House of Commons - Liaison

Select Committee on Liaison First Report

Appendix 4: Memorandum on the work of the Scrutiny Unit

Work of the Scrutiny Unit in 2005-06

Overview

1. The Scrutiny Unit was established in November 2002, following the recommendations of several committees of the House. Its key aim is to maintain and improve the House's ability to perform its scrutiny function. In particular:

it provides staff for joint committees on draft bills;
it assists select committees and others within the House, mainly but not exclusively in the areas of government expenditure, performance reporting and pre-legislative scrutiny.

In fulfilling its role, it seeks to develop expertise and best practice and improve the quality of its work by developing relationships with relevant organisations outside the House.

2. In 2005-06 the Unit maintained a high level of activity, undertaking a wide range of tasks for select committees and in support of the wider work of the House. Much of the work carried out by the Unit concerns the scrutiny of expenditure and performance: a core activity is our regular analysis of the Government's financial reporting to Parliament. The Unit has also played an important role in supporting committees in their examination of draft Bills. However, a particular feature of the period under review, due in part to the decline in the number of draft bills, was the volume of other tasks carried out in support of committees. The breakdown of the Unit's work by broad category in figure 1 makes this clear.

Figure 1: Mean division of Scrutiny Unit staff time (%), 2005-06 Session

3. The change in the Unit's work patterns can be seen by comparison with previous sessions. For instance, in the 2003-04 Session, draft bills accounted for 68% of the Unit's work, expenditure 22% and "other" tasks only 10%.[230]

Staffing of the Unit

4. In 2005 and 2006, the Unit maintained the level of staffing which it reached in 2004. Its current complement is 18, comprising: two legal specialists and an economist on short-term contracts, a statistician on secondment from the House of Commons Library, three financial analysts on secondment from the National Audit Office, an estimates specialist on secondment from a government department, an inquiry manager; and a core team of the Head of Unit and two Deputy Heads (Finance and Legislation), a committee assistant, a team manager, two chief office clerks, a senior office clerk and an office support assistant. In addition, the Unit hosts an ESRC student on a regular short-term placement. As in previous sessions, the turnover of staff has been high compared to other parts of the House service, but this is mainly due to the large number of staff on secondment and contract.

Financial scrutiny work for select committees

5. The Unit continues to assist Select Committees in their core tasks of examining departmental expenditure (core task 5) and examining performance against key targets in the Public Service Agreements (core task 6). We routinely provide Committees with briefing on Main and Supplementary Estimates (including analysis of estimates memoranda), resource accounts, Autumn performance reports and Departmental Annual Reports (DARs) of all the major government departments and agencies. The Unit's economist and statistician have also contributed their skills to a number of select committee inquiries. The finance team was, and continues to be, very active in its support of the Treasury Committee.

6. A particularly successful example of the Unit's role in helping committees improve the government's financial reporting was its work for the Communities and Local Government Committee in its inquiry into the Department for Communities and Local Government Departmental Report, which led to improvements in the Department's Estimates Memorandum.

7. Several Departments improved their financial reporting following work by the Unit in support of committees. For instance, Unit staff met staff from the Department for Work and Pensions to discuss their estimate memorandum, and DWP is now an example of best practice for Estimates Memoranda. The Unit's work on the quality of Estimates Memoranda informed the Liaison Committee's Report on the subject.[231]

8. The Unit's over-arching review of the 2005 DARs, based on work done for committee inquiries, resulted in recommendations to the Treasury about how they could be improved. These were presented at a series of workshops organised by the Treasury for departmental staff—one example of how we seek to fulfil our aim of identifying and sharing good practice.[232]

Legislative scrutiny

Draft bills

9. Draft Bills are currently considered by ad hoc Joint Committees of both Houses or departmental Select Committees (in pursuit of Core Task 3). The draft Legal Services Bill was the only one to be committed to a Joint Committee during 2005 and 2006. The Unit contributed three members of the committee's six staff, who with their three Lords colleagues were involved in a highly intensive period of work. The Committee held seven evidence sessions in a month and reported just two months after the Bill was published.[233]

10. Scrutiny Unit staff have also supported departmental select committees in their examination of draft Bills. For instance, the Unit's legal specialist conducted the Constitutional Affairs Committee's inquiry into the reform of the coroners' system and death certification, which examined the draft Coroner's Bill. The Committee's report had a significant influence on the Government's radical rethink of its proposals. A member of the Unit's core staff also acted as committee assistant for the joint inquiry by the Home Affairs and Work and Pensions Committees into the draft Corporate Manslaughter Bill.

Pubic Bill Committees

11. The Modernisation Committee's Report of September 2006, The Legislative Process, contained proposals, agreed by the House at the end of the 2005-06 Session, to reform the process of examining legislation. A major innovation is the introduction of evidence-taking powers for nearly all Committees on Bills. This has created a significant new role for the Scrutiny Unit in co-ordinating written and oral evidence to the new Public Bill Committees. This new role is expected to increase in the future when more bills are subjected to this procedure, and a modest increase in staff has been agreed from the start of 2007 to allow for this.

Regulatory Reform Orders

12. Another new area of work for Unit staff has been assisting the staff of the Regulatory Reform Committee in its scrutiny of Regulatory Reform Orders made under the Regulatory Reform Act 2001.

Other work for committees

13. The Scrutiny Unit has always supported departmental select committees in areas outside its core specialisms of financial and legislative scrutiny. This is a form of "surge" capacity when committees have faced unexpected demands or temporary staff shortages. The Unit's work in this field has shown the value of being able to deploy specialists in more general analysis roles. The lack of draft Bills during the 2005-06 Session led to a substantial increase in the more general work that could be done for the Committee Office by the Unit's specialists. This included a range of support, from providing briefing for one-off evidence sessions, through managing specific inquiries, up to full-time loans of staff to committees, e.g. to the Treasury Committee and the Joint Committee on Human Rights.

14. A new practice for the Unit is the placement of administrative staff on a short-term basis elsewhere in the Committee Office. One of the Unit's office clerks spent several months as the only member of support staff for the Armed Forces Bill Committee, followed by a period acting as secretary to one of the Committee Office Principal Clerks. Another of our office clerks worked for most of 2006 as the committee assistant on the Select Committee on the Crossrail Bill.

Wider work

15. The Unit prioritises its work for select committees, but has a significant role in supporting other parts of the House service. A major piece of work this year, which involved staff from all parts of the Unit, was a review of the Electoral Commission for the Speaker's Committee on the Electoral Commission. This was welcomed by the Speaker's Committee and described by the Committee on Standards in Public Life as providing extremely useful background and evidence for its inquiry into the Electoral Commission.[234] It has led to the Unit acquiring a continuing role in the scrutiny of the Commission's annual draft budget, advising the Speaker's Committee and its sub-committee. The Unit has also reached beyond Westminster, providing analysis and briefing for the United Kingdom delegation to the NATO Parliamentary Assembly on the Assembly's draft 2007 budget.

16. The finance team, working in support of the Liaison Committee, has made contributions to several Treasury consultations, including:

proposed changes to Departmental Annual Report common core and Supplementary Budget Information tables;
proposed merging of DARs and Resource Accounts into one document;
changes to the Public Expenditure Statistical Analyses.

Members of the finance team also commented on the Treasury's revisions to the Government Accounting handbook, and a member of Unit staff supports (and deputises for) the Parliamentary observer on the Treasury's Financial Reporting and Accounting Board (FRAB).

17. Unit staff contributed to the inquiry by the Hansard Society on financial scrutiny by Parliament that resulted in the report The Fiscal Maze. Subsequently, the Unit has been supporting the Liaison Committee's working group on improving financial scrutiny. The Unit contributed to the Law Commission's inquiry into post-legislative scrutiny and is now assisting the Liaison Committee's working group on the subject. Finally, the Unit submitted a paper to the Cabinet Office's consultation on regulatory impact assessments, based on our regular analysis of RIAs on draft bills.

18. Figure 2 gives a broad indication of how the Unit's work is distributed through the year.

Figure 2: Division of Scrutiny Unit staff time throughout the 2005-06 Session

Training and best practice

19. The Unit staff have provided training for House staff and MPs on resource accounting, and a successful workshop on PFI for staff. The Unit also took the lead in organising training for Government and Clerk's Department staff on the evidence-taking aspects of the new public bill procedures. As well as advising on best practice in financial reporting in Whitehall, the Unit frequently plays host to staff and members of overseas legislatures, explaining our work and responding to questions about how they might improve their own scrutiny functions. During 2006, work was undertaken on a new guide for Members on financial scrutiny, which is to be published in March 2007.

The future

20. The Unit has been in existence for nearly five years. Judging by the level of demand from committees and other parts of the House service, it has become accepted as an important provider of advice and support in the committee office. On current trends, it seems likely that demand for its services will be maintained, or—more probably—increase. The Liaison Committee's work on financial scrutiny may lead to further calls by committees on our expertise. Even without an increase in the number of draft bills, the development of evidence-taking public bill committees on government bills will keep the legislative side of the operation busy, and the Law Commission's proposals on post-legislative scrutiny envisage an enhanced role for the Unit. The ongoing review of Committee Office resources provides the ideal context in which to consider the current and future demands placed on the Unit, and the best way in which it can respond to them.

Matthew Hamlyn

Head, Scrutiny Unit

March 2007

Annex: Draft Bills published since Session 1997-1998

Session Number of draft bills published Number of Government bills published

1997-98 3 53

1998-99 6 31

1999-2000 6 40

2000-01 2 26

2001-02 7 39

2002-03 10¹ 36

2003-04 12 36

2004-05 5² 32

2005-06 3 58³