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This sounds like a simple task, but management must also keep a tight grip on budgets. That point takes me on to the subject of the Olympic games. We all hope
that, when the finishing line is crossed on 27 July 2012, they will be a great success—I am sure they will be. The risks, however, remain. The original bid seriously underestimated the cost of the games and was far too optimistic about the extent of private sector funding. We will shortly have a hearing on that, and we will constantly point a spotlight on the Olympic games so that we do not have merely an, as it were, post hoc PAC report on the Olympics after 2012; we want to keep close track of them as we approach 2012.
The Olympics budget currently stands at £9 billion. No single individual has overall responsibility for delivering the games and the plethora of bodies involved presents significant risks to timely decision making, among other potential problems. Strong progress monitoring and risk management arrangements are essential, but they are not yet in place. Therefore, the Committee, with the support of the National Audit Office, will continue to keep a close eye on progress. We hope that when we reach 2012 the lessons will have been learned and we can have Olympic games that are both successful and—for the first time ever—delivered on budget.
The public sector faces unique challenges. Its projects are every bit as complex as, and often larger than, those in the private sector. We should be optimistic, as some progress is being made. Our reports show that it is possible for the public sector to impose tight management disciplines on big projects. As Committee Chairman, I am keen to ensure that the PAC pays due recognition to public sector successes—that we do not always seek to carp, but that we congratulate, praise and welcome where appropriate.
The Department for Transport admits that the programme to modernise the west coast main line was originally “naively based”. That naivety had enormous financial consequences, but the Strategic Rail Authority and Network Rail stepped in; they strengthened project management, and passenger numbers are now up and journey times are down, and trains are more likely to run on time. There is much still to do, but we congratulate them on turning things around.
Only if Departments can act as intelligent clients can they be sure of getting the best value for money from external suppliers. Departments need, of course, to understand the process being changed and have clear design requirements, but having the right staff and skills in place to engage effectively with suppliers can be the difference between success and failure. The Child Support Agency did not have the in—house technical expertise it needed to challenge its supplier. No one involved truly knew what they were doing in dealing with the contractors, and the IT system was a turkey from day one. It might prove to have been right to put the CSA out of its misery—most Members accept that—but the Government must also keep an iron grip on the new Child Maintenance and Enforcement Commission. It should not have taken 13 years of failure before the CSA was finally put out of its misery.
Let me now turn to the topic of understanding and communicating the benefits of programmes. Active management and the right mix of staff will go a long way in helping Departments achieve the third in a trinity of success factors: having absolute clarity about the benefits they are trying to achieve. Not only do
Departments need to have clarity themselves, but they need to sell the benefits to users, win wider support for change and, ultimately, assess whether the programme or project has achieved what it set out to do. Those are brave words, but when we examined the NHS IT programme we learned that there was still a great deal to do to win hearts and minds in the NHS. That is a major problem with this huge Government IT programme. Scepticism is rife throughout the NHS. With sums involved of more than £12 billion and counting, this is a high stakes game, and the Committee will return to the subject. By contrast, in terms of the west coast main line the SRA successfully engaged stakeholders in support of the programme and to clear effect. If we are to make a success of the NHS IT programme—as we are all committed to do—there must be more engagement with people on the ground, particularly GPs.
Government need to adopt a more commercial approach to procurement. Central civil Government organisations spend approximately £20 billion a year on goods and services. About one third—almost £8 billion—of the Government’s own efficiency savings are expected to come from more efficient procurement. Therefore, procurement is essential to their efficiency programme. There is certainly scope for such savings: in the past six months, in just four Committee reports we identified potential savings of some £1.3 billion a year. Consultancy firms have been on to a good thing, and we found that there was the potential to save £500 million in Departments’ use of consultants by making more use of in-house staff, negotiating better contracting terms and getting improved results for the money they spend. We are pleased that the Cabinet Secretary is taking action, but will that produce results? Is all of this just words in Treasury minutes, or have we now moved on from what we see as an over-reliance on external consultancy firms? There is often enough in-house expertise.
Another £500 million a year could be realised if OGC Buying Solutions was to improve performance and increase co-ordination. I was pleased to see that OGC agreed, and it was set a target to achieve £1 billion a year in savings by 2010.
Best practice would often make a genuine difference if transferred elsewhere. There could, for instance, be the following savings: more than £220 million from the £2 billion a year spent on food in four key areas of public services; and more than £75 million a year if further education colleges adopt modern procurement practice. Opportunities exist, and even in such mundane matters as food procurement the possible savings are staggering.
Wherever possible, procurement must be open and competitive. I will raise one minor example; a relatively small sum was wasted, but it offers a useful lesson. The backroom deal pursued by the Department of Health with Dr. Foster Intelligence was a failure in Government’s duties to Parliament and the taxpayer. The sums involved were small, but fundamental principles were at stake. The choice of company and the haste with which the deal was concluded gave the Committee cause for concern. It is important that we occasionally draw back from all the huge projects and our need to talk in terms of hundreds of millions or
billions of pounds and examine a small project, such as that involving Dr. Foster Intelligence, so that we can learn lessons.
I have not yet mentioned the Ministry of Defence. Suffice it to say, given the mismanagement of technical and commercial risks on the Astute submarine programme, which was highlighted in the major projects report, that we will watch progress on the massive Trident replacement programme with two eyes fully open. If hon. Members will forgive the pun, little of this is rocket science; the simple adoption of methods tried and tested in much of the public and private sectors could save the taxpayer billions.
I know that the Government, and Opposition parties, are wary of going back to the public and trying to make the case for efficiency savings. They think that the public do not believe that Government, or a future Government, can deliver efficiency savings, but they can be delivered and that is happening to a certain extent. An important role of the Committee is to put a spotlight on efficiency savings, to convince the Government to carry on with their work and to convince the Opposition that efficiency savings are deliverable now and in future.
I come to my final theme, which, again, I have emphasised before. We can only truly judge whether all the expenditure announced in the comprehensive spending review is effectively used by assessing its impact on the end user—the consumer. It is all very well to talk in technical language, but we often forget that we work on behalf of the consumer, who is also usually the taxpayer.
The Government’s “Transformational Government” mantra calls for public services to be designed around the needs of the consumer, not the provider. Unfortunately, to take just one example, that was not the case in the introduction of the new out-of-hours care system. We found that the preparations for the switch in a system used by 9 million patients a year was shambolic. Patients’ needs are not best served by the ending of Saturday morning surgeries, nor by a situation where access to advice and treatment is difficult and slow, or where no one knows whether the new service is meant for urgent cases only or for any requests for help. We accept that the new service is getting better, but it is costing about £70 million a year more than expected, which is the last thing that primary care trusts wanted or need in this difficult climate.
On a more positive note, we returned in this period to the issue of tackling pensioner poverty by encouraging the take-up of entitlements. We were pleased to note that the Department for Work and Pensions is making good progress in encouraging patients to claim the pension credit to which they are entitled; however, billions of pounds lie unclaimed in the Treasury’s coffers rather than in pensioners’ pockets. Shared targets for the different agencies involved, allowing pensioners to claim linked benefits through a single transaction and focusing effort where we know that take-up is poorer might all help. The Committee is not afraid of new thinking—we seek it and welcome it when we see it—and we also welcome risk taking on the part of the Government.
I have touched on just a few of the Committee’s many reports, and they are sufficient to support our key contentions, although no doubt other hon. Members will highlight their own themes during this short debate. All members of the Committee would wish to say that we rely on our staff. I pay tribute to Mr. Mark Etherton and his colleagues for all their work, and to the National Audit Office, on which we also rely. Its dedication to enhancing scrutiny, improving delivery and support is vital.
I thank those members who have left the Committee since the last debate: the hon. Member for Rhondda (Chris Bryant), whose appearance in the Committee was so brief that he never actually said a word, yet still we welcomed him; the hon. Member for Wrexham (Ian Lucas); the Under-Secretary of State for Communities and Local Government, the hon. Member for Hartlepool (Mr. Wright); and the hon. Member for Sittingbourne and Sheppey (Derek Wyatt). It seems that they have all moved on to Government, and they doubtless toil night and day to implement the Committee’s recommendations. All its other members continue to work hard and assiduously to hold the Government to account, and I am grateful to them for making the Committee a pleasure to chair.
In July, “The Governance of Britain” Green Paper set out proposals to improve the transparency and accountability of Government to Parliament. As the proposals are debated and fleshed out, I am sure that the example of the parliamentary audit of the public’s finances has much to offer. In December, we are organising a conference—I am glad to say that the Chancellor and shadow Chancellor will be attending—to celebrate the decision taken in 1857 by the Select Committee on Public Moneys to create a Committee of Public Accounts. It was a brave decision to create such a Committee then, and it was braver still to entrust the honour of chairing it to an Opposition Member—an example that has been followed in many Commonwealth countries. Any Government might shy away from such a decision today, but they would be wrong to do so.
I am proud to chair what people generally reckon to be the most powerful Select Committee of the House. We have an effective Committee precisely because we are cross-party and always achieve consensus. Since I became Chairman in 2001, we have made 2,500 recommendations, more than 90 per cent. of which have been accepted, and produced 300 unanimous reports—we have never had a vote. We must not be too sanguine about this, because we must constantly work harder and ask ourselves whether these recommendations are being not only accepted, but implemented across Whitehall.
Our eyes will remain open and our heads will not turn the other way. On occasion, our tongues will doubtless remain sharp with senior civil servants, and they will not like it, but we shall study, with great care, progress on the massive projects that I mentioned in my opening remarks. I hope and believe that our reports will be high on the reading lists of the officials concerned. We will continue to criticise when criticism is warranted, and praise when praise is earned. That will be our ongoing contribution to ensuring that the Government are a better servant of the people. I commend the motion to the House.
6.46 pm
Mr. Alan Williams (Swansea, West) (Lab): I shall be brief because I want to touch on only two specific issues, but it would be remiss if, before I attended to them, I did not congratulate my colleague, the Chairman of the Committee, with whom I have had a good working relationship as a senior member. We understand each other’s thinking very well. I should also say how much I value his commitment to the Committee. The same must be said for my other Committee colleagues. Not many Committees have to cope with 60 pages of briefing twice a week and it takes a great deal of dedication to put in the time that they do, with as much enthusiasm as they have.
I, like the Chairman, express my thanks to the National Audit Office for the quality of its reports, and for the service and benefits that it provides to the taxpayer. Each year, it saves eight times its annual budget, and that will increase to nine times next year. I cannot think of anyone else who can claim a record equal to that.
I have touched on both of my two issues before, so these are follow-ups. I want to know what is happening in each area. In our previous debate, in April, I raised the issue of child obesity. We were told that schools are weighing children every year and checking for signs of obesity. The local health authority, the council and Departments could be told about problems, but we were astonished to find that parents could not. It was ludicrous that the relevant advisory committee described it as unethical to tell the parents, because back-up facilities in the community might not be available. That sounded more like a cover-up than a logical explanation. When I last raised the matter, I received a friendly and understanding response from the Minister. It was followed by a letter from the Department in which it indicated that it took the same view as the Committee—that parents had the right to know—and that it would take steps to introduce such a requirement. Months later, however, I still do not know where we are. On the 8 o’clock news the day before yesterday, it was suggested that Ministers might make some recommendations on the issue. When the Minister replies to the debate, will she be able to provide some up-to-date information?
My other issue is strongly shared by all members of the PAC—indeed, by everyone who has ever been a member as far as I can remember: the BBC, which is the beneficiary of a tax on virtually every household in the country, is the one public organisation in receipt of taxpayers’ money that is not accountable to the National Audit Office and, therefore, to the PAC.
The Government, for some misconceived reason, say that the BBC cannot be audited because that would imperil its independence. That was repeated at our hearing in June. I put it to Mr. Peat from the BBC that
“your grounds for objection in the past”—
“have always been fear of interference in editorial independence.”
“Yes, there must be no perception of any risk to that independence.”
I pointed out that the BBC World Service had been accountable to the NAO and the Committee for
decades and that the last time representatives appeared before us I had asked the accounting officer whether, in her many years in the job, she could recollect any occasion on which the NAO or PAC had tried to interfere in editorial content. She said no, but that did not seem to matter to the BBC.
Mr. Touhig: Does my right hon. Friend agree that if a Government agency or an aspect of the operation of this House declined to be independently audited, the BBC would be the first to run a programme exposing it?
Mr. Williams: Yes, and the Sharman committee was set up to examine Government agencies that were not answerable to the NAO. It made recommendations about Government agencies and companies that were not accountable. The Government accepted its recommendations and said that they would bring all those organisations under the NAO. They made two exceptions to the Sharman recommendations: the civil list—that was no surprise—and the BBC. The Government rejected a specific recommendation from Sharman that the BBC should be covered by the NAO, which was anomalous and illogical.
Mr. Dunne: The right hon. Gentleman makes a telling point. Does he agree that it is disappointing, given the new structure established this year for the BBC Trust, that Sir Michael Lyons, who chairs it, should have rejected our overtures to re-examine the accountability of the BBC? In a letter to the Chairman and me, received last week, Sir Michael declined the opportunity of a review.
Mr. Williams: That does not surprise me. Indeed, it makes me wonder what the BBC has to hide.
Mr. Bacon: Does the right hon. Gentleman think that this subject might come up when next we see the director-general of the BBC—in, I think, December—and will he invite the Minister to explain what possible objection there can be, given that the NAO already has responsibility for auditing the BBC World Service, which is a by-word for editorial integrity?
Mr. Williams: Indeed. There is no logic behind that position, but every incoming Minister in the Department for Culture, Media and Sport—and its many manifestations over the years—has been indoctrinated by officials that they must not touch the BBC. Most people who have seen the nonsense going on with BBC financing recently would think that it is an ideal candidate for investigation by the NAO and the PAC.
Another point that I put to the BBC representative was that the NAO often solves problems, hence its record of saving the taxpayer eight times its annual budget. The BBC’s representative was not moved. I pointed out that BBC representatives appear before Select Committees in the other place and here, and asked whether that compromised its independence. He accepted that that happened, but, he said:
“I cannot think of an example where the Culture, Media and Sport Select Committee have sought to go into contentious or difficult editorial issues. Their focus is on policy.”
That almost stands logic on its head. The claim is that auditing the BBC’s finances is a danger to editorial freedom, but a Committee that has power to question policy is not. If the Government cannot see the difference, one wonders what else could demonstrate the absurdity of the situation. If it is all right for Select Committees to look at the BBC, the PAC should also have full access via the NAO. As I have said, one wonders what the BBC is afraid of; perhaps, given its financial behaviour recently, it is that the public will realise that it is not very good at management.
I put it to Mr. Peat that the situation was illogical. He said:
“My final comment will be that if Sir John”—
the Comptroller and Auditor General—
“wished to suggest at any time that there were areas where there would be benefits from NAO, which have not taken place in the past, I, as Chair of the Audit Committee, would be the first to recommend to the Board of Governors and the Board of Trustees that that should be very seriously considered.”
“Sir John, given the opportunity, as you are now, would you ask to have the right to audit the BBC?”
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