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The second report that I want to focus on is on improving poorly performing schools in England. All MPs have primary and secondary schools in our constituencies, so we are all interested in this report. We examined poorly performing schools, the development of relationships between schools and other organisations,
strengthening school leadership and dealing with deep-rooted failures. It is worth looking at the context of the report. Earlier, I referred to the massive public investment of the past 10 years, and although there have been significant concerns about inefficiencies, now for the first time we have the data that will enable us to examine what has been happening to schools and whether improvements can be made.
In conclusion, there are thematic lessons that can be learned from the work of the PAC, and my hon. Friend the Member for Bishop Auckland referred to some of them. In a previous PAC debate, the Chairman told us of his discovery that the first PAC meeting was held not in Gladstone’s time but in 1690. Tongue firmly in cheek, the hon. Gentleman also told us of his concern that he could not find a Treasury minute of that first meeting. I hope that my colleagues on the Treasury Bench will have heard the concerns about time lags raised by me and other PAC colleagues and that there will be fast progress so that we can reap the rewards of the PAC’s work and learn lessons from it.
2.29 pm
Mr. Philip Dunne (Ludlow) (Con): I am grateful for this brief opportunity to address the House. As a new member of the Committee, I was not present for much of the time when these reports were under consideration, so I do not feel qualified to comment on them. However, I want to make a few quick points to address two themes that other Members have touched on, including the Chairman of the PAC.
The first point is the issue of responsibility. Too often, when there is a problem and individuals from a Department or agency who are responsible for creating it or for overseeing the Department or agency are asked to come before the Committee, we find that they have either been shuffled off to another Department or given another responsibility. The people who actually appear before us can then hold up their hands quite legitimately and say, “Not my problem, sir, although I recognise that there was one”. That is a particularly unsatisfactory means of holding individuals to account. The most extreme example relates to the chief executive of the Rural Payments Agency—mentioned by the Chairman. The individual concerned refused to appear before the Committee. I hope that the House will look carefully at the responsibility of accountable officers to appear before the Committee when required to do so in such cases.
Another issue arises in relation to ministerial responsibility. Again, the most extraordinary situation involved the RPA. Despite a record fine imposed by the EU for the RPA’s mishandling of the single payment system, the Minister who was ultimately responsible—the Secretary of State—found herself promoted to Foreign Secretary. Of course, that may be more a reflection of the political manoeuvring to succeed the Prime Minister and of his wanting the right allies in place than of the right hon. Lady’s responsibility for doing her job.
I want to refer in particular to the report on the Olympics. It is extremely encouraging that the PAC will regularly review that substantial public spending
commitment. I speak as a recently appointed vice-president of the London 2012 cross-party group, so I am a supporter of the Olympics. In the nether reaches of the NAO report, there was a reference, which was not picked up during the hearings, to the funding implications of cannibalisation of lottery proceeds as a result of the requirement to fund the Olympics.
We did not touch on that matter during our hearings on the first Olympics report as they took place before the budget was reassessed, but I draw the attention of the NAO to paragraph 48 of the report of 2 February, which noted the estimate that 59 per cent. of Camelot’s £750 million funding stream might come from players switching from existing games. The report states that in fact 77 per cent. of games money was being cannibalised and the discrepancy would be significant for other good causes, especially bearing in mind that an extra £400 million will be needed from the lottery to fund the Olympics. I look forward to encouraging the NAO to scrutinise that matter in greater detail in its subsequent reports so that we have a proper picture of the impact of lottery funding for the Olympics on other good causes.
2.33 pm
Mrs. Theresa Villiers (Chipping Barnet) (Con): I pay tribute to the work of the PAC and its Chairman, my hon. Friend the Member for Gainsborough (Mr. Leigh). As we have heard this afternoon, the Committee carries out an invaluable role in scrutinising the spending of taxpayers’ money and it is a great privilege to take part for the third time in the debate on its work. As the Chairman said, the Committee is a force for good and over the past few months its members have demonstrated the unbending commitment to which he referred. The PAC’s work would not be possible without the dedication of the Comptroller and Auditor General and his staff at the National Audit Office. I am certain that the House would like me to convey its gratitude to Sir John, his staff and the NAO, as well as to the members of the PAC and its staff.
As to the contributions to today’s wide-ranging debate, the Chairman of the PAC kicked off with a speech focused on financial management, leadership strategy and delivery. He highlighted the catastrophic failure of leadership at the Rural Payments Agency and outlined some of the tragic consequences— including, in some cases, suicide—of its administrative problems. He rightly highlighted it as a textbook study of how not to run a project in government. He also highlighted the Committee’s concerns that officials often promise notes with further information, but they do not arrive or are delayed, so holding up reports.
My hon. Friend the Member for Gainsborough was also right to underline the outstanding quality of many public officials, emphasising that although the Committee has serious criticisms of many projects undertaken in the public sector, that should not be taken as a criticism of public officials and civil servants across the board. Of course, most of them do an excellent job. Interestingly, my hon. Friend also highlighted another continuing problem in the public sector—low-quality data and information systems. Those problems have been manifested in respect of patient safety and the lack of reliable recording systems for those sorts of incidents.
The right hon. Member for Swansea, West (Mr. Williams) spoke with great insight about child obesity and the Committee’s valuable work on that issue. He spoke in favour of strengthening the proposed restrictions on advertising to children.
The hon. Member for Sutton and Cheam (Mr. Burstow) talked about the report on the Norfolk and Norwich hospital, to which I shall return. He also rightly highlighted the report on urban green spaces. Although it was one of the Committee’s less controversial reports, it underlines a matter of enormous importance. I shall return to that report later in my speech.
The hon. Member for Bishop Auckland (Helen Goodman) expressed in strong terms her concerns about cost overruns. She referred to a culture of irresponsibility among certain officials and expanded on two particular issues, both important in that context—the need to ensure that civil servants have suitable skills and that they are properly accountable.
My hon. Friend the Member for South Norfolk (Mr. Bacon) spoke with his usual insight on the importance of ensuring that this debate, which we have every year, is effective. I share his concern that so many of the Public Accounts Committee’s recent reports are not formally on the agenda today because of delays in receiving official Treasury minutes. I join other hon. Members in urging the Treasury to speed up its response and to consider amending the procedure relating to today’s debate so that we can discuss the most up-to-date work from both the PAC and the National Audit Office. My hon. Friend also talked with great insight about efficiency programmes and how to improve them.
The hon. Member for Tooting (Mr. Khan) referred to an important report on the National Offender Management Service. He was absolutely right to highlight the importance of dealing with prison overcrowding, because overcrowded prisons result in significant interruption to the education and training programmes that are vital for prisoner rehabilitation. Overcrowding also poses the risk of greater incidents of self-harm. The hon. Gentleman’s remarks on poorly performing schools provided another useful contribution to our debate.
My hon. Friend the Member for Ludlow (Mr. Dunne) highlighted the importance of keeping track of the cost of the Olympics—another issue to which I shall return later.
Today’s debate has demonstrated that the PAC’s work over the past few months has been wide ranging. I cannot cover every report, so I have grouped them into three areas: reports on less controversial matters where the Committee had important advice for Government organisations but did not identify critical major failings; reports where significant failures were identified in terms of value for money; and reports outlining more serious systematic failure and lack of competence.
In the first category, I shall first mention the PAC’s report on urban green spaces—a matter of huge importance to my constituents in Chipping Barnet. One of the report’s most interesting aspects is that, as well as emphasising the obvious environmental benefits of such green spaces, it underlines the importance of
wider policy goals such as improved health, urban renewal and better community cohesion. A number of Members have talked about the importance of open spaces in the campaign to tackle the important problem of child obesity. The Government and local authorities would do well to heed the concerns of the PAC about ensuring that there is as much public involvement in running green spaces as possible. The involvement of community and voluntary groups can be successfully improved on. That is something that runs well in my constituency. Local authorities across the country would do well to listen to those concerns about green spaces. The PAC highlighted the fact that, although public green spaces are classified as greenfield sites for planning purposes, back gardens are not and hence enjoy inadequate planning protection. I would like the Government to look at that.
Another issue of concern for many of my constituents is the quality of postal services. I was concerned to read in the Committee’s report on Postcomm that insufficient attention was given to the 15 million items of mail that are lost, stolen or damaged each year by Royal Mail.
We have heard from a number of Members about the important advice given by the Committee on improving care to those who suffer a stroke. The Committee continues to be at the forefront of the debate on improving health care in our country. The Department of Health admitted to the Committee that it needed to do more to improve rapid access to brain scanning and to deliver a greater proportion of care through specialist stroke units. As the Chairman has pointed out, implementing the recommendations of the Comptroller and Auditor General could save the NHS £20 million a year and could save as many as 10 lives a week.
Some good news was contained in the PAC’s report on the tsunami, which described the response of the Department for International Development as “both rapid and impressive”. It is important to include the good news, as well as the bad news.
The news is less good in my second category of reports, where significant failings were identified. I would like to look at the latest of the PAC’s influential reports on skills. When taking evidence, my hon. Friend the Member for Tunbridge Wells (Greg Clark) extracted the admission from the chief inspector of schools that, in the period under consideration by the PAC, the percentage of substandard schools had increased. Commenting on the matters in the report, Sir John Bourn said:
“It is unacceptable for any school to carry on providing a poor education over a period that can take up a large part of a child’s school career and deprive them of future prospects and opportunity.”
The Committee returned to some of the problems in our education system in its report on improving skills for employment. It expressed concern that money intended for employment-related skills training was being used to make up for failings in the school system. It is being used to equip people with basic literacy and numeracy skills, which they should have acquired in the school system. The Committee’s recent report on the matter was the latest in a series of quite hard-hitting reports on the chequered history of the Government’s skills initiatives, including the debacle on individual
learning accounts, when the Government were forced to withdraw a flagship scheme following allegations of large-scale fraud and abuse running to £97 million.
A key role for the PAC is scrutinising the Government’s efficiency programmes. Here again, some significant concerns were raised. The Committee’s report on Gershon in July last year concluded:
“While progress has been made, reported efficiency gains should...be considered as provisional and subject to further verification.”
When the NAO reported again on Gershon in February, it concluded that only 26 per cent. of the efficiency gains so far claimed by the Government stood up robustly to scrutiny. The rest were uncertain or impossible to verify. The Comptroller and Auditor General’s verdict was:
“Many reported efficiency gains still carry a significant risk of inaccuracy.”
We have heard that there has been progress in terms of the measurement of baselines, but I want to highlight measurement problems, including the failure, in many cases, to include the cost of an efficiency programme in calculating overall savings. In the light of the continuing dispute and uncertainty surrounding the measurement of Gershon savings, a transparent approach from the Government is vital if the programme is to have any credibility. Yet the PAC told us that the Office of Government Commerce refused to provide it with
“basic factual information about the likelihood of departments achieving their efficiency targets.”
I welcome what the Chief Secretary said about making the programme more transparent in future, but it is vital that we have clear figures on the split between cashable and non-cashable savings. So-called non-cashable savings are difficult to quantify or verify, so much so that the Education and Skills Committee has accused the Department for Education and Skills of trying to redefine the concept of money with its claims on non-cashable savings. The Chairman of that Committee warned that the Department was laying itself open to the challenge that it was claiming “fantasy savings”, not real ones. Getting clear figures on the proportion of genuine cashable efficiency is of significant importance to an assessment of whether the Gershon programme will work.
Many have expressed concern that the Gershon programme is having a negative impact on service quality. The PAC recently stated:
“Greater assurance is needed that the quality of public services is not being adversely affected. Service quality needs to be measured robustly to ensure the Programme achieves true efficiencies rather than just cuts in public services.”
We would do well to consider the example of the Department for Work and Pensions because that Department bears a significant part of the burden of implementing the Gershon programme. The PAC identified that more than 20 million calls to the DWP went unanswered in 2004-05. Of course, the switch to call centres was triggered in large part by the Gershon efficiency programme. The Work and Pensions
Committee also reported that Gershon programmes had contributed to a “catastrophic service failure” at Jobcentre Plus.
The reports in the third category cover some of the more systematic failures in Government administration. I should mention the devastating report on the refinancing of the Norfolk and Norwich hospital. As we have heard this afternoon, the PFI contractor managed to treble the rate of return for its investors to 60 per cent., while leaving the public sector partner with greater risk and a wholly inadequate share of refinancing gains. The Committee concluded that that was unacceptable
“even for an early PFI deal”.
It was worrying that we heard this afternoon that the trust was directed by Whitehall officials not to try to include a clause on refinancing gains in the contract. I will not dwell on the report on that matter because we discussed it on the last occasion we debated such reports on the Floor of the House, but it is worth noting that the incident was not isolated. Investors in the Ministry of Defence joint services command and staff college increased their return by 72 per cent. after refinancing, while the investors in Darent Valley hospital and Fazakerley prison both increased their rate of return by 144 per cent. after refinancing.
The Committee’s more recent work on the health service has documented the continuing troubles with the national programme for information technology, which is running two years behind schedule with no firm implementation date yet settled. We found out from the report that staff remain to be convinced of the benefits of the programme and that it has not been integrated into a wider programme to improve the way in which the NHS works. We can see serious danger signals, so I hope that the Government will now get a grip on the programme before it goes very badly wrong.
It is primarily the PAC’s hard-hitting work on the Home Office on which I would like to focus while considering the third and last category of reports on more problematic matters. In January 2006, Sir John Bourn started a ball rolling that eventually revealed the full extent of the crisis in that troubled Department when he gave a disclaimer of opinion on the 2004-05 Home Office accounts. Frankly, that was a staggering step. As we heard from my hon. Friend the Member for South Norfolk, Sir John Bourn did not give a qualification of the accounts. The errors and mis-statements were so serious and numerous that the Auditor General could not reach an opinion at all on the state of the accounts. It was not surprising that when the permanent secretary of the Department gave evidence to the Committee, he felt compelled to offer it an apology.
Mr. Bacon: It should be pointed out that the then permanent secretary, Sir David Normington, signed the accounts only because he was told that he had to so that they could be presented to Parliament, even though they were being presented unaudited. It was his predecessor as permanent secretary, Sir John Gieve, who was responsible during most of that period. What does my hon. Friend think that it says about the system that, after having presided over such a fiasco, Sir John Gieve was promoted to be the deputy governor of the Bank of England in charge of financial stability in the banking system?
Mrs. Villiers: It certainly does not give me a great deal of confidence in the method used to appoint members of the Bank of England committee, but it is probably more constructive to focus on the system, rather than the individuals involved, although I share a number of my hon. Friend’s concerns on that point.
To be fair, the situation as regards accounts is improving, but it remains a matter of concern that Sir John has qualified his opinion of the accounts for the past two years, and the report by the Committee details a continuing major problem concerning the release of foreign prisoners. It concluded that between February 1999 and March 2006, more than 1,000 foreign nationals were released without being considered for deportation. They included four murderers, 14 rapists, 15 child sex offenders, eight kidnappers, 107 other violent criminals, and 184 drug dealers. Sir David Normington admitted under questioning in the PAC:
“I cannot defend that. That is not acceptable.”
The Committee reached the deeply worrying conclusion that
“The Home Office does not have a grip on the issue of foreign nationals released from prison and not deported, and was unable to provide full information to the Committee about the numbers or locations of such offenders. It could not provide any assurance that foreign nationals are no longer being released from custody without consideration of deportation, or that definitive action is being taken to improve the situation.”
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