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6.8 pm

Simon Hughes (North Southwark and Bermondsey) (LD): I will also be brief. I add my thanks to those of the Minister for the right hon. Member for Hitchin and Harpenden (Mr. Lilley) and his colleagues for discharging this function.

I have two further questions—I had hoped to intervene to make my contribution even shorter—so let me deal with them in turn. First, in respect of the first motion and the fund as a whole, I understand that it currently stands at just above £4 million. By definition, the 100 beneficiaries are declining in number as they age. At the end of the exercise of this set of functions, will the money go back into a fund that will be available for other potential beneficiaries, will it go back to the Treasury or will it go somewhere else? From the papers I have read, I could not work out where the money would go once the duties of the trustees to these 100 beneficiaries have been fulfilled.

Secondly, on the replacement custodian trustee, I have no fundamental disagreement with the judgment of the trustees, but a bell was ringing in my head when I saw who had been nominated to take over. It is a private sector company well known to many of us and this is clearly its trustee arm.

Capita has not been uncontroversial in its intervention in public sector tendered activities; it does, and has done, huge amounts of work for local authorities. I think that the other arm of the company might still run London congestion charging, so it is well known across the country. It has had difficulties in the recent past: it is a matter of record that it was fined by the Financial Services Authority, and it accepted that and paid up. In addition to the tendering process done by the previous official custodian as official trustee, will the right hon. Gentleman confirm that our trustees, of whom he is an eminent chairman, satisfied themselves that the company was not only satisfactory simpliciter but the best available in the market—even if they did not undertake a tender process, as I understand it—and that any concerns about its past failures had been overcome, so that people could have confidence that it was entirely reputable and competent to do the job?

6.11 pm

Mrs. Theresa May (Maidenhead) (Con): I simply want to make two points.

First, my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) referred to the fact that a review of the fund is taking place, which I welcome. The hon. Member for North Southwark and Bermondsey (Simon Hughes) might find that at least one of his points is addressed by that review. Secondly, I add my thanks, not only to my right hon. Friend who is chairman of the trustees, but to the other trustees who have undertaken their role with distinction. Despite stories in the press about hon. Members with their snouts in the trough, many widows and other dependants of those
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who have served as Members in the past are in dire circumstances and need the support of the fund. The trustees do a very good job.

6.12 pm

Mr. Lilley: I am grateful for the opportunity to respond to this brief debate and the two questions asked by the hon. Member for North Southwark and Bermondsey (Simon Hughes).

On how the review might influence the disposal of moneys in the hands of the trustees, one proposal that we are considering is that a sum of money from that £4 million be handed back to the Treasury, which would take on the responsibility for the as-of-right cases during their remaining existence. Some actuarial assessment of costs would be sought, and the Treasury would in turn diminish or cease to make an annual contribution to the fund. The fund would therefore need to retain some moneys to ensure that it was properly financed, together with the ongoing subscriptions that it receives from serving Members to meet the needs of ad hoc cases that come before us. We will have to get the sums right in the review for that to be agreed, and for a proposal to be put before the House.

On Capita, the issues raised by the hon. Gentleman were considered when there was the happy coincidence of the two bodies reaching a decision. That they both reached that decision should give him some comfort.

I am grateful for the opportunity to clarify matters, and for the thanks that all who have spoken have given to the trustees. I add my thanks to all those who have served as trustees, and who do so out of a sense of noblesse oblige, as that service cannot in any way contribute to their parliamentary careers.

Question put and agreed to.




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Public Accounts

6.14 pm

Mr. Edward Leigh (Gainsborough) (Con): I beg to move,

Christmas may come only once a year, but other good things come more often, and this is the second debate this year covering the work of the Committee that I am privileged to chair. I am sure that Members will think that a just reflection of the prolific output of the Committee, and of the importance of its work.

Our motto was spelt out some 150 years ago when the House was built and the Committee was brought into being. Above the door of Room 6A, which I have the privilege to use as Chairman of the Committee, is one word, “Assiduity”. That is a watchword for all members of the Committee. We are, we hope, assiduous in holding the Executive to account, and in pursuing savings and improvements in public services. That role is perhaps not taken as seriously as it should be, but it is vital to the work of the House. It is therefore important to have two occasions every year when we can put the spotlight on efficiency savings.

The Prime Minister says that his route map for the governance of Britain includes helping this place to hold those in power more accountable. I contend that that is what the Committee tries to do week in, week out. It can be testing, I know, for permanent secretaries to appear before the Committee, and we make no apology for that. In our last debate, I challenged those most senior of civil servants who appear before us to show without question that they understand the seriousness of their responsibilities to the Committee. I was thinking particularly of the way in which notes are often promised but their production is often subject to severe delay. Various commitments have been given, which I welcome. It is too early, however, to pass judgment on what will happen and whether the commitments will be carried out. I remind those on the Treasury Bench, however, of those commitments on behalf of permanent secretaries. I and my fellow members of the Committee remain on the watch. As we have seen in the past two or three years, it is absolutely vital that notes that are promised are delivered on time.

Mr. Philip Dunne (Ludlow) (Con): Does the Chairman of the Committee agree that it is not only important for notes to be made available when they are promised, but for the responsible officers of Departments to appear before the Committee whether or not they remain in post? I am thinking particularly of Mr. Johnson McNeil from the Rural Payments Agency, who failed to appear before our Committee for nearly a year after he was initially invited to do so.

Mr. Leigh: That was a worrying development. Civil servants have a very difficult job, but usually, whatever happens, and whatever mistakes are made, they keep their job. If something goes wrong, however, they know that they must appear before the Public Accounts
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Committee. Mr. Johnson McNeil presided over one of the greatest failures of government and caused a lot of anguish to farmers. Our hearing, however, was delayed for the better part of a year while various sick notes were put in, phone calls were not returned and so on. Finally, he appeared, and in my view he was a perfectly adequate witness who gave his side of the story.

Another message that we want to pass back to Whitehall is therefore that civil servants must realise, even if they are suspended from their post or have moved on to a different Department, that there is one place that they can be held to account on behalf of the public—in front of the Public Accounts Committee. Their superiors and the whole system must ensure that they turn up.

An appearance in front of the Committee can be testing, but at the same time we try to be fair. We are not in any way party political, and we try to give praise where it is due, and to help the Government. This is not often heard from Opposition Members, but I and my fellow members of the Committee try our best not to be partisan. We try to help the Government, as best as we are able, to learn from best practice in whatever nook or cranny it can be found.

By convention, the debate looks back at matters arising from the Committee’s recent work. It also looks forward, however, as important lessons arise from our reports. We look to officials to apply those lessons and that experience to new challenges in whatever area of government they arise. The new challenges are many and varied.

In the previous debate, in April, I think, I referred to the comprehensive spending review, which arrived earlier this month. What can we glean from it to guide the work of the Committee, given that this is the sort of tapestry on which we draw our work? Well, the squeeze is certainly on. If the aims are translated into action, the munificent Treasury will no longer be showering spending Departments with ever-increasing pots of gold. Everyone will have to raise their game to ensure that more limited increases in Government spending translate into better public services for all. Initiatives to cut waste, slash red tape and make better use of what we already have are essential if the whole edifice is not to crumble.

The Government report that they are on track to realise their efficiency target of a massive £21.5 billion of savings by next March. That is really at the centre of the whole political debate—at the centre of the issue of whether political parties can deliver improving public services and lower taxation. The efficiency programme is the centrepiece of the Government’s efforts to get more for less. The Treasury claimed that it had already achieved an annual £13.3 billion of efficiency savings, but I am afraid that, as we found in one of our recent reports, the claim does not stand up to close scrutiny. Our report cast doubt on the reliability of 74 per cent. of the savings claimed.

It should be crystal clear whether or not any programme has achieved its goal. Efficiency gains must be real and demonstrable, and must be deliverable year after year. Remarkably, it was possible for claims to be calculated without account being taken of associated increases in costs elsewhere. Efficiency is not genuine if,
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as we have found in a number of cases, it has been achieved at the expense of the quality of service provided.

Guarding against such—let us be generous—confusion is an important task for the Committee. I was therefore pleased to note the Government’s announcement in the comprehensive spending review that there may be what we consider an important role for the National Audit Office in reviewing claimed savings on a Department-by-Department basis. That means an independent audit of what is now at the heart of political debate for all three political parties—indeed, for every political party: I see that parties other than the three major ones are represented here.

If the scale of savings required is significant, the scale of projects that may cross the Committee’s path in the near future is monumental. Let me list some of them. We are talking about £9 billion, already, for the Olympics; £19 billion to replace Trident; £12.5 billion for IT in the health service; at least £5.5 billion for identity cards; and £16 billion for Crossrail, which we debated earlier today and which is finally emerging from its elephantine gestation period. That is more than £60 billion in just one sentence, and I could go on and on.

It looks like boom time for the contractors and consultants, but what lessons can be taken from the work of the Public Accounts Committee to ensure that it will not be the taxpayer who goes bust? We will have published nearly 70 reports by the time the Session ends, far more than any other Select Committee. I will spare the House the details of all of them. Sometimes in the past Chairmen have gone through the whole list, but I think that that is tedious, and there is no point in it. Instead, I shall focus on some of the essential verities that Government will need to grasp in response to the challenges that I have outlined.

First, there is good project management. The Committee has seen a sorry succession of projects cursed by weak management and implementation. With some 100 mission-critical or high-risk IT-enabled programmes and projects, the risks are very high. Given the history of past failures, Government need structures and management processes that will secure greater success.

When things go wrong, everyone pays the price. The implementation of the single farm payment scheme, which was mentioned by my hon. Friend the Member for Ludlow (Mr. Dunne), was inept, and my Committee said so. The timetable was near-impossible. The planning was poor. The testing of IT systems was incomplete. Responsibility was confused. Management information was scant. Above all, top managers failed to face up to the crisis, and, as we heard earlier, to answer for it. Farmers, many of them in my Lincolnshire constituency, were hit emotionally and financially, and the taxpayer had to confront a potential liability approaching £500 million. Let that fiasco be studied for years to come, and let the message be drummed home to senior civil servants: never again.

Mr. Richard Bacon (South Norfolk) (Con): I was interested by what my hon. Friend said about the Rural Payments Agency. He mentioned testing of the computer systems. A theme that has recurred a number of times, for example in regard to the issue that we
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examined relating to tax credits, is the failure to engage in adequate testing. The compression of the testing timetable featured in the Committee’s report. What is it about computer systems that gives the Government such an aversion to testing them properly before they are implemented? Or is this a result of Ministers’ shouting from the rooftops that projects must be completed by a particular date regardless of whether they are ready?

Mr. Leigh: My hon. Friend’s last point illustrates a difficulty that arises in Government. We live in a political system under which Ministers understandably want to get their own projects up and running while they are in office. Projects in the public sector are often far bigger and more complex than those in the private sector. The combination of political interference—if I may put it that way—and the sheer scale of projects frequently causes disasters. But let me take up my hon. Friend’s point immediately, and say that we do not always want to be critical.

Mr. Austin Mitchell (Great Grimsby) (Lab): Another problem may be the fact that civil servants are not prepared—I do not know why, because they should be—to stand up to Ministers. A Minister will get a bright idea and say, “Let us do it this way, let us do that, let us adopt such and such an initiative”—and senior civil servants do not dare to say, “We cannot do that with our current resources” or “We cannot do it while we are firing staff under the Gershon programme” or “We cannot do it because our computer systems will not cope with it”. Civil servants ought to stand up to Ministers; that is what is primarily needed.

Mr. Leigh: It would be great in an ideal world, but it might be rather career-limiting for a civil servant to stand up to his political master in the way that the hon. Gentleman describes. That was one of the problems with Johnson McNeil. We were surprised to hear that a man who had been charged with running such a huge project had apparently never seen the Secretary of State, or had seen her on only one or two occasions. That was rather worrying.

Mr. Dunne: I can confirm that he met the Secretary of State twice. The second time was to get fired.

Mr. Leigh: Well, there we are. Perhaps he made the mistake of standing up to a Minister on the first occasion; we do not know.

The single farm payment scheme represented government at its worst, but a fortnight ago the Committee praised the introduction of the first generation of e-passports. That showed that the public sector can successfully deliver a major scheme to time, cost and quality. It was good to see the Identity and Passport Service taking on all the recommendations made by our predecessors. Planning from the outset was for a cautious, low-risk project of which my hon. Friend the Member for South Norfolk (Mr. Bacon) would approve, featuring substantial testing and sufficient time for a progressive roll-out rather than a big bang, a switch and the job was done. There are lessons in that which could well be learned throughout Whitehall.

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Mr. Don Touhig (Islwyn) (Lab/Co-op): Does the hon. Gentleman share an impression that I have gained while serving on the Committee under his chairmanship? Does he agree that it always appears novel when we suggest to senior civil servants that they should carry out a “lessons learned” on any project, and that it is frustrating when no one takes responsibility for anything that goes wrong?

Mr. Leigh: That is certainly frustrating. As Chairman, I am trying to establish a greater focus on the Treasury minutes. Members may be aware that our Committee is unique in that the Government must reply to every recommendation, and do so in a Treasury minute. While we are proud of the fact that 90 per cent. of our recommendations are apparently accepted by Government, when we examine the outcome we find that many of them are not adopted more widely across Whitehall, and as the right hon. Gentleman suggests, Members are often frustrated by a lack of accountability on the part of senor civil servants. That is why we are insistent that we will on occasion want not only to interview the current accounting officer, but also to summon back a previous accounting officer when it is clear that the current one is simply speaking from a brief because he or she has been in the post for only a few months and what went wrong was in fact the fault of the previous accounting officer. There is so much shuffling of chairs around Whitehall that it is often difficult for us to direct some light on who or what is responsible for faults.

I respect the civil service and am generally loyal to it—as the son of a senior civil servant, I know that they have a difficult time. However, although we in this House tend always to lay the blame on their political masters, one of the virtues of the PAC is that it recognises the reality that senior civil servants play a powerful role in our system and that occasionally they must individually be held to account. They must be named and shamed, and sacked where necessary if they have been incompetent rather than merely the policy having been wrong. I am sorry to have to say this to the senior civil service—I know that many senior staff read the Hansard reports—but we will in future be prepared to do that more often.

Our 27th report, snappily entitled “Delivering successful IT-enabled business change”, identified essential ingredients that help projects to avoid ending up on the rocks. Clear and resolute leadership is critical, as is strong budget management and having the internal experience and expertise to get the best from contractors. That sounds obvious, but it is a pity that such lessons are not learned more widely. Above all, there must be a crystal clear sense of where people are trying to get to, and a map of how to get there.

Clear and resolute leadership requires senior decision makers to ensure clear lines of accountability and strong progress and risk management arrangements. Ministers must be challenged in order to ensure that plans are realistic—the hon. Member for Great Grimsby (Mr. Mitchell) made that point. The single farm payment scheme and the Child Support Agency are examples of complex and over-ambitious projects that suffered from a blurring of accountabilities.

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