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There is an explanation for that, which is unfortunate. Delivery of a project is not what causes civil servants to do well, because in a Darwinian sense it is not highly enough valued. What is highly valued is the ability to get Ministers out of a hole—I do not blame the present
Government; I think this is universal with Governments of all parties—and to help Ministers explain why things that look like a disaster are “the best that we can possibly have done, considering the difficult combination of circumstances with which we were faced, Minister.” A civil servant who can do that will prosper. That is the fault of politicians, not civil servants.
Mr. Leigh: And until recently, not a single project director had ever become a permanent secretary.
Mr. Bacon: That is a scandal. We must start changing the culture and valuing the delivery of projects, and that requires changes on the part of politicians, so that Ministers are not trying simply to grab a quick headline, but to deliver commitments and see them through. That is probably as difficult for the present Labour Government as it will be for a future Conservative Government. It is a fundamental and inherent problem in delivering good government.
I shall refer to one more thing in the Treasury minutes on the report. We had said in recommendation (ix):
“The Office of Government Commerce and the Delivery and Transformation Group have not had the power to halt failing programmes and projects. The Treasury’s new Major Projects Review Group will however be reviewing all new business cases for high risk or mission critical programmes”.
For some years I have wanted to see some central capacity—some power at the centre— to say, “You’ve failed. No more money. We’re pulling the plug.” It seems obvious that that power should sit in the Treasury, but the Treasury minute answering that point, paragraph 21, says not that the Treasury will have that power, but rather:
“The Government agrees that the MPRG should make it clear to Departmental project owners what they need to do to address its concerns.”
There is enormous fear of greater interference. I appreciate that there are people saying that there is too much interference from the centre with Departments, just as there is from Departments down across the country—but one of my first points, which I hope the Exchequer Secretary will address, is whether the balance is right. We do not want huge amounts of intervention. We want the right intervention and the right power at the right time at the centre. I am not convinced that we have got that balance right.
My next point, which is related, is that the same problems occur again and again. In our 31st report on the Government’s use of consultants is a good example. We said in recommendation (ii):
“Departments and OGC do not routinely know how much money is spent on consultants”,
“Consultants are often used when in-house staff have the necessary skills and are less expensive”,
“Departments do not routinely assess the value of the work they receive from consultants”,
“The capability of departments to be intelligent customers”—
the point made by the hon. Member for North-West Leicestershire—
“is weakened by insufficient sharing of information on consultants’ performance”,
and in recommendation (vi) that
“40 per cent of clients consider they have used consultants when it was not necessary.”
We said in recommendation (viii):
“Departments do not regularly plan for, or achieve, the transfer of skills from consultants to their staff to build internal capabilities”
“Some consultant charges lack transparency”,
The interesting thing is that not only were all those recommendations and the themes relating to them clearly identified in our Committee’s 2002 report on better value for money from professional services—we make this point in our recommendation (i), which the Treasury refers to in its minute in reply on page 31—but the Cabinet Office identified those problems in a study which its own scrutiny unit did eight years previously, in 1994. It stated clearly that the Government were poor at identifying when consultants should be used, poor at appointing them, poor at project management during the process, poor at transferring skills to in-house staff and poor at learning lessons for the future.
None of this is new at all, which is why I asked the Exchequer Secretary about the tension between the centre and the local and the centre and the Department, and about whether, without being heavy-handed or bureaucratic, things can be done to improve that balance. I hope that she will find time to address that issue specifically.
I have been reading Michael Barber’s book “Instruction to Deliver”, in which he discusses the need to improve Departments’ performance, in an environment in which the Treasury would not co-operate. He refers to Sir David Normington, who is now at the Home Office, telling him about the problems that he would face. The Treasury would shut him out, permanent secretaries would neither talk to him nor give him information and he would not be able to get to the Prime Minister—then Mr. Blair—because the policy unit would be in the way. That meant that he would probably be finished before he even started, so he had to think about how to get round the situation. He proposed a series of simple measures and behaviours to be adhered to—including, by the way, abolishing the delivery unit after a few years. He thought that that would help to improve its performance, and I think that in some ways it did. The whole story illustrates a vexing and long-term problem in the nature of how we govern ourselves, and I would be interested in the Exchequer Secretary’s thoughts on that.
Finally, I want to say a quick word about the BBC. I see no good reason why it should not be subject to the same degree, quality and type of scrutiny as other bodies that undertake public expenditure. The criticism that it, an important national institution, has come in for recently may be down to the fact that it has not had enough of the right scrutiny early enough. I am sorry that the hon. Member for Falmouth and Camborne is no longer in her place, because a good example of BBC extravagance took place in her constituency, when Dame Ellen MacArthur arrived back from sailing around the world. We are all familiar with BBC
producers turning up to cover the same event; I have asked people, as a party game, how many BBC producers they think turned up to cover the return of Dame Ellen. They usually say five, 10, 15, 20 or even 30—but in fact 64 BBC producers were there. With the best will in the world—
Mr. Deputy Speaker: Order. The hon. Gentleman is going a little far from the brief that is before the House; I suggest that he steer his way back.
Mr. Bacon: I shall steer away from those rip tides, Mr. Deputy Speaker, but I hope that the Exchequer Secretary will think about that issue, because I know that other Members, including the right hon. Member for Swansea, West (Mr. Williams), are concerned about it.
I shall make one other point before concluding. The Public Accounts Committee’s 20th report on the national programme for IT stated on page viii:
“We are concerned in particular that iSOFT’s flagship software product, ‘Lorenzo’—on which three fifths of the Programme depends—is not yet available despite statements by the company in its 2005 Annual report that the product was available from early 2004.”
The software company said that the product would be available, but still it was not. Paragraph 33 of the Treasury response stated:
“The Lorenzo product is expected to be available during 2008.”
I will not dwell on the issue, because I am a bit bored with making well-researched and informed speeches on the national programme for IT in the health service, only for Ministers to say things that are manifest nonsense. I shall not encourage the Exchequer Secretary to say something that is probably not true; all I ask is that she, or one of her colleagues, will come to the House to inform us when the Lorenzo product becomes available. I do not think that paragraph 33 is true; time will tell us that.
I said that I would refer only to paragraph 33, but I should also refer to recommendation 4, one of the most important of our report. It stated:
“In view of the slippage in the deployment of local systems, the Department should also commission an urgent independent review of the performance of Local Service Providers against their contractual obligations.”
The purpose of that recommendation was to help the Treasury and central Government in their battle against computer contractors. Such an independent review would show that the local service providers had failed in respect of a whole panoply of contractual obligations into which they had entered, and make it much easier to unravel the contracts without huge cost to the taxpayer.
7.54 pm
Mr. Philip Dunne (Ludlow) (Con): It is a great pleasure to follow my hon. Friend the Member for South Norfolk (Mr. Bacon), who confirmed his six years’ experience on the Public Accounts Committee. That considerably outweighs mine; I have just had my first anniversary.
I have also enjoyed serving on the Committee. I have come to appreciate the value of its work in identifying
management failings in the public sector—whether they involve value-for-money or efficiency issues. We have heard many such failings rehearsed by hon. Members this evening.
I should like to highlight one particular aspect of the Committee’s effectiveness which I have noted from a number of our evidence-taking sittings. It appears that the threat of a National Audit Office investigation followed by a PAC report can have an electrifying effect on the relevant Department or agency. When the permanent secretary or chief executive of the agency come before us, they quite regularly seek to respond to our questions by pointing out what improvements they have made since the National Audit Office report was written.
As the hon. Member for Great Grimsby (Mr. Mitchell) said, there is a considerable delay between the publication of the NAO report, our meeting to discuss it, the publication of our report and the publication of the Treasury minute. During that whole period, the Department or agency concerned is under a degree of scrutiny. In many cases, their ability to point to improvements resulting from what has been flagged up in the initial investigation is remarkable. That is clear evidence of the effectiveness of our Committee, and I doubt whether other Select Committees have such an effect; I am sure that they do on some issues, but not as frequently as ours does.
The Committee also occasionally has an electrifying effect on Ministers, who, although they do not appear before us, can make policy adjustments as a result of our conclusions. Sometimes, such measures include the ultimate rectification, which may lead to the scrapping of the initiative or the agency—we have even seen the scrapping of a Department in the past year or so.
I should like to give two specific examples of the effectiveness of our work. The first comes from the 11th report on supporting small business, published on 6 February this year. The Small Business Service was formed in 2000 as an executive agency within the Department of Trade and Industry. On 19 June 2006, a month before I joined the Committee, the PAC took evidence following a highly critical NAO report, which had identified 265 separate funding streams within the Small Business Service. They were included in a total of some 2,500 business support schemes promoted by various branches of the Government. The then Chancellor had spotted that that was a potentially inefficient way to help business, and in the 2006 Budget he announced an initiative to reduce the schemes to a mere 100.
In autumn 2006, the decision was taken to reform the Small Business Service, which has now been reconfigured as a policy unit within what was then the DTI, with 50 core staff—some 10 times fewer than in 2004, when it employed more than 500 people. Since the publication of our report, the Small Business Service has been rectified out of existence and ceased to have executive agency status. On Monday, I looked at the website of the Department for Business, Enterprise and Regulatory Reform to see how many schemes were still in operation. The Minister may well be on top of this, but she might be surprised to know that of the 2,500 original schemes, 2,497 were in
operation, despite the Chancellor’s proposal to reduce the figure to 100. She may like to comment on that in her closing remarks.
This morning, I had a meeting with representatives of the Engineering Employers Federation for the west Midlands. During a wide-ranging discussion of support measures for business, one of the messages that came out loud and clear was that there is still considerable confusion about the provision of advice from Government to business. There is a plethora of advisers and schemes but a shortage of cash to help business with the promotion of their endeavours, whether domestically or internationally through exports. I encourage the Minister to consider the proposals in the pre-Budget report to change business taxation, because another message that came across loud and clear is that the changes to capital gains tax, supplementary business rates and increased corporation tax rates for small business are extremely unwelcome in that sector. Taking some advice from the business community on those measures, alongside work through the plethora of schemes that I mentioned, could well have much more impact on promoting small business. I hope that the Minister will consider that.
The second report of our Committee that clearly had an impact was our 37th report on the Child Support Agency and the implementation of the child support reforms. The failures of the CSA have been well rehearsed in this Chamber over many years. The Government have now decided to replace it, and introduced legislation to do so in June this year. They had looked at the Committee’s conclusions, and I think that we can take some credit for helping to identify failings in three specific areas. The first of those concerned the identification of uncollectible debts. As we know, the CSA has some £3.5 billion of debts from non-resident parents. The Committee identified, through the persistence of our questioning, that of that amount £1.9 billion is deemed to be uncollectible, partly because the debts were attributed to non-resident parents as a device by the officers involved to try to frighten them into making a contribution by putting a debt on the system which could subsequently not be taken off because of IT incompetence. The system’s inability to correct that anomaly was one of the fundamental reasons why it was decided to scrap it.
The second area concerned the backlog of cases stuck between the different phases of the system, where progress was being made but it was painfully slow. More than 100,000 cases remain stuck, and nothing can be done. The third area concerned our pointing out the effectiveness of similar schemes in other countries, particularly Australia. In our conclusions, we identified the effectiveness of the Australian system in providing access to personal tax information on non-resident parents as being an effective way of establishing their genuine income rather than their claimed income. I believe that the Government have taken that on board in the legislation they have introduced and there will be access to information held by Her Majesty’s Revenue and Customs. I welcome that.
I should like briefly to touch on a few other reports to highlight some of the areas where we have been helpful or could be helpful to the Government in looking at ways to improve delivery of public services. In March this year, our 13th report on smarter food procurement covered a whole range of aspects of
Government procurement designed to provide not only efficiency in the use of public money but other policy initiatives. We have heard about the importance of healthy eating as a means of trying to address public health among children in schools, including in relation to obesity. The public sector could play a much greater role in encouraging the health of our children and young people.
More effective procurement can lead to direct cost savings for the agencies involved, as well as much wider social and economic benefits. That does not apply only to health. With the advent of bluetongue disease, which now covers most of southern England, a major role could be played by Government Departments, especially the Ministry of Defence and other major procurers of large quantities of meat products. If they were required to buy British meat, as opposed to importing it from other countries, that could have a significant impact on improving the lot of British farmers who are suffering all over the country.
That brings me to our 32nd report on the Department for Environment, Food and Rural Affairs, where we looked at rights of access to open countryside. As a result of persistent questioning through our Committee when we met last November, we established for the first time that DEFRA budgets had been cut across the piece as a means of paying the fine that had been imposed as a result of the Rural Payments Agency fiasco. Although the amounts of money in relation to this particular programme were quite small—just over £1.1 million had been cut from that year’s budget—it was the first time that I had been aware that the Treasury was seeking to resolve the payment of the fine by slicing budgets across its programmes. Harking back to the comment about who gets rewarded or suffers the consequences following failures within Departments, I remind hon. Members that not only civil servants get rewarded for abject failure, but Ministers too. The Secretary of State at DEFRA at the time of the RPA fiasco was subsequently promoted to Foreign Secretary.
Our 19th report was entitled “A Foot on the Ladder: Low Cost Home Ownership Assistance”. We discovered through our questioning that very little information had been available on the effectiveness of measures to encourage low-cost home ownership or on what happens after funds are deployed to help people to get their first foot on their housing ladder. That is another example of persistent questioning in our Committee encouraging officials to respond appropriately to the relevant criticisms that have been made. The Treasury minute in relation to our suggestions confirmed that it would accept most of our recommendations—for example, on measuring how many households had increased their proportion of ownership after the initial purchase of an interest in a shared equity mortgage property, on how often the purchase of a property through one of these schemes helps to free up social rented housing elsewhere in the locality, and on the effectiveness of the help provided to key workers in seeking to get them housed in areas close to where they work. The Government could also learn lessons from advice from other quarters on how to encourage home ownership. My hon. Friend the Member for Tatton (Mr. Osborne) has made some significant proposals to abolish stamp duty, which would have a dramatic impact on encouraging first-time home ownership.
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