial scrutiny and overview of the American system, but like the hon. Member for Gainsborough, I certainly came away thinking that there could be improvements in the way in which Parliament undertakes financial scrutiny of future expenditure plans. I am looking forward to the responses from the Liaison Committee, the Modernisation Committee and the Public Accounts Commission to the proposals put forward by our Chair for departmental Select Committees to devote more time to the scrutiny of expenditure plans.
I shall move on to the two reports on which I want to focus today. The 17th report, “Achieving value for money in the delivery of public services”, is
fundamental to our work in the Public Accounts Committee. Incidentally, I believe that the report that was published today is also fundamental, but I understand that it is outside the scope of the motion, so I shall not refer to it. The 17th report is an example of how we have consciously stepped outside our role of diving in from 30,000 ft and tried to draw together wider themes over a 10-year period. We deliberately chose a 10-year period so that the report would straddle different Governments and phases of government.
One of the encouraging things to come out of the report is that the great majority of the Committee’s recommendations over the years have been acted on. Despite that, however, it is disappointing to note that lessons do not seem to have been learned across other Departments, as the same themes come through in different reports. Seven factors have been identified as needing greater progress, but I shall concentrate on just three: the lack of adequate project management; the fact that there are not enough pilot schemes prior to implementation; and the need to reduce complexity and bureaucracy.
In our last debate in January, I drew attention to the importance of project management, particularly in regard to Ministry of Defence major projects. That is reinforced in this report, which highlights the MOD support vehicle projects, in which the Department decided to proceed without a formal assessment phase, resulting in a slippage of 19 months. This was not because the Department lacked a proper procedure. The smart acquisition procedures were in place; they were simply not acted on.
There is an example in the report from my own constituency. The Home Office had allocated funding to the Portsmouth Partnership for a CCTV and automatic number plate recognition system in December 2002, but required the funds to be spent by the year’s end. The subsequent rushed procurement and lack of testing meant that the new systems were not operational until August 2003. There needs to be recognition at departmental level of the practicalities involved in implementing recommendations on the ground.
When we look at pilot projects we see in many reports that either they have not been used or, if they have been used, lessons have not been learned from them. Pilot schemes are crucial for picking up practical issues that may not be apparent in the design stage, but they are of no use if the results are ignored.
Dr. John Pugh (Southport) (LD): The hon. Lady is being a little unkind to the Government. Why, only today, they have decided on a pilot scheme for home information packs, rather than going ahead with the real thing! Is that not learning a lesson?
Sarah McCarthy-Fry:
I quite agree that there are instances of pilot projects working well. There is an example in one of our reports of good practice in the Treasury building project, demonstrating how advance planning can reduce risk. I am saying that there have been instances where pilot projects have not worked very well or where lessons have not been learned. If we look at the potential schemes for individual learning accounts in the Department for Education and Skills,
we see that during the pilot stage none of the schemes worked, so a completely different scheme was implemented which had no testing at all and was rushed through, resulting in a system prone to fraud which cost the taxpayer about £67 million.
Moving on to reducing complexity and bureaucracy, we come up against an inevitable tension between the Government policy of targeting public money at those most in need and the inevitable complexity that that brings. Sometimes the complexity and bureaucracy go beyond that tension, and our report highlights the South East England Development Agency in my region, where there were more than 40 different funding streams, each with separate monitoring and evaluation criteria. That led to SEEDA having to set up a brand new initiative just to help applicants wade through the process.
Our 36th report focused on complexity in the benefits system. As I said, complexity is inevitable when one targets benefits as well as preventing fraud and abuse and making sure that public money goes where it is most needed. The immediate response is, “We must simplify things,” but as our report points out, simplification is not an easy option, and it means a trade-off with affordability, fairness and targeting. That is not to say that there is not much more that can be done.
Let us consider the letters sent out by the DWP. Our report highlighted the difficulties that people have had with written communications, as well as the fact that nothing has improved much over the past six years. I am sure that I am not alone in having constituents at my advice centre who have struggled through the complexity of applying for the benefits to which they are entitled, only, when they get those benefits, to receive letters that they simply do not understand.
Mr. Sadiq Khan (Tooting) (Lab): Was my hon. Friend surprised by the evidence that we received that potential recipients of benefits which other Departments were implementing would not receive that advice because it was a DWP project, rather than taking a holistic approach, with people attending advice sessions at which they could receive advice from different Departments, which seems the obvious thing to do?
Sarah McCarthy-Fry: I entirely agree, and that need for a holistic approach came through in the briefings that we received from Citizens Advice and the Child Poverty Action Group.
Greg Clark (Tunbridge Wells) (Con): I agree with the hon. Lady that the complexity of the benefits system is to a certain extent inevitable if there is targeting, but one of the consequences is that organisations such as Citizens Advice have a great increase in their work load. Does she agree that it would be reasonable, in introducing changes to the benefits system, to give some resource to the Citizens Advice to enable it to cope with the inevitable increase in its work load?
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