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that were

As we have heard, there were continuing problems in the Home Office in relation to the state of our prisons, with overcrowding undermining the ability of the Prison Service to monitor those who may be at risk of self-harm or suicide and producing a highly disruptive effect on the education programmes that are so vital for effective rehabilitation. The Committee was critical of the use of temporary portakabin units to house a sudden growth in the prison population in 2002. A number of the units had not been tested or used for prison accommodation before, and could not be properly secured. Many of them of suffered from leaks, condensation and security problems. Some were of such poor quality that prisoners had to be given their own keys because of the fire risk. In the PAC’s study on tagging offenders, it noted with concern one case in which more than £8,000 in compensation was paid to two offenders who were returned to prison because of damaged tags. The Home Office had destroyed the tags before their appeal was completed, and could not prove that the offenders had been responsible for the damage.

In conclusion, it is clear to me that the Government probably have a long way to go before they can instil in the public sector the real culture of efficiency for which the Comptroller and Auditor General, the National Audit Office and the PAC have long been calling. I shall close by referring to a speech that I made in January last year, when I first had the pleasure of winding up a debate on the reports of the PAC. In that speech, I pointed out how important it was for those in charge of the London Olympics to listen to the advice of the PAC on project management and safeguarding taxpayers’ money, and I hope that they will do that in future. I
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expressed the hope that that would help them to avoid many of the mistakes that have characterised Olympic projects in the past. It is therefore with anxiety and disappointment that we have witnessed the Olympic budget treble in a matter of months. I hope that in future years we will not, as I predicted in January last year, be standing here discussing PAC reports on what went wrong with the preparations for 2012.

2.53 pm

The Financial Secretary to the Treasury (John Healey): It is my privilege to respond on behalf of the Government to this debate, which has reflected the hallmarks of the Public Accounts Committee. Like the Committee, it was serious, wide-ranging, authoritative, sometimes highly critical, but at all times conscious of the need to be constructive and concerned to ensure that the Government are delivering services that are better value for money to the public. The debate was led in exemplary fashion by the hon. Member for Gainsborough (Mr. Leigh), who chairs the PAC, in a way that exemplified the qualities of his Committee.

In many ways, Winston Churchill caught the way in which a confident Government should respond to the PAC when he said:

Although Ministers may sometimes flinch or wince at the conclusions that the Committee draws—certainly, a PAC hearing is one of the least favourite appointments in any accounting officer’s diary—the Government share many common aims with the PAC. In its 63rd report, which was published on the day in July when we last debated the PAC’s work, the PAC said:

It said, too, that people

The Committee’s work is a valuable contribution to efforts to achieve that challenging task.

May I pay formal tribute, too, to the Comptroller and Auditor General and the National Audit Office? The PAC has high expectations of the NAO, which rises admirably to the task of meeting both the specific need of supporting the Committee’s work and the wider needs of Parliament in holding the Executive to account. When we debated the PAC’s work in July, I promised that the Company Law Reform Bill would extend the NAO’s remit and reach. I can confirm to the House that, working in collaboration, the Treasury and the NAO have identified about 80 non-departmental public companies to which the Comptroller and Auditor General can be appointed as auditor when the Bill’s provisions come into force in April next year, including Investors in People, the UK Film Council and the Student Loans Company.

The NAO audits over 500 accounts, so that will be a significant addition to its workload. However, I know that the Comptroller and Auditor General and his staff will work hard to ensure a smooth transition when the Bill’s provisions come into force. In recent years, there has been a significant growth in the NAO and a very significant growth in the resources allocated to it. The £90 million budget for the NAO this year is almost
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double its budget in 2001. Oversight is the responsibility of the Public Accounts Commission, but we all look forward to the NAO achieving efficiency gains in the same way as the Executive are rightly expected to do.

May I turn to the contributions to the debate before making some points about the Government initiatives in which the Public Accounts Committee is interested? I knew about the extraordinary experience of my right hon. Friend the Member for Swansea, West (Mr. Williams), but I did not know that he was a member of the PAC in the 1960s, before becoming a member of the Government. He concentrated on two reports, both of which he rightly said have the potential to achieve long-term benefits. He was concerned about childhood obesity, which is the subject of the Committee’s eighth report. It is clear from the report and from his remarks that that is a complex issue and that the challenges are long-term. However, the strategy that is in place has started to produce results. I agree with a specific point that he put to me—it is wrong not to give parents the information that they need about their children’s weight. I shall look into that for him, and ensure that he receives a reply. I shall take up, too, his concerns about the replacement requirements in the gas distribution network, and similarly ensure that he receives a response giving the Government’s view about his concerns and about the risks for the future.

May I welcome the hon. Member for Sutton and Cheam (Mr. Burstow) to his first PAC debate as the Liberal Democrat spokesman? He dealt with the PAC’s 35th, 56th and 58th reports, and brought to bear on them his established reputation and interest in social policy. He made some serious points about the report on prisoners’ diet and exercise. I thought that we would be deflected by the interventions by the hon. Member for South Norfolk (Mr. Bacon), just as the Committee’s evidence-taking session last year was deflected. I am fortunate enough to receive the minutes of evidence, and the hon. Member for Tunbridge Wells (Greg Clark) spent almost his entire allotted time for questioning exploring the nature of porridge and its place in the penal system. I had not realised, however, until the intervention by the hon. Member for South Norfolk that porridge helps the brain to release serotonin. In fact, I had not realised that there was such a thing as serotonin.

More seriously, the hon. Member for Sutton and Cheam said that the two crucial questions are these: have the lessons from PAC reports been learned and, more to the point, has action been taken as a result of the assertion that lessons have been learned? I believe that the PAC’s reports, including the ones that he mentioned, help Members of Parliament both independently and as members of departmental Select Committees to pursue the continuing concerns that the PAC has raised and therefore the answers to those two questions.

My hon. Friend the Member for Bishop Auckland (Helen Goodman) rightly said that skills and, in particular, accountability are the hallmarks of good governance and good Government. She acknowledged that although the British civil service has many strengths, management capacity is not generally one of
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them. She spoke not only from her experience on the PAC but from her experience in the British civil service, so her comment is especially telling. She referred to five reports during her speech and drew the important conclusion that good public services and good delivery of those services depend on the right skills, strong democratic accountability and regular regulation and inspection.

The Chairman of the Committee described the hon. Member for South Norfolk as “a bit of an anorak”—a soubriquet that the hon. Gentleman was happy to accept—and “an East Anglian roundhead”. To be frank, I prefer the latter description, which is more swashbuckling and more in keeping with the energy that the hon. Gentleman brings to the PAC’s work and to this afternoon’s debate. The hon. Members for Chipping Barnet (Mrs. Villiers), for Gainsborough and for Sutton and Cheam and my hon. Friend the Member for Tooting (Mr. Khan) all paid tribute to the work of the hon. Member for South Norfolk in triggering the exposure and assessment of the problems in the Norfolk and Norwich hospital PFI project.

The hon. Gentleman expressed general concern about transparency. I welcomed the recognition by the hon. Member for Gainsborough both in today’s debate and in the Budget debate of my right hon. Friend the Chief Secretary’s move to consolidate the breakdown of departmental performance in the efficiency programme. The hon. Gentleman described his comments in the Budget debate as a bouquet for the Government. We do not get many of those from the Opposition, so we are happy to accept that one.

The other concern expressed by the hon. Member for South Norfolk centres on the publication of the conclusions of Office of Government Commerce gateway review processes. He made it clear that he has heard me explain the position before, so I shall not repeat that explanation. He knows the concerns about compromising the value and purpose of those reports and that process, but I confirm that I am considering the general approach to the release of information on gateway reviews.

Given the comments made by my hon. Friend the Member for Tooting about delay in the PAC receiving Treasury minutes, I can only hope that the minute dating from 1690 that could not be found is not one that the PAC is still waiting for, but has been mislaid. My hon. Friend is right to say that through its work the NAO has contributed to savings of millions of pounds. He is also right to draw attention to some of the wider issues in the 44th report, because although most attention was given to records about foreign prisoners and their release, the report set out some other important detailed concerns that set an agenda for the Home Office to pursue in future.

The hon. Member for Ludlow (Mr. Dunne), who is new to the PAC, was unfortunately short of time to speak in the debate. I know the serious contribution that he has made to a succession of Finance Bills on which we have served together, and I am sure that he will make a valuable contribution as a member of the Committee.

The hon. Member for Chipping Barnet caught the tone of the debate well. She talked about both good news and bad news. She talked more about bad news than about good news, but perhaps that is her job. She was right to conclude by commenting on the serious
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failure in the system of Home Office accounting which resulted in the accounts being disclaimed by the Comptroller and Auditor General. Progress has been made, as the Public Accounts Committee has acknowledged, not only on the accounting side but on the policy and delivery side.

Let me turn to some of the initiatives that the Government have been taking that the PAC will be interested in. They are very much in line with looking for a more economic, effective and efficient delivery of public services. In the Budget, my right hon. Friend the Chancellor set out how the 2007 comprehensive spending review will build on the strengths of the public service agreement system to drive improvements in the areas that we regard as our policy priorities, while at the same time developing a framework for supporting performance management that enables a more user-focused and devolved approach to public service delivery. That will include each Department publishing at the CSR a new comprehensive set of strategic objectives that it will use to manage and report on performance and to inform resourcing decisions. Alongside a smaller set of cross-cutting public service agreements, those developments will allow a more coherent and better aligned framework for performance and financial management across the board.

On better links between performance and financial management and monitoring, I have today informed the Treasury Committee that we in the Treasury intend to pilot combining the departmental report and resource accounts for 2006-07. At least one other Department—the Department of Trade and Industry—will participate in the same pilot. One of the main benefits that I expect is a reduction in the overlap of information and the confusing differences between estimated out-turn figures in the departmental report and actual out-turn figures in the resource accounts, which are published within a few weeks of each other. It will also lead to closer links between reporting on outputs and performance, on the one hand, and inputs and spend, on the other, with spending data being audited and hence more reliable. Our work in the Treasury on our 2006-07 annual report and accounts is on track for publication in early June.

The hon. Member for Gainsborough dwelt on a specific concern that he described as the first of his four components of capable Government—financial management. For the past two years, with support from the PAC, a major drive has been under way to improve the professionalism of finance functions in Government. In passing, I should like to pay tribute to the work of the Treasury’s finance director, Mary Keegan, who has led this work. I am pleased to be able to tell the House that as a result more than 90 per cent. of Government spend is now being overseen by professionally qualified finance directors, with additional work ongoing to strengthen financial skills across Whitehall.

Competent Government and improving financial management is about more than just the finance function within a Department, however. Also critical are overall governance arrangements and the financial management capability of general managers throughout Government organisations. In the previous PAC debate in July, I was able to advise the House that a new learning facility to help managers in Government to improve their financial skills had just been launched. Today, I can confirm that
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access to this tool is being made available to all Members of Parliament; we can expect to find further details in The House Magazine shortly.

In his opening speech, the Chairman of the Committee referred to the value of departmental capability reviews. I welcome the way in which the review teams are working with Departments that have thus far been reviewed to offer practical support in following up the recommendations. I want to underline the fact that the Government take very seriously the lessons that are emerging from those capability reviews and see them as an important opportunity to improve service delivery.

As Minister responsible for the Office of Government Commerce, I felt that the model of a capability review was so useful that I borrowed the discipline and built it into the reform plans that I set out in January in the document, “Transforming Government Procurement”. The reforms that we are now pursuing are designed to deal with the two points that the hon. Member for Gainsborough urged on us, namely, that the Government need to become more commercially astute and that the OGC should be raised up the civil service pecking order. The plans for reform will achieve that. They are intended precisely to recognise that good procurement is essential to good public service delivery and good government as well as good value for money in both.

I want briefly to consider the initiative that the UK has led in Europe on financial management and monitoring European spend. I am heartened by the PAC Chairman’s response and that of others. If all member states work with their national audit institutions and Parliaments to improve their control and scrutiny of EU funds, we could make significant progress in getting a positive statement of assurance on the EU budget from the European Court of Auditors. The Netherlands and Denmark are taking a similar initiative to that of the UK and Sweden has said that it will do the same. In our annual White Paper on EU finances, which is due next month, we will present further information on the UK initiative.

I said earlier that the PAC’s work is not always comfortable for the Executive—it should not be. It is inevitable and right that the PAC’s work focuses on things that have gone wrong, although it acknowledges examples of good practice, as we heard this afternoon. When things go wrong, the central challenge for the Government is to learn the clear lessons and act to ensure that things are better in future.

I ended the debate in July with a quote from a Roman poet. That is the advantage of having such learned as well as skilled officials to support me as a Treasury Minister. Today, I should like to end with a quote from an American theologian, Tyron Edwards, who said:

The PAC’s work undoubtedly helps ensure that the Government can build success out of the lessons of the past.

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3.12 pm

Mr. Leigh: It is a great pleasure on behalf of PAC members to thank the shadow Chief Secretary and the Financial Secretary for their positive and non-partisan summing up of the debate.

I especially thank the Financial Secretary for his comments about taking up various recommendations that the Committee has made, especially on EU spend, the capability reviews and public service agreements. We are grateful to him for taking our work seriously. I am sure that he agrees, given his interest in theology and history, that those who do not learn from the mistakes of the past are condemned to repeat them. We pay tribute to his work as a member of the Committee. He is, uniquely for a Minister, a member of the PAC. I do not know why that is the case, but the Financial Secretary—not the hon. Gentleman personally, of course—has been a member of the Committee for several centuries.

I thank all hon. Members who took part in the debate. It is a pleasure to hear Ministers and shadow Ministers going through all those who spoke and referring to their contributions in detail. Sadly, that does not often happen in other debates.

I hope that the suggestion of the right hon. Member for Swansea, West (Mr. Williams) about child obesity will be taken up. It is important to ensure that parents are told if a child is found to be greatly overweight. If the debate achieves one thing, it is important for the Government to take that point on board.

I also hope that the Government will take on board the point of the hon. Member for Sutton and Cheam (Mr. Burstow) that it is unacceptable for recommendations that the PAC made in 1998, and that the Government accepted—about prisoner diet, including that there should not be more than 14 hours between meals served in prisons—to remain on the table 10 years later.

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The hon. Member for Bishop Auckland (Helen Goodman), with all her Treasury experience, made an important speech. We still have not got matters right. We expect too much of civil servants: we want them to wear the hats of brilliant policy advisers and of those capable of delivering successful projects. I know that the Government are aware of that problem, however, and in the past few years we have made enormous progress in moving away from the mandarin culture.

I hope that permanent secretaries will take note of what my hon. Friend the Member for South Norfolk (Mr. Bacon) has said today. He listed all those departmental accounts that had been qualified. There is too casual an attitude about this; some Departments think that if they have their accounts qualified, they will not have to appear in front of the Public Accounts Committee.

I would say to the hon. Member for Tooting (Mr. Khan) that I wish there would be a front-page splash in the Daily Mail saying, “Public Accounts Committee Congratulates the Government”, but it will not happen. However, we will do our best to try to be positive whenever we can.

I thank all those who have spoken in the debate, especially the Front-Bench spokesmen and, of course, my hon. Friend the Member for Ludlow (Mr. Dunne) who, sadly, did not have time to deliver all his speech. We on the Committee will continue to do our best to hold the Government to account in a positive and unpartisan way.

Question put and agreed to.


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