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The PAC also considered the reduction of complexity and bureaucracy. It is important to see how that is to be carried forward. Examples include reducing the number of funding streams for improving the social housing stock, and rationalising the number of contact centres and local offices in order to share provision across the public sector and reduce duplication through better data sharing.
The PAC concentrated a great
deal on the need to reduce fraud. Improvements are being made to the
operation of the Driver and Vehicle Licensing Agency to cut evasion of
vehicle excise duty. That is projected
to save £140 million a year. The court system is changing the
administration of fixed penalty notices, which will reduce the scope
for defrauding the public
purse.
On implementation, which is another of the overlapping themes, the Department of Health is reviewing systemic delivery issues to improve treatment pathways. That will cut the length of patients’ hospital stays, which should benefit not just the public purse, but patients.
On the two other factors identified by the PAC in its 17th report, improving planning and improving project management, there is no explicit read-across to the plans for the comprehensive spending review. However, the NAO commented on the importance of strengthening Government Departments’ capabilities. That means upskilling staff to raise their capacity to plan and manage complex projects. That is being done partly by upskilling within Departments and partly by strengthening central support and collaboration. For example, the work of the Office of Government Commerce and the introduction of the gateway system, which we have discussed, will no doubt turn out to be important. It could also be said that the process of cross-cutting reviews and zero-based budgeting is part of improving planning and management.
To summarise, when the 17th report by the PAC was published, the Chairman said:
“Given the scale of Government spending just a 2 per cent. improvement in the use of resources could generate savings of£8 billion a year.”
In the forthcoming comprehensive spending review, the Government have gone further, identifying scope for saving 2.5 per cent. a year. Looking at the range of measures and policies, that appears to be completely credible. We have come a long way from the Gladstonian approach—or even the 17th century, candle-ends approach. To achieve that, it will be necessary to re-engineer processes and utilise the procurement scope of the £125 billion that the Government already spend. But I am sure that that will turn out to be possible, and that as the PAC goes on to do further work we will find further possibilities that the Government will be able to make use of.
10.10 pm
Mr.
David Heath (Somerton and Frome) (LD): May I start by
returning to a point that the hon. Member for Gainsborough (Mr. Leigh)
made in introducing the debate? This is no time of the evening for a
debate of such importance on matters that are so crucial to the
efficient governance of the country. The Public Accounts Committee does
a very important job. It produces reports that are of enormous value,
and they ought to be given proper and timely scrutiny by the House.
That is not achieved by a debate such as this in which, with very few
exceptions, the participants are Committee members. I notice that
Members present include the hon. Members for South Norfolk(Mr.
Bacon), for Tunbridge Wells (Greg Clark), for Glasgow, South-West (Mr.
Davidson), for Bishop Auckland (Helen Goodman), for Tooting (Mr. Khan),
for Portsmouth, North (Sarah McCarthy-Fry) andfor Burnley
(Kitty Ussher), and my hon. Friendthe Member for Southport
(Dr. Pugh), as well as the Financial Secretary, who is nominally a
member of the
Committee, and its Chairman, the hon. Member for Gainsborough. If this
debate is only to be an expanded Committee meeting, it fails its
primary purpose. I hope that the Government’s business managers
take note of that and ensure that in future we have a more appropriate
setting for the
debate.
Mr. Bacon: I completely agree with what the hon. Gentleman has just said. If we have to grind on late into the night, I suppose that it is in the best interests of taxpayers that we do so. But has the hon. Gentleman noticed that the Government’s business managers—the Whips—are also Treasury Ministers, and if Ministers on the Treasury Bench are required to stay late this evening, it can only be because of actions of the Treasury itself, and they might think of that in future, before timing a debate in this way?
Mr. Heath: Let us hope so, but I am not entirely sure that the usual channels work in that way.
Let me pay tribute again to the work of the PAC. Its Chairman used the word “assiduity” in terms of his office. Assiduity is one of those words that nowadays have almost solely a parliamentary usage: no one other than parliamentarians talks of being assiduous, justas no one else talks about being churlish. But it is a relevant word: this Committee is assiduous in its approach to its work, for which we are grateful.
I have never had the pleasure of serving on the PAC, but I did serve on what is perhaps an analogous body before I entered the House. I was an audit commissioner, and I know about the important work that was done by the Audit Commission—the sister body of the National Audit Office—and the importance of our reports in improving the effectiveness and efficiency of local government and the national health service.
The other important point to make is that the PAC’s reports are not all about disasters; they are not all about things going wrong. We need to put it on the record that they often point to good practice, and sometimes even excellence, in public services. If we do not recognise that, we give a false perspective of the Committee’s work.
Having said that, it is inevitable that we concentrate on those areas where the Government are performing less well. We have heard mention of areas that I do not intend to pursue. The hon. Member for Portsmouth, North mentioned Ministry of Defence procurement; that has been a long-term concern of mine and I still do not think that we get it right. However hard the MOD tries to improve its procurement, it does not get it right, and too often there are some absurdities in procurement procedures, which we can ill afford. Not only do they cost money; they reduce our armed forces’ effectiveness and sometimes put them at risks that they should not face, simply because of the lack of correctness in procurement procedure.
Nor am I going to go into
national health service IT procurement. I assume that the hon. Member
for South Norfolk was discussing earlier the 17th report’s
reference to NHS IT, and that that was why his entire speech was in
order. I want to echo some of the concerns that he expressed by
pointing out that whenI met my local medical committee of
general practitioners in Somerset last week, top of their agenda
was their concern about the NHS IT contract’s effect on their
practices. We in this House should be aware of that
issue.
I do want to mention the Home Office, and I share many of the concerns that have already been expressed. The 34th report, on returning failed asylum applicants, was the first crack that caused the entire edifice to collapse, and not before time. The Home Office has been underperforming in management, service delivery and, as we have already heard, accountancy procedures for far too long. The hon. Member for Portsmouth, North mentioned how often pilot schemes were progressed without assessing the results. No Department is more guilty of that than the Home Office, which is for ever starting pilot schemes and rolling out the relevant programmes across the country—sometimes with disastrous results—before the schemes have even run their course, let alone before the evidence has been assessed. We see that in legislation, as well; sometimes, legislation is amended before it has even come into force. That is not the right way to run a Department of such importance to the country, and I do hope that the new Home Secretary is getting to grips with it, but I fear that the early signs are not good. We must wait to see what happens in the days and months to come.
I turn to a perhaps less obvious report—the 40th, on efficiency in water resource management in the Environment Agency. I have a particular and personal interest in water resource management, as I live in a village where we have been given notice of discontinuation of our water supply by the Duke of Somerset. I want to stress the huge strains that are being put on the Environment Agency, a body for which I have a great deal of time, and which does absolutely essential work. My contention is that the increasing costs of flood management are preventing it from doing a lot of the other work in mitigation of environmental damage that it ought to be doing. In particular, it is unable to provide the level of resources for environmental protection that it should. I hope that the Committee will return to that issue and the question of the distribution of resources. It madethe point in the 40th report that there was a blurring of the resources applied to water resource management and to flood defence. In fact, that is a wider problem within the Environment Agency, and, because I want it to do the best possible job, and because I know the demands being put on its limited resources, it is worth exploring further.
I turn to one other use of the Environment Agency’s resources that came to my notice a few days ago. A couple of websites belonging to the agency—or, more accurately, to the “Asiantaeth yr Amgylchedd Cymru”, which is the Environment Agency Wales—have devoted an entire page to the
“Nentydd Mells, Whatney a Nunney”,
“Somerset Frome yn Whitam Friary a Frome.”
Being translated,
that is the Mells stream in Whatley and Nunney and the River Frome in
Witham Friary, my home village, in my constituency. In none of those
three villages do we have a monoglot Welsh speaker,
and I am not entirely sure that it is a proper use of resources to use
translating facilities to provide individual websites for flood defence
and flood protection information in Welsh for my Somerset
villages.
I know that we are quite near to Wales. I suppose that we are a Marcher county. I strongly support the view that there should be Welsh information for Welsh people in Wales. However, I do not believe that it is a sensible use of resources to provide information in Welsh about flood levels in villages in Somerset, because we find it difficult to assimilate that information. The Committee might like to consider that. Perhaps the issue should have been incorporated in the report “Lost in translation?” which was actually on an entirely different subject.
Lastly, I will deal with tax credit fraud. It is an inevitable area of concern. Exactly a year ago today, when the Committee issued its fourth report, it was slightly optimistic about fraud. It reported:
“The Department has made good progress in reducing losses from fraud and error”.
Unfortunately, the Department in question was the Department for Work and Pensions; the tax credit system is operated by the Treasury through Her Majesty’s Revenue and Customs. We have the thirty-seventh report on the Inland Revenue and I see within it a great deal of concern expressed.
We had the original estimate of £460 million of fraud in the tax credit system. We know that that has now increased to about £1.28 billion in the first year. We know also that the signs are that in the second year of operation the figure will be as high again. Further, we know that £131 million of taxpayers’ money has been lost to organised fraud—to gangs working in collaboration, it would appear, with civil servants, although that is yet to be established, to defraud the Exchequer. In addition, we know that in the third year of operation the overpayment of tax credits—a point made by the Chairman of the Committee—is likely to be about £1.8 billion. So many unhappy people have been given money which they unwittingly received, not knowing that they were not entitled to it, and have suffered the consequences of having that clawed back. Sometimes that has caused great hardship to families because the money was inevitably spent on children’s clothes, Christmas presents or whatever was required in the household.
In the first three years of tax credits, £5.8 billion has been overspent and £2.4 billion has been lost in fraud. There is at least a strong suspicion that this was known to the Department back in 2004, and yet the ePortal, which is thought to be the main occasion for fraud, was not closed until December 2005.
There is still a sense of denial on the part of the Treasury about these facts. There is concern that it has not come to grips with its under-performance in dealing with the matter. Yet £1 in every £10 in this system is lost through error and fraud. That being so, I think that we are entitled to ask why better and more stringent action was not taken at any early stage. When the Comptroller and Auditor General has to qualify the accounts of Her Majesty’s Revenue and Customs year after year, of all the Departments in the panoply of state, there are serious questions to be asked.
I close by taking up a point that the Chairman of the Committee may have raised slightly out of order in that it was referred to in a report that was published only today and is not part of our consideration. I will follow the hon. Gentleman’s lead by at least mentioning what he said. He used the phrase, “Getting it right the first time”. That is a key part of delivering good public services. Time and again in our constituencies we as individual Members see examples of the inability of public services to get it right first time, occasioning people to come to our advice surgeries or write us letters that require us to write letters on House of Commons notepaper, and miraculously what was not right the first time is then sorted, because a Member of Parliament has written to the chief executive of the agency concerned and that then descends through the bureaucracy like a brick until it hits some poor unfortunate who then has to recalculate the figures and get it right. It should not be like that. People should have the expectation and right that Government Departments will make the calculation to get it right first time. Until we have systems that make sure that that is the case, we are failing our citizens.
Yet again I congratulate the Public Accounts Committee on all its work in highlighting cases where the Government Departments do not get it right, in the hope and expectation that improvement will come. I hope that I am as optimistic as the hon. Member for Bishop Auckland (Helen Goodman). I am not sure that I am. She sees a bright new future for Government as a result of the reports. I hope that that is the case because it is in all our interests that it is the case, but I express a little cynicism and a little pessimism, but let us hope that there is at least some incremental improvement, and that the PAC has helped that process.
10.26 pm
Mr. Sadiq Khan (Tooting) (Lab): I begin as other colleagues have ended, by paying tribute to Nick Wright, Chris Randall, Emma Sawyer and Ronnie Jefferson who run the Committee’s office so efficiently, and also to the Comptroller and Auditor General,Sir John Bourn, and his team at the NAO, who really are top drawer. I note the time, so I will focus primarily on two particular reports in the motion, the 22nd and the 37th reports, that may not otherwise receive the attention that I believe they deserve.
Last time we discussed a PAC report in January 2006, the Financial Secretary described our work as a tour de force. However, it is not just the Financial Secretary or the Treasury who take an interest in our reports. It is not even the “Today” programme, which cherry-picks and selects the most outrageously critical comments of the Chairman against the Government, which has an interest in the work that we do. What is remarkable is how non-governmental organisations, pressure groups, constituents and other Departments take an interest in our work, and the work that we do provides an opening or a springboard for things that they can do.
The 22nd report was
one such report. The Chairman in his comments talked about the impact
on the end user, and the 22nd report is a good example. That report was
on the subject of maintaining and improving Britain’s railway
stations. As all constituents
in Tooting will know, I have been campaigning for improvements in
Earlsfield station in my constituency for some time now. At the
beginning of this month, a help point was installed, which enables
disabled passengers to utilise a free taxi service that
willtake them to an accessible station. This followed
confirmation that I received at the Committee meeting on 12 October
that the Association of Train Operating Companies would be investing
£600,000 to improve such facilities across the network, and
train operating companies such as South West Trains have followed that
lead.
However, in its report the Committee highlighted the fact that more than half of the country’s stations are not fully accessible to the disabled. That led me to table early-day motion 911, which 141 colleagues have signed, although one or two Committee members still have not done so, and I highly recommend them to do so. The situation highlighted by our Committee and by the early-day motion is clearly unacceptable. Therefore, as I said earlier, I welcome the Department for Transport’s commitment to invest £370 million over the next decade to address the issues that we raised, which are in breach of the Disability Discrimination Act 1995.
I was disappointed that Earlsfield was not included in the 47 stations initially chosen for the study, but I am pleased about the objectives outlined in the railways for all strategy. Once again, I would like the Committee to take some of the credit for the conclusions that that strategy reached. It called for improvements to be made in a shorter time frame, and our report highlighted that insufficient attention had been paid to the quality of stations. Now that the Department for Transport is responsible for stations strategy, I hope that it will respond accordingly to that recommendation.
Station security is another important area that the Committee investigated, and I note that my hon. Friend the Member for Brent, South (Ms Butler) will hand in a petition tomorrow highlighting concerns that we first raised in our Committee. Balham station in my constituency particularly concerned me, and I raised the matter in Committee, because there appeared to be complacency about passenger security. Our Committee highlighted the point that few train operating companies had joined national schemes to improve security and reduce crime.
The report cited the three most reassuring facilities for passengers—the presence of staff, effective lighting and closed circuit television. I acknowledge that the Treasury has contended that improvements to personal safety will only increase train usage by approximately2 per cent., as opposed to the 11 per cent. figure quoted in the report, but that does not reduce the significance of safer stations, and I am sure that I speak for hon. Members on both sides of the House when I say that the safety and security of our constituents is of paramount importance.
The report also confirmed that the original franchise agreements failed to place suitable emphasis on the improvement of facilities. I therefore welcome the Government’s increased expectations regarding station security within future franchise agreements. Investment in British Transport police increased by 24 per cent. in the past year, as the issue began to receive the necessary recognition.
The Committee also highlighted the complicated and inflexible procedures employed by Network Rail, which many see as an obstacle in the path of improvement to station services. The majority of our stations around the country are more than 100 years old, and approximately 15 per cent. of them are listed buildings. Moreover, as I learned at first hand, too many organisations are responsible for station maintenance. I understand that work is under way on a new stations’ code to establish more effective contractual arrangements, and I believe that that is essential if stations are to make progress on maintenance, security and facilities.
The hon. Member for Somerton and Frome(Mr. Heath) has mentioned the Committee’s 37th report, “Inland Revenue Standard Report: New Tax Credits”, and my hon. Friend the Member for Portsmouth, North (Sarah McCarthy-Fry) has mentioned the 36th report, which is connected to it. When we questioned the chairman of HM Revenue and Customs on 14 December in Committee, I established that tax credits had the highest take-up of any benefit delivered through a credit system. Tax credits benefit at least 3,600 families in my constituency and a total of 6.1 million families nationwide, which include 10 million children. I understand from the evidence that we heard and from the excellent questions that I asked—
Mr. Davidson: You did.
Mr. Khan: From a sedentary position, my hon. Friend has complimented my questioning, and I thank him for the compliment.
Kitty Ussher: So do I.
Mr. Khan: Another hon. Friend has also complimented me.
I understand that the take-up rate is particularly high among low-income families at 93 per cent. compared with only 47 per cent. for the old working families tax credit. I welcome the commitment by the Government, the Treasury and HMRC to improve the efficiency of tax credit administration. The problems associated with overpayments highlighted in the report have prevented that laudable scheme from receiving the praise that it certainly deserves. Overpayments are inherent in the system, because of the provisional nature of the awards. I have been assured that HMRC is confident that the changes implemented by the Government, which are outlined in the report, will ensure that overpayments are significantly reduced. The disregard for income increases has been raised from £2,500 to £25,000, and claimants must advise HMRC of changes in their circumstances within one month.
The report also raised concerns about error and fraud. The hon. Member for Somerton and Frome has touched on those concerns, and I will not rehearse his points.
Mr.
Heath: I sincerely hope that HMRC is coming to terms with
improving the system to prevent fraud.
However, some constituents have told it several times about changes of
circumstance, but nothing has happened—it is as though the
letters have disappeared into the ether—which means that they
are still overpaid, despite having done everything that they can to
notify it. Is that not a cause for some
concern?
Mr. Khan: Absolutely. The permanent secretary who gave evidence to our Committee took that on the chin and said that the Department will not seek to recover whatever payments are made through no fault of the claimant. That is some comfort to the distressed constituents mentioned by the hon. Gentleman.
As we heard in our evidence, increased attempts at tax credit fraud resulted in the website being closed down. I welcome the Government’s decision to double the number of pre-payment checks before issuing a tax credit award. The Committee was reassured that the majority of attempts to commit identity fraud through the tax credit system were prevented. Nevertheless, I am pleased that HMRC will now be more proactive in contacting certain claimants. The Financial Secretary has taken this issue very seriously, as has his Department. Nevertheless, it is important to maintain the right balance between keeping the system user-friendly, thereby maintaining a high take-up and helping the most vulnerable in our communities, and preventing fraud and overpayments.
Mr. Davidson: May I say that the excellence of my hon. Friend’s questions is matched only by the magnificence of his speeches? Does he agree that the PAC offers the only forum where it is possible to have a non-partisan discussion about a scheme such as tax credits, which provides an enormous amount of benefits to a large number of people yet has some clear difficulties and problems? In the Chamber, we often end up with yah-boo politics that generate a great deal of heat but very little light as regards clarifying the difficulties.
Mr. Khan: I am grateful to my hon. Friend, and would recommend three sources that confirm what he says. First, the report prepared by the NAO was based on facts and figures rather than dogma. Secondly, the transcript of our evidence, including the questions asked by the Chairman and other hon. Members on both sides of the House, concerned the process and implementation of the scheme rather than the party politics. Thirdly, the PAC report was very balanced and dealt with the facts, problems and challenges while recognising the benefits in a non-party political way. It is a shame that, the day after our report was published, the “Today” programme decided to cherry-pick the criticisms, not the excellent and balanced parts that were of a non-party political nature.
I should like to end with a couple of words of caution. First, an issue raised in January this year has still not been dealt with—namely, that very good reports are being produced but they are produced too long after the initial NAO reports. When our Chairman wound up the previous debate, he said that he would look into that. I think that a huge amount of progress still needs to be made.
Secondly, the
purpose of the PAC is to provide parliamentary scrutiny of the
Executive, but that does
not mean that it always needs to be critical. The hon. Member for
Somerton and Frome—I think that I have quoted him three times in
my speech, which must be a record, and always with a generous
interpretation of his words—highlighted good practice, best
practice and excellent practice that appear to have been lost. I am
concerned that in providing parliamentary scrutiny of the Executive,
the PAC may be seen merely to be critical when it will sometimes be
complimentary. That may lead to our Committee being perceived in a way
that is unhelpful to those who give evidence, and those of us who are
members may become cynical in that regard. Witnesses, who often want to
come and be open and get to the root of the problems, may become wary
of doing so because of our reputation.
I hope that the experience of the past 300 years will continue in terms of the spirit of our Committee in providing scrutiny, some good and some not so good.
10.39 pm
Greg Clark (Tunbridge Wells) (Con): At this stage of the debate, everything that ought to be said has been said, but not everybody has said it. I shall therefore follow suit and praise the chairmanship of my hon. Friend the Member for Gainsborough (Mr. Leigh). He is an indulgent Chairman to Committee members but a fearsome Chairman in the eyes of witnesses. I remember, with a mixture of horror and admiration, his intervening on one witness, whose answer was full of circumlocution, to tell him that he was speaking drivel and that, if he did not do better in the next half hour, he should not go further. It will take me many years to reach that admirable level of intolerance of waffle. I have greatly enjoyed serving under my hon. Friend’s chairmanship.
I pay tribute to the National Audit Office underSir John Bourn. It, too, chooses its words carefully and I often marvel at the understatement with whichit delivers withering judgments. Using the word “disclaim”, which my hon. Friend the Member for South Norfolk (Mr. Bacon) mentioned, is a modest way in which to pronounce a devastating verdict on a set of accounts. Perhaps that serves as a totem forSir John’s approach. We all know what he means, but he expresses it diplomatically.
May I also put on record my appreciation of the work of the Committee staff and the Treasury representatives, who respond to questions that are often naive, at least on my part, with enthusiasm and helpfulness, which often goes beyond the call of duty?I am grateful for that.
I intended to praise the speech of the hon. Member for Tooting (Mr. Khan), but in the light of his comments, perhaps I should give way so that he can praise his own contribution. However, he always makes a lively contribution in the Committee and he has done that again tonight.
Given the lateness of the hour, I want to comment on only three subjects that we have considered: the BBC; our report on competition, which was directed at the Office of Fair Trading, and the report, which several hon. Members mentioned, on tax credits.
The Chairman referred to our
perennial plea to be given oversight of the BBC, or least to allow the
National Audit Office access. I want to reinforce that. I
should perhaps declare an interest because I worked for the BBC in a
previous existence. One of my duties was being the point man who
haggled with the NAO about what went into its report on the World
Service, which is the one part of the BBC to which the NAO has
unfettered access. I know from that experience that there is no
question that the NAO’s scrutiny of that part of the BBC
compromised its editorial or political integrity. It was entirely
proper that the use of public money be scrutinised in that way. The
contention that NAO involvement exposes the BBC to excessive political
interference is frankly nonsense.
It is disappointing that the Green Paper, which became a White Paper and is shortly to become a BBC charter has given way in almost every respect to the BBC’s demands but not to those of Parliament. I do not know what insight that provides into the Government’s thinking, but it is regrettable.
Our report on the BBC had a worthy subject—the expansion of White City—but it is not one of the more central subjects. I hope that, if the NAO has unfettered access, we might consider issues such as the BBC’s investment in digital and online services and its commercial services in our debate next year or the subsequent year. Such matters go to the heart of the appetite for proper public scrutiny of the BBC.
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