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As my hon. Friend the Member for Gloucester (Richard Graham) pointed out, there are many park home sites up and down the country and many park home owners.
In England alone, there are 85,000 park home owners, spread across 2,000 sites. In the main, as the hon. Member for Eastbourne (Stephen Lloyd) eloquently stressed, the sites are run well; they are good places to live. Park homes are comfortable and relatively easy to maintain. They are relatively low cost and affordable. Most of them-certainly those in my constituency-are in pleasant locations. They are nice places to live. Whether park home sites are well or poorly run, they have a strong sense of community.
On a minority of sites, residents face many great problems. In my constituency, the spectrum of problems ranges from sites that are somewhat poorly managed to those where there are blatant breaches of health and safety regulations, many along the lines highlighted by the hon. Member for Ellesmere Port and Neston (Andrew Miller). In my constituency, at the uglier end of the spectrum, there are examples of intimidation, particularly of vulnerable and elderly people. Intimidation often affects the mental health of elderly residents and can, on occasion, result in great financial loss, as we have heard from many Members this afternoon. I echo the comments made by many Members, and congratulate Sonia McColl on her justice campaign, on pressing so firmly on this important issue and on the work and energy that went into arranging the lobby of Parliament on 3 November.
There are a number of challenging issues, many of which have been raised this afternoon, relating to the operation of park home sites. We have heard much about the importance of the approval of the buyer stage, when an unscrupulous park site owner can put people off and use the rules to make sure that the park home owner does not achieve fair value for their property. In 1990-91, a Department of the Environment survey showed that 25% of park home owners expected problems with the sales process in the future. Of that 25%, some 51% felt that the site owner or the owning company would be the cause of the problems.
Mrs McColl is particularly keen that the approval of the buyer stage should take place in the presence of a solicitor or at a solicitor's office. I think we should be slightly cautious here, because I am not convinced that that requirement, in and of itself, will solve the problem, and it will add to the cost of the transactions. But where a wrong has been done there should be quick redress at low cost, and substantial damages should be available to those pursuing unscrupulous site owners.
The second area of sale that I wish to address is that of what I would term the forced sale, in which the unscrupulous site owner intimidates and pressurises a resident off the site. The reason for that is clear; as many hon. Members have said, once that home is gone, perhaps a larger home can be placed on that site and profits will follow. My understanding is that some of the problems relate to the Mobile Homes Act 1983, whereby site owners can sometimes claim that an existing home has a detrimental effect on the amenity of the site. That point was raised by Shelter, whose mobile home unit looked into the issue. I therefore urge the Minister to pay careful attention to that aspect of the Act.
Several hon. Members, including my hon. Friends the Members for Waveney (Peter Aldous) and for St Austell and Newquay (Stephen Gilbert), have raised the issue of sales commission on park homes that are sold. I know that many park home owners feel it is inherently unfair
to have to pay 10% of the value of their property on sale. They will argue that the site owner may have contributed nothing to the sale, and in many circumstances the owners of those homes have enhanced them at their own expense, adding to their value.
We should proceed with caution, however, because in order to make a profit a park home operator will look at all the revenue streams that go into the business, of which commission on sales is but one. It is quite conceivable that if that were reduced or removed, pitch fees would be higher, as the consultants Berkeley Hanover suggested in its 2001 report. It suggested that pitch fees might go up by 20% to 32% if commission was removed altogether. It is the case that where commissions have been reduced in the past from 15% to 10% due to legislation, there has been evidence that pitch fees have increased.
The second danger of removing commissions is that it might inflate the price of what at the moment are relatively-I stress, relatively-affordable homes, and that would be a detrimental move. It is very important that we keep the up-front affordability of these homes for individuals who may wish to buy them in the future. Indeed, the Shelter report did not recommend any reduction in the commission rate.
Several hon. Members have spoken about site conditions and licensing. Licensing was introduced under the Caravan Sites and Control of Development Act 1960, which gave local authorities the ability to impose conditions on site licences, and also the power to enforce those conditions. But it did not confer on local authorities any duty to enforce conditions on recalcitrant site owners. Those conditions, on which enforcement action can be taken, would include requirements not only on the spacing of the homes across the site, for example, but on the provision of-sometimes vital-amenities on the site. So it is very important that the Minister looks closely, as I am sure he and his colleagues are doing, at licensing and whether we should make it a duty of local authorities to intervene where there are significant breaches of those licences.
We should also look closely at local authorities' right to refuse or revoke the site owner's licence if there is good cause, as my hon. Friend the Member for Isle of Wight (Mr Turner) said. In those circumstances, if there were a revocation, we would need to ensure that the local authority had a clear strategy for providing the services and ensuring that the site continued to run in a safe, decent and reasonable manner.
I urge the Minister to look at giving local authorities the ability to take emergency remedial action when things do not happen appropriately on a site, and to charge the site owner for any remedial action that is taken. Local authorities could be given the authority to charge for licences to cover some of the costs of them, and, when there are appeals in the system on such matters, they might be handled by the residential property tribunal.
Much has been rightly said in this debate about the "fit and proper person" qualification, which was a strong recommendation of the park homes working group. There is no doubt that the park homes business is distinctly different from many others. It is not like running a shop or a pub, whereby, if one is rude to customers or runs the business badly, one can expect to see profits diminish and to go out of business. Site owners effectively have captive consumers and people
whose lives they can and, as we have heard in many instances this afternoon, do make a misery.
Given how the economics of the business work, we should not be surprised by such abuse. There is a premium to be gained by bullying people and by pushing somebody out of their home inappropriately, because there are profits to be made as a consequence. The whole market has built into it the dynamics for abuse of one form or another.
I know that the Housing Minister is thinking about the issue very carefully, but I urge the Minister before us to consider seriously a "fit and proper person" qualification. One objection to the approach is that it might be complicated and difficult, but we already apply it to people who own houses in multiple occupation, so some local authorities already have experience in exactly that area.
Some Members, including my hon. Friend the Member for New Forest East (Dr Lewis), have said that residents associations have been quite effective in dealing with difficult situations on park home sites, and I welcome the Mobile Homes Act 1983 (Amendment of Schedule 1) (England) Order 2006, which permits such associations to be set up and, indeed, requires site owners to recognise them, subject to certain conditions, including one whereby more than 50% of residents on a site must become members. The Government would do well to encourage at every turn, with whatever legislative changes they bring in, such residents associations and to give them authority wherever they possibly can.
Annette Brooke: I should like to report on some further good practice by Purbeck district council, which has set up a forum for park home owners, so that they can go and share their issues. That is a very good way of backing up residents associations.
Mel Stride: I thank the hon. Lady for that helpful and informative intervention. I am grateful and pay tribute to Buckingham Orchard Residents Community Association in my constituency, which has done a great deal and fought hard to improve conditions on its site. I shall certainly take the hon. Lady's suggestion of a forum and such activity to that association to see whether it might benefit from that.
Finally, dispute resolution at the moment typically means going through the county courts, and doing so not just at great expense, but often in the face of numerous delays, because unscrupulous site owners are adept at stringing things out and making things difficult at every turn. We have all heard the stories in which site owners fail to turn up, give a reason and there has to be a re-hearing. They just wear people out, which is why I particularly welcome the Government's commitment to a residential property tribunal. However, it is absolutely essential that such a tribunal is quick to deal with grievances, that there is a minimum of delay involved and that it is not expensive to use. On 14 July, in referring to residential property tribunals, the Minister for Housing stated:
"This will mean that park home residents will be able to take action to resolve disputes with site owners, without being restricted by the prospect of facing large legal costs."-[ Official Report, 14 July 2010; Vol. 513, c. 28WS.]
That is absolutely critical. We are dealing with people who are among the least advantaged in our society and cost must be driven down to give them a route to justice.
We should also toughen up on fines and give the tribunal real teeth. At the moment, a breach of a site licence carries a maximum fine of £2,500. In many cases, that is simply not enough to deter the kind of activity that we have been debating this afternoon. I urge the Minister to consider whether there should be an escalation of fines for repeat offences, because we are aware that some site owners do the same things over and over again. Those people should be penalised more heavily each time around.
Many of the things I have raised and that other hon. Members have touched upon may not be achieved simply through secondary legislation. We may need primary legislation. I hope that the Government and the Minister have the political will to ensure that the time required to push forward these changes is made available. We need to act to remove the last refuge of Rachmanism in this country, because that is what we are dealing with; we need to act to stand up for the vulnerable and the elderly who suffer in the circumstances that I and many others have described; and we need to act for the many self-reliant, proud and decent park home residents, who ask nothing more than that they are treated with fairness, dignity and respect.
Madam Deputy Speaker: Order. Before I call the remaining speakers, by way of information, I point out that the wind-ups are due to start around twenty-five to 4. The remaining contributors might want to reflect on how they can ensure that their colleagues get in as well.
3.17 pm
Martin Horwood (Cheltenham) (LD): I will not detain the House long. As many other hon. Members did, I congratulate my hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) on tabling the motion. I will happily support it on behalf of my constituents who live at a number of sites in Cheltenham-Sunnyfield lane in Up Hatherley, The Reddings and Harthurstfield park in west Cheltenham. Having named those locations, I emphasise what other hon. Members have said: it is a minority of site owners who are involved in many of these abuses. However, as other hon. Members have also pointed out, the power relationship that exists under the current system between site owner and home owner is so uneven that it almost invites some of these abuses.
Park home living can be a wonderful lifestyle, as it is for many thousands of people. Generally, it involves smaller homes with low maintenance costs that are on the lowest council tax band, on one level and on small plots in parks that engender a strong sense of community. Knocking on doors in the places I have mentioned is certainly a cheerful experience-not least because of some of the wonderfully quirky ornamentation and individual decoration that is often on show
A leading insurer tells me that the incidence of crime on parks is very low. Such homes have low insurance costs and represent a very safe lifestyle. Affordability and safety are key because, as has been pointed out, many residents are elderly and very few are well off. It is unfortunate that the industry is plagued by a small number of unscrupulous operators who, frankly, make
their residents' lives a misery. I shall not repeat the issues of fees, charges and services that many hon. Member have mentioned. Instead, I will highlight again the issue of buying and selling, particularly the approval-of-the-buyer stage, where the park owner meets privately with the prospective buyer. That represents such an obvious conflict of interest that I cannot imagine even the most angelic of site owners not being tempted at times to talk down the value of a park home in order perhaps to make a killing at some stage in the future. It is clear that in many cases the owner, out of desperation, ends up selling back to the site owner, often for a derisory sum, and the site owner then has a vacant plot to develop at a huge profit. At that point they have, in effect, stolen the homeowner's equity, which sometimes represents the homeowner's life savings, so it is a very serious issue.
I very much welcome the Government's intention to transfer jurisdiction to residential property tribunals-a positive step that should address many of the broader issues of fees, charges and so on that crop up from time to time. However, I am not absolutely sure that it will solve the central problem of sales, because often by the time a residential property tribunal process has been completed-evidence has been presented, the tribunal has ruled, and a decision has been communicated-the buyer will be long gone. As one expert professional constituent of mine said,
"I cannot think of a more appropriate sector for there to be some sort of fit and proper person test, some of these owners are merciless."
A fit and proper person test would be a strong supplement to the residential property tribunal policy that the Government are proposing. That is one of the reasons I strongly support the motion.
I should like briefly to mention the parallel issue of owners of mobile holiday homes. The hon. Member for Sittingbourne and Sheppey (Gordon Henderson) has already referred to this, but I have a slightly different concern that has been raised by several constituents of mine who are permanent residents of Cheltenham but own static caravans or mobile homes in Swanage bay in Dorset, which I suspect is near to the hon. Gentleman's constituency. Once again, these owners are not wealthy and are at the mercy of site owners who stand accused of reducing the market price of mobile homes artificially and then buying them themselves with the potential for a tidy profit. Again, we have the issue of fees, with the site owner apparently seeking an increase of nearly 50% in one year, in contravention of existing licences and Office of Fair Trading guidelines.
Margot James (Stourbridge) (Con): I, too, have a constituent who has a pitch in the Swanage Bay View holiday park, which may or may not be the same as the park that the hon. Gentleman is talking about, where pitch fees have been increased by 22.5% over the past 12 months. There is a huge amount of pressure on older residents to sell up, with a lot of very commercial tactics being used to abuse their position.
Martin Horwood:
I thank the hon. Lady for that intervention. We are certainly talking about the identical issue, if not the identical park, and once again we are talking about people's life savings being at risk, often vulnerable elderly people. This is an almost entirely unregulated sector, and unless it is included in Ministers' plans for residential property tribunals, it will remain
so. Does the Minister have plans to include mobile holiday homes in any of the moves that he is making to establish residential property tribunals? If he cannot answer me now, perhaps he will write to me with his intentions or the Government's view on that issue.
I am proud to support this motion. Since a minority of site owners apparently cannot be trusted to be fair to often vulnerable and elderly homeowners, it is vitally important for Parliament to step in.
3.24 pm
Dr Sarah Wollaston (Totnes) (Con): This afternoon we have heard from Members tales of fraud, neglect, intimidation and vandalism. For me, this is not a complicated issue. As a doctor, if I committed any of those crimes I would very quickly be declared not a fit and proper doctor and struck off. I call on the Minister to consider seriously the ability to designate people not fit and proper site owners.
It is obvious from attending the all-party parliamentary group that the same names keep cropping up. It is evident that we are talking about probably fewer than 10 owners who commit these crimes across the country. Many of my constituents have relayed shocking tales of crime and fraud, but are genuinely too intimidated to go to the police.
We have heard excellent suggestions-I will not repeat them-from my hon. Friend the Member for South Swindon (Mr Buckland) and I join in the congratulations for the hon. Member for Mid Dorset and North Poole (Annette Brooke) on initiating this excellent opportunity for debate. I call on the Minister to take action, because we have waited long enough. I hope that he has listened to what all hon. Members have said.
3.25 pm
Chris White (Warwick and Leamington) (Con): Thank you, Madam Deputy Speaker, for trying so hard to decipher my signature so that I could catch your eye. I think that I am the last Back Bencher to speak in this debate, so I add some final congratulations to the hon. Member for Mid Dorset and North Poole (Annette Brooke) on raising this issue, which is so important for many hon. Members.
Like many hon. Members, this issue was first brought to my attention while I was a candidate. It was important to meet the Heathcote Park residents' association and its chairman, Mary Hulett. Many park home residents feel unfairly treated and ignored, and are frustrated at the slow pace of reform and regulation. I am sure that Members from all parts of the House will welcome the transfer to the residential property tribunal, which will reduce the cost of resolving disputes and empower residents. I am sure that it will be a positive factor for the sector.
I agree with the notion of fit and proper person criteria for park home site owners, and that there should be regulations that can be used against site owners who interfere with the sale of individual park homes without good reason. However, the problems are far wider than that and much more needs to be done if we are to have a fair and well regulated park homes sector. I believe that the primary way in which the Government can assist is through the creation of a strong licensing regime. I
believe that "Park homes site licensing reform: The way forward and next steps" laid out the pathway for that.
We must also tackle the disreputable practices of some site owners. That could be done through capping increases in pitch fees to the retail prices index, or by preventing consecutive increases above RPI. That would prevent site owners from suddenly springing large pitch fee increases on owners, which is particularly important in these difficult economic times.
We could also empower park home owners by allowing them to petition their site owners to agree to a framework for developing a sinking fund for repairs and maintenance. For example, if 75% of park home residents petitioned the site owner, the owner would have 12 months to develop a framework that was acceptable to the majority of residents. If site owners did not comply, an ad hoc tribunal could be set up to force a settlement that was reasonable and fair to all sides. Although some hon. Members may feel that that would be too harsh on site owners, I believe that for too long the law has been weighted on the side of the site owner, rather than that of the resident.
If residents put forward reasonable proposals and there is a degree of consensus, I do not see why a site owner should be able to refuse their requests. Well maintained park homes are in everyone's interests. I appreciate that interventions should take place only when absolutely necessary, but we must not allow site owners carte blanche to do whatever they want. There must be a relationship of trust and co-operation to create sustainable communities. In my constituency, all residents want is a bit of fairness.
More must be done to myth-bust the idea that park home owners should not form residents' associations. It is important that park home residents have a forum in which to air their grievances and to discuss them with their neighbours. Although the vast majority of site owners are happy for that to occur, some are keen to break up such important associations. It is vital that we give residents proper protection, and through the use of petitions and residents' associations I believe we can go some way towards doing that.
I have one final point to make before I conclude. Park home site owners have to do more to name and shame owners who are not operating in a fair manner. The British Holiday and Home Parks Association should, where there is evidence, be willing to publish lists of site operators who are not responsible in their dealings with park home residents, and so warn individuals who are considering purchasing park homes. Ultimately, if incidents involving disreputable site owners continue, it will only further damage the sector. It is in everyone's interest to do what they can.
All hon. Members who have had to deal with constituents' problems with park homes know how distressing they can be. We have to remember that we are talking about something extremely personal-people's homes. Our homes are central to our way of life and our quality of life, and people care a great deal about them, as we can see from the 10,000 signatures that were delivered to Downing street. We have to work towards finding more innovative ways to settle the problem for the benefit of park home residents, and to ensure a sustainable future for the park homes sector in general. I look forward to the Minister's contribution and to seeing how we can move forward accordingly.
3.31 pm
Chris Williamson (Derby North) (Lab): I pay tribute to the hon. Member for Mid Dorset and North Poole (Annette Brooke), who has been an indefatigable champion of park home residents for a number of years. I pay tribute also to Members from both sides of the Chamber who have contributed to a very good and powerful debate. They have highlighted some appalling abuses of the situation in which many park home residents currently find themselves.
I do not presume to match the hon. Lady's expertise on the subject, but I am aware from representations that I have received from park home residents that they feel the current legislation is inadequate. They have told me that it does not go far enough in safeguarding their rights and offers insufficient protection against the small number of unscrupulous site owners who can and do exploit loopholes in the law, as we have heard today.
One of the main complaints of residents is the ballooning pitch fees demanded by site owners, because they say they are powerless to resist unreasonable increases. We have heard from the hon. Member for St Austell and Newquay (Stephen Gilbert) and others about distressing examples of such abuse that they have come across in their constituencies. It seems that the standard agreement drawn up by the National Federation of Site Operators, which is now the British Holiday and Home Parks Association, leaves a lot to be desired.
I am aware that about 20 years ago a survey was commissioned for the then Department of the Environment. Residents were asked whether they were consulted by owners on any increase in pitch fees, as they were supposed to be. Only 3% said that they had been. It seems that, 20 years on, there is still a lot to do. I think that there have been some improvements, but the situation has not improved enough.
Mobile home owners have told me that they have sometimes run into problems when they have wanted to sell their homes. Members have referred to those problems during the debate. Site owners often find ways to block sales from going through. Shelter's mobile homes unit found that some owners served notices to terminate agreements, claiming that the homes involved were
"having a detrimental effect on the amenity of the site."
The hon. Member for Central Devon (Mel Stride) referred to that. Although that move is legitimate in some cases, in others it is not. It has been claimed that it is often used to bully park home residents into selling up at knock-down prices, as the hon. Member for Isle of Wight (Mr Turner), who is no longer in his place, pointed out. The hon. Member for Mid Dorset and North Poole has described that as a massive scandal, and it is certainly a cause for considerable concern for many people. As my hon. Friend the Member for Rhondda (Chris Bryant) and the hon. Member for Waveney (Peter Aldous) pointed out, it is a real problem throughout the length and breadth of the country.
In 2006, the previous Government removed the ability of site owners to attach conditions to their approval of prospective purchasers. Since then, the only factor that they can take into account is the suitability of an incoming resident. However, the Park Home Residents Action Alliance says that site owners can still abuse that test.
There was a proposal to transfer the jurisdiction on appeals and applications from the county courts to the residential property tribunals earlier this year, but Parliament was dissolved for the general election before the necessary approval was given. The Opposition therefore welcome the new Housing and Local Government Minister's intention to introduce the secondary legislation that will transfer jurisdiction to residential property tribunals and urge him to press ahead as soon as possible.
However, it is clear that despite the improvements introduced by the previous Labour Government, more needs to be done to protect the rights of caravan and park home residents. Let me assure the hon. Members for South Derbyshire (Heather Wheeler) and for Gloucester (Richard Graham)-the former is no longer in the Chamber-that there is cross-party support for stronger measures. All official Opposition Members want them, and Opposition Front Benchers are united. We want to work with the Government to ensure that appropriate protection for such vulnerable people is introduced.
Much of the groundwork on identifying what legislative improvements need to be made has already been undertaken. The Department for Communities and Local Government consultation paper, "A new approach for resolving disputes and to proceedings relating to Park Homes under the Mobile Homes Act 1983 (as amended)" was published in May 2008. In May 2009, the previous Government published a further consultation document, "Park Home Site licensing-Improving the Management of Park Home Sites". A further paper, "Park homes site licensing reform: The way forward and next steps" was published on 30 March this year.
As I pointed out, the Opposition want to work constructively with Ministers, as my hon. Friend the Member for Ellesmere Port and Neston (Andrew Miller) requested. We want to build on the good foundation that we left to secure a thriving and well run park homes sector that provides sites where people want to live and, indeed, invest. We believe that a licensing system that raises and maintains standards on sites, and one that ensures that sites are safe, well planned and well managed, with appropriate facilities and services, will help to achieve those objectives.
Such a scheme must operate fairly, and it must be proportionate, cost effective and enforceable. An effective scheme must deliver improvements in the management of park home sites where improvements are necessary while continuing to secure a vibrant and healthy sector.
3.37 pm
The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell):
It is a pleasure to respond to this Back-Bench debate and to my hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke)-I always have to get my norths, souths, easts and wests carefully organised when I refer to her constituency. The debate, which featured 14 contributions from Back Benchers, has been well informed, wide ranging and sometimes passionate-hon. Members have given a real sense of the injustice that some park home residents are forced to suffer-and it has come at a good moment, because as my right hon. Friend the Minister for Housing and Local Government already told the House, he will make a statement on this matter in the new year. I will ensure
that all the contributions and the many and varied suggestions and ideas come to his attention as he works on that.
Rightly, many Members acknowledged the broader context. The sector provides homes for 85,000 families and perhaps as many as 150,000 residents, as my hon. Friend the Member for Gloucester (Richard Graham) said. The very large majority of those residents enjoy peace and quiet, and are happy and satisfied where they are. Many sites are properly managed and maintained by decent, honest and professional site owners who have regard to the welfare and rights of the communities in their parks. It is a pity that their good work is often overshadowed by the unacceptable conduct of a minority, about whom we have heard some telling stories this afternoon. That minority can cause misery to a community in many ways; for example, by not maintaining sites properly, by bullying residents and by interfering unreasonably, or even unlawfully, when residents try to exercise their lawful rights. The House has also heard significant allegations of criminal behaviour and even blackmail. However, I do not want to dwell on the specific allegations, except to say in plain terms that the Government believe that the park homes sector should have no place for these people. I want good site owners to thrive and bad site owners to be taken out of the sector.
It is important to note some of the themes that have come out of today's debate. We have heard the stories and anecdotes, which I do not dismiss, but Members on both sides of the House have also recognised that there has to be a balance between the powers and responsibilities of site owners on one hand, and of home owners on the other. We need to reflect on the fact that every home owner, in becoming a home owner, will have had the opportunity to look at the terms and conditions of the sale and purchase. I hope that we might also reflect on how we can make those terms and conditions more transparent to prospective purchasers, and ensure that once signed they are adhered to by both sides.
We have heard contributions about the degree to which regulation should be light or tough. My hon. Friend the Member for Eastbourne (Stephen Lloyd), who declared himself to be a deregulatory Liberal, has come to the conclusion that we need to toughen up regulation, and that was the message, I think, from hon. Members throughout the House. I will ensure, therefore, that that view is conveyed clearly to my right hon. Friend the Minister for Housing and Local Government.
The Government are committed to targeted reform that does not place unnecessary burdens on site owners, who ought to be allowed to thrive. We will not solve the problem if we drive well-run sites out of business because of an overburden of regulation or control. Our first priority, therefore, is to make it quicker and easier for residents to challenge unreasonable behaviour by site owners who disregard residents' rights. My right hon. Friend announced in July that, under the Mobile Homes Act 1983, jurisdiction in the settlement of most disputes will be transferred to the Residential Property Tribunal Service.
I can assure the House that subject to parliamentary approval we intend those tribunals to become operational from next spring. That has been a priority for park home residents for many years, and I am committed to implementing it as quickly as possible. It will enable residents to resolve disputes much more quickly and
easily, and act as a deterrent to unreasonable behaviour. I can also assure hon. Friends that access to the tribunal is normally free, although in some cases there may be a fee of £150. However, legal representation is not necessary, so the cost is much less than for court proceedings. That is a major step forward. It will give residents quicker and easier access to justice, provide an opportunity for rapidly resolving disputes and deter unreasonable behaviour.
Andrew Miller: That is a sensible proposition, but I ask the Minister to reflect on the history of other tribunals that started in a well-meaning way but gradually became more and more bureaucratic and legalistic. As time passes, there will be the risk-starting perhaps with the site owners-that more lawyers will enter the process, so we will need to reconsider the situation after a year or so of running the tribunals to ensure that we have got the balance right.
Andrew Stunell: The hon. Gentleman makes an important and interesting point, but if I may say so, perhaps we should focus on introducing tribunals before we start to evaluate them.
The aim is to improve site management and deter bad practices. That will benefit not only residents, but the industry as a whole. It does the sector no good at all to develop a reputation for bad behaviour. As they pursue their work, the tribunals will provide evidence in an open and transparent way-through a body of cases, involving case law and decision making-which will benchmark good behaviour and identify unacceptable behaviour, thereby playing a standard-setting role.
The motion calls on the Government to review the case for establishing a "fit and proper" licensing system. There is certainly no role in the sector for unscrupulous and criminal operators, but they are a minority. That brings us back to the balance between regulation and the burden of implementation. The Government's general approach is to reduce top-down regulation and minimise the involvement of central Government in local decision making. However, we are committed to protecting the most vulnerable, and I know that some park home residents are among the most vulnerable members of society, as has been well pointed out in this debate. We are not convinced that the protection of park home residents from the minority of unscrupulous site owners requires a complex and costly national licensing system, which would apply across the sector and place burdens on all site owners, good and bad, with that cost ultimately being passed on to residents too. We have to strike a careful balance-one that protects the vulnerable, targets the worst and minimises the regulatory burdens on the law-abiding majority.
On the blocking of sales, I have every sympathy with residents who are unreasonably thwarted when trying to exercise their lawful right to sell their homes. I know that those concerns are shared by my right hon. Friend the Minister of State. The park home justice campaign is to be commended for bringing this important matter to the forefront. Ministers are now well alert-if we were not before-to what the issues are. However, we need to look at what the remedy is. The premise is that unscrupulous site owners might be less likely to make false representations or deter potential buyers if an interview with a prospective purchaser took place in front of a solicitor. However, it is a little hard to see
exactly how that would work or who would appoint the solicitor, let alone who would pay for him or her. There is no reason to believe that an unscrupulous owner is likely to be any less dishonest because there is a witness present.
There is also a wider question about whether interviews are required at all, because there is certainly no statutory or legislative reason for them. The Mobile Homes Act 1983 permits the site owner to approve the purchaser, but that could be done in a number of ways, not necessarily through an interview process; for example, by providing relevant documents. If there is no legal requirement for an interview, it would be burdensome to introduce a formal regulatory process for conducting one. However, that is not to say that we believe it acceptable simply to let unreasonable behaviour be tolerated. We see improving access to justice through the residential property tribunal as the first step towards ending abuses in such cases. My right hon. Friend the Minister of State is only too aware of the problems, and he intends to announce in the new year a package of measures that will curb the excesses of the minority of unscrupulous owners, while not placing undue burdens on the majority who manage their sites effectively and in the best interests of the community.
Martin Horwood: In my remarks I talked not only about sites for permanent homes, but about holiday sites, where often there is also a lot of evidence of abuse. Will my hon. Friend's measures and his right hon. Friend's considerations include those sites as well?
Andrew Stunell: I will certainly take that request away, and we will certainly consider it. It is worth reminding the House that where mobile homes are used for full-time residential purposes, they have a number of tax and regulatory advantages, as compared with what we might call "normal" homes. That is because of their status as residential homes of a particular type. Holiday homes are in a different category, and have all sorts of other regulatory frameworks relating to them. However, I will ensure that that point is taken into consideration.
This has been an important and timely debate. It has certainly highlighted important areas of concern to Members, and it is a tribute to the new Back-Bench debating system that it has come before the House today. It has been helpful to me and my ministerial colleagues and I hope that, when the announcement is made in the spring, hon. Members will feel that their contribution to the debate today has had an influence on the way in which the Government are approaching the problem.
3.50 pm
Annette Brooke: I shall make a brief concluding statement. I should like to thank all the Members who helped to secure the debate, because we had to convince people that we would have enough speakers today. I have been having sleepless nights about it, and I thank everyone for turning up today, especially at this time on this Thursday afternoon. I welcome the cross-party support for the motion; it is absolutely vital and it makes me feel positive that we can move forward. I hope that it will also make the campaigners feel positive. We have talked about our proud and dignified home owners, and about the fact that park homes are homes, not just chattels. That is incredibly important. Those people deserve better; the words "the forgotten lost" summed up what we have been debating this afternoon.
I am all too aware that we need a sustainable, flourishing industry, but it cannot flourish or achieve its full potential for providing this much-needed housing unless we have a way of addressing the many issues that we have been talking about today. Speed and transparency have been referred to, and they are both important, because time is running out. I welcome the first step of establishing the residential property tribunals, but I want to see concurrent planning for the next stage, because it is clear that we need more.
I wavered as I listened to the Minister's response. First, I thought, "Oh, that's good", then I thought, "Oh, that's not so good." It is a pity that we could not have delivered a Christmas present to our park home campaigners today, and that they will have to wait until the new year for the Minister's statement. I trust that they will not have to wait until the spring, and that the statement will be made early in the new year, because we need a response to these long-term problems that have now been raised so many times in the House. I accept that we need to strike the right balance, but that is no excuse for doing nothing. We must have action!
That this House notes that there are approximately 1,800 park home sites in England and Wales; further notes that current legislation permits a minority of park home site owners to cause great distress, damage to property and danger to health of park home residents; welcomes the Government's intention to lay before the House secondary legislation to transfer jurisdiction for park homes to the Residential Property Tribunal Service; but calls on the Government to review the case for establishing a fit and proper person criterion for park home site owners and to bring forward relevant legislation at the earliest opportunity to prevent in particular park home site owners interfering with the sale of a park home without good reason.
Public Accounts Committee
[Relevant documents: The 40th, 44th, 46th, 49th and 51st to 53rd Reports from the Committee of Public Accounts, Session 2008-09, the 1st to 33rd Reports from the Committee, Session 2009-10, and the 1st to 10th Reports from the Committee, Session 2010-11. ]
3.53 pm
Margaret Hodge (Barking) (Lab): I beg to move,
That this House calls on the Government to ensure that all recommendations contained in Reports of the Committee of Public Accounts and accepted by Government Departments are implemented and that the relevant Minister makes a statement to the House on any recommendations accepted but not implemented within a year of their acceptance.
Over the past nine years, this debate has been ably led by my predecessor, the hon. Member for Gainsborough (Mr Leigh), to whom I would like to pay tribute. His tireless contribution to improving public services and delivering value for money has been acknowledged and recognised by hon. Members across the House.
The very first Public Accounts Committee debate was held on 19 December 1960. The then Chair, one Harold Wilson, began his speech by saying
"in my view, the confrontation in this debate is not between Government and Opposition but between the House of Commons, with its traditional responsibility for controlling the public purse on the one hand and the Government on the other."-[ Official Report, 19 December 1960; Vol. 632, c. 894.]
Those are words that should continue to guide us today. The PAC has never been, and should never be, a creature of either the Government or the Opposition Front Bench. We are a creature of Parliament, working together for the benefit of the citizen, holding the Executive to account and constantly seeking improvements in the value that the Executive give for the money that they spend.
As well as reflecting that long and proud tradition, today's debate reflects important changes that we have collectively made to strengthen the role of Parliament. For one thing, I am the first Committee Chair to be elected to the post, as well as being the first woman in the job. It is also the first time that my fellow Committee members have been elected to their positions. I think we would all agree that that additional democratic legitimacy increases both the responsibility and the authority with which we carry out our duties.
The PAC has made changes to our standing orders. As well as allowing us to meet even when the House is not sitting-on Christmas day if need be, as we are often reminded by the hon. Member for South Norfolk (Mr Bacon)-it will make it easier for us to gain access to specialist advice from sources other than the National Audit Office should we need to do so. Furthermore, this is the first occasion on which we have had to bid for our slot from the Backbench Business Committee. That, too, strengthens our accountability to our colleagues.
The motion before us today is different from those of the last 50 years. Rather than simply calling on the House to note our reports, it specifies the changes that we want to see in the way in which the Government respond to our recommendations. That is definitely progress.
The final reason why today's debate is particularly important is the context in which it is taking place. The new Government, for good or ill, have embarked on
major changes. The spending review marks the first wholesale fiscal retrenchment for 20 years, and by some measures the greatest such retrenchment for several generations. Other reforms, in the national health service and the benefits system, are similarly ambitious. The Government want to achieve more for less. They want to achieve value for money, and the people of the country want the same. They want real value for money, real efficiency and real cost-effectiveness, so that the financial cuts have as little detrimental effect as possible on front-line services.
We are still in the very early stages of implementation of the spending review, and the question of whether or not the changes will prove to be value for money is still up for grabs, but there is no doubt that the work of the PAC is hugely important at this time. I firmly believe that if our recommendations are heeded, value for money will improve and the delivery of services will get better. Therefore, I strongly urge the Treasury to give diligent consideration to our reports, and then, after not too much consideration, to ensure that concrete action is taken. I can assure the Treasury that we will monitor implementation much more closely than may have been the case in the past.
I thank all those who help to make the work of our Committee effective. It is no mean feat to question senior civil servants from two different Departments every week-three this week-especially given that our hearings range over every conceivable aspect of public service. As might be expected, that does not happen by itself. I pay tribute to all my hard-working fellow Committee members, who turn up to hearing after hearing impeccably well informed and full of incisive questions. I thank the people who ensure that each hearing runs smoothly: the Clerk and his team of hard-working assistants, and the Comptroller and Auditor General and his staff at the National Audit Office. We are able to perform our role only because of the high quality of work carried out by the Comptroller and Auditor General and his staff.
I want to make three observations about the motion. First, Departments have achieved some notable successes, which we applaud. However-this is my second point-value for money is still too patchy. The same issues arise time and time again. Thirdly, in the past, Governments have too often been too slow to act on some of our recommendations. We will be much less tolerant of that inaction in the future.
The PAC has a reputation for tearing senior civil servants to shreds. Its members have been seen as "glass half empty" rather than "glass half full" people. We have been depicted as the hunters, and the poor accounting officers as beleaguered victims. Actually, the Committee has always tried to give credit where it is due, but the fact is that the amount of waste and poor value for money that it must consider has often been overwhelming. We are redoubling our efforts in this regard, however. It is important that success is celebrated, not just because that is fair, but because it is rare that success in one Department does not produce lessons from which the rest of Government can learn.
Two reports that we have considered in the last six months stand out, both from the Department for Education, which is therefore accorded star pupil status, at least on a provisional basis. The first was the welcome success in raising standards in the academy schools
programme launched by the previous Government for struggling schools working in challenging circumstances in deprived areas. The second was the success of the programme to increase the take-up of science subjects right the way through the education and training systems.
Regrettably however, more often than not we have to consider failures rather than successes. Despite all the years of recommendations from us, the National Audit Office and others, and despite much good will and many good intentions on the part of Ministers and civil servants, we still find lots to concern us. Everyone pays lip service to the need for value for money, but genuine and detailed consideration of value for money across Government is still far too patchy.
One of the first evidence sessions we held was on the last Government's attempts to realise value-for-money savings targets set as part of the last spending review in 2007. I was a member of that Government, and let me say that I believe those attempts were serious and sincere. Nevertheless, I must admit that I was shocked by the results. Halfway through the programme, Departments had reported only just over a third-30%-of the savings required, and only a third of them were genuine, sustainable savings.
Faced with the much more challenging task set by this spending review, what needs to change? I want to highlight two issues. First is the Government's inability to deliver projects to time and within budget. For example, let us consider two of the hearings we have had this week. The Ministry of Defence is renowned for always delivering late and invariably overspending, but yesterday's session, with the evidence we had before us, was truly shocking. Committing to the aircraft carrier project only to delay it eight months later at an extra cost to the taxpayer of at least £1.56 billion is truly shocking. While that did happen on Labour's watch, I am strongly of the view that the permanent secretary at the time should not have allowed the signing of the contract, which so quickly led to such a terrible waste of money. On the Typhoons, taking £1 billion out of the budget when the MOD knew we had a contractual commitment to a third phase of the contract, leading to us having to put in £2.7 billion now to pay for a further 16 aircraft that we do not need, is completely scandalous.
Today's evidence session on the project to widen the M25 left us all flabbergasted. Never mind the nine years it took from concept to contract or the £650 million extra because the contract was signed during the credit crunch, and never mind the £80 million spent on consultants, one of whom went on to employ the senior responsible official; the real point is that we probably should never have undertaken to widen the road in the first place. We should instead have used the hard shoulder, which would have been cheaper and almost as effective.
The second issue I want to highlight is that, time and again, we identified the lack of good and appropriate data, which leads to poor value-for-money decisions and bad choices. Whether through the evaluation of the pathways to work scheme, which measured effectiveness by including all those who asked to go on to incapacity benefit rather than those who were eligible for it, or through the failure of the Department of Health to give primary care trusts the data telling them what works in helping people to stop smoking so that they
stopped wasting money on ineffective programmes, the lack of appropriate data too often results in money being wasted.
I cannot leave this subject without mentioning the Government's recent publication of large amounts of new data on public spending. It is inconceivable that somebody in my position would do anything other than welcome this move towards greater transparency, but I must also sound a word of caution. I must be frank and say that it seems that the problem has never been the amount of data, because an almost infinite amount has always been available; the problem has been how useful the data are, where the gaps are and how well the data have been analysed. To be useful to decision makers in government, as well as to parliamentarians, the National Audit Office and the ordinary citizen, the data must be presented in a way that allows them to be understood and used. I hope that the Minister can give us some comfort that the publication of hundreds of thousands of receipts through the Combined Online Information System-COINS-database is not being done at the expense of the analytical capabilities of Departments.
To date, the Committee has focused on the actions of the previous Administration, which is entirely to be expected because the nature of audit and accountability is to be backward-facing. In time, we will consider the actions of the coalition Government and, as a cross-party Committee that jealously guards its reputation for objectivity, we shall do so impartially. I say clearly to the House that the problems we have identified will not go away simply because of a change of Administration. On the contrary, dealing with them will require concerted action, a willingness to confront age-old ways of doing things and a commitment to improve the skills of civil servants and to get better evidence with which to take decisions.
There seems to be an inbuilt resistance to change in the huge tanker that constitutes the Government machine. Why are projects so often late? Why are we invariably looking at cost overruns, rather than savings? Why can the civil service not build in-house capability to provide effective management and delivery, as well as sound advice? Why is there no culture of proper personal accountability in government at senior levels? Why can Departments not co-operate better and compete less? Why can government not learn from its mistakes?
This is not about political will; it is about institutional inertia and institutional resistance to change. All politicians want better value, enhanced efficiency and improved effectiveness. All politicians, of all allegiances, get blamed when they fail in that regard, yet the ability to succeed in securing those things seems all too often to elude us. That is partly because of the conservative aversion to risk among public sector workers and partly because nobody stays in their job long enough to see things through and be truly accountable. It is also partly because we do not recruit the right people with the right skills and partly because political expediency too often overrides economic efficiency-that is true of all parties.
That brings me to my final observation, which is the one that forms the backbone of today's motion: the degree to which the Government act on the Committee's recommendations. It is inevitable I would say this, but it is my sincere belief that the process of improving value for money in the public sector would be made easier if the Government made more effort to implement our
recommendations. All too often, too little effort has been made. Indeed, all too often our recommendations have just been quietly ignored.
Let us consider the example of the Government use of consultants. The PAC examined that issue in 2002 and 2006, recommending on both occasions that the then Government do more to grow the skills that they need within the civil service, rather than paying out money to costly consultants. What did we find when we looked at the issue again just a few weeks ago? We found that the proportion of spend on IT and project management grew from 50 to 60% between 2006 and 2010. One of the most staggering revelations was that the Department for Transport's spend on consultants came to the equivalent of 70% of its expenditure on in-house staff.
There are plenty of other such examples, which is why we are going to get tougher on following up recommendations. When they are not accepted by Departments, we will want to know why. When they are accepted, we will expect them to be implemented. Hence our call that the Minister responsible should make a statement to the House about any recommendation he or she has accepted but failed to implement within a year.
Today marks the publication of the first two Treasury minutes on hearings that we have had in this Session, another reason why the timing of the debate is so good. We obviously need time to study the detailed content of the documents, but they represent a relatively good start. In the response to our report on the future strategic tanker aircraft, I particularly welcome the commitment to fit these planes with a defensive aid package so that at least they can deliver troops to the war zones, as was originally intended. I also welcome the wider commitment from the MOD to work with the Treasury on renewing its guidance about where and when to use the private finance initiative. I must say, however, that is it dismaying to see how the Department is still determined to justify the decision to use PFI on that project. In my view, that is nothing less than an attempt to defend the indefensible.
On pathways to work, the response we have seen is similarly mixed. It is good to see that the Department is seeking to put proper incentives into the new Work programme so that contractors will not get paid unless they deliver. I welcome the commitment to allocate cases to private companies on a random basis in the future so that they cannot cherry-pick the easiest ones. Moreover, the results of Professor Harrington's review of the new work capability assessment shows that it is more than just our Committee that has concerns about it, and I look forward to the Department's response. I dislike the assumption that outsourcing these duties to the private sector is definitely the value-for-money thing to do. After all, our report found that Jobcentre Plus, almost without exception, did better than private contractors, even though they were given a smaller caseload in easier parts of the country.
I want to draw the House's attention to one important aspect of our work over the coming months. Our work will be dominated by the implementation of the spending review. We have already held sessions with experts outside Government, and we have taken evidence from senior civil servants to understand the new framework of accountability and the role and purpose of the business plans and we will develop our own framework for
ensuring proper value for money in the cuts and changes Departments make. We will rigorously hold the Government to account, but in doing so we want to assure the House that our purpose is one we share across the Benches. We want to help eke out best value for every penny spent on behalf of the citizens of the country and we want to contribute to the improvement of public services in coming years. All we ask is for serious engagement from Ministers, accounting officers and their staff across government and for the Treasury's assistance in making that happen.
Mr Deputy Speaker (Mr Lindsay Hoyle): Order. Eight people are trying to catch my eye and I shall be calling the Front-Bench speakers at about half-past 5, if people can bear that in mind.
4.12 pm
Mr Richard Bacon (South Norfolk) (Con): It is a great pleasure to follow the right hon. Member for Barking (Margaret Hodge), the new elected Chair of our Committee. I congratulate her on the way in which she has fulfilled and is fulfilling her office. It is a great pleasure to serve under her leadership. Her predecessor was something of a stern headmaster, and although her style is slightly less stentorian-I looked up Stentor, and he was a Greek herald with a booming voice and it is hard to think of anyone in this House with a more booming voice than my hon. Friend the Member for Gainsborough (Mr Leigh)-she has already shown that she is no soft touch. She has shown her teeth on a number of occasions and she chairs the Committee with great aplomb. You might expect me to say that, Mr Deputy Speaker, but ask yourself which Conservative is likely to be able to resist serving under a strong woman whose first name is Margaret.
I want to say how much of a pleasure it is to have so much new blood on the Committee. It was a bit of a shock for me and the hon. Member for Great Grimsby (Austin Mitchell) to realise that we were the only members of the Committee who had served in the last Parliament and there is a great cast of new active keen members who are working very hard and contributing their new and varied experience.
Let me start by endorsing something that the Chair of the Committee just said. The problems will not go away because there has been a change in Administration. I have been looking at the problems that Government face through the lens of the Public Accounts Committee for the past nine years-I have been wrestling with these problems- and it staggers me that the problems are so generic and are repeated so much. In my relatively brief speech, I want to focus on a number of different reports and then on one issue in detail.
I shall look first at some reports that show structural improvements in the way that we are working with the National Audit Office and secondly at some that show welcome improvement in a particular area-financial management. I shall look thirdly at some reports that show the areas where there are still serious issues, one of which would be almost hilariously bad if it were not so serious because it involves public money, and fourthly at a couple of reports that are particularly important to how we might work in future. Finally, I shall look at one report in detail.
The first three reports I want to discuss signal something quite important. They are the 52nd report of 2008-09 on reducing health care associated infection and the 26th and 19th reports of 2009-10 on improving stroke care and improving dementia services respectively. The 52nd report was the third time since 2000 that the Committee looked at hospital-acquired infections and there has clearly been significant change in that time. The Committee considered it first in 2000 and again in 2004, when there had quite shockingly been a dramatic decline. The NAO published its report in 2004 and we took evidence on it later, and that catapulted hospital-acquired infection up the agenda. Everyone will remember what a strong issue it became during the 2005 general election and it has been an important one ever since. It continues to be important for hospitals, but it will remain so only if they know that they are under scrutiny. That is why I was so pleased that we took evidence on it again in 2009. The report shows that there has been significant progress, particularly regarding the two infections that are the subject of national targets-MRSA and clostridium difficile-but that there have not been those measurable reductions in other avoidable infections that were not targeted. Clearly, progress is made in areas we scrutinise, but more needs to be done.
By returning briefly to an issue, as we did in our 26th report on stroke, we were able to demonstrate that there had been considerable improvement. Our report stated:
"We welcome the demonstrable improvements in stroke care which the Department of Health...has achieved since our first report",
but noted that there are still further steps to take. I firmly believe that the Committee should, as a matter of routine, return to issues much more regularly. We also did that with our interim report on dementia, which showed that although the then Government said that dementia would be a national priority, they did not walk their talk in the way that they did with cancer and coronary heart disease.
The financial management reports that caught my eye are the 46th report of 2008-09 on financial management in the Home Office and the third report of 2009-10 on financial management in the Foreign and Commonwealth Office. Let us remember that almost the first act of Sir David Normington on becoming the permanent secretary at the Home Office a few years ago was to sign an unaudited and unauditable set of accounts merely so that they could be presented to Parliament. As we said at the time, that was a very unenviable position to be in and it certainly was not his fault. Our report shows that there has been considerable improvement in financial management at the Home Office and that it needs to sustain that momentum by incorporating strong financial management as standard across its business. We have identified areas in which further progress is needed, but we should stop to note the considerable improvement since the chaos of a few years ago.
Similarly, with the FCO, it was a delight to see the permanent secretary turn up with two chartered accountants and to be able to say in our report:
"The Committee is pleased to note that the Department has acted upon previous recommendations".
That is relevant to what the Chair of the Committee said a moment ago, and I wish that more Departments would do the same. In contrast, however, our 25th report of 2009-10 on the FCO's estate management showed that it has a lot further to go in that area. We commented that its
"new Estates Director currently does not have the information he needs to do his job."
The lack of correct information in Government Departments is a theme that we constantly come across and the NAO has rightly focused a suite of its work specifically on estate management because the Government are such a big property owner. There is still a great deal more to do in that area to improve the quality of management within Government. It is not common to find qualified chartered surveyors and qualified chartered quantity surveyors in charge of a Department's estates in the way that we would expect, and are now getting, with financial managers in relation to financial management in Departments. That is something that the Government should focus on.
I turn to less successful areas, notably the private finance initiative project to deliver the multi-role tanker-the future strategic tanker aircraft-which should never have been set up in that form. Paragraph 1 of our report states:
"The use of PFI to deliver a vital military capability like FSTA was inappropriate."
It is rather depressing that after years of identifying projects where the use of PFI was inappropriate, and saying that certain types of project should never be subject to PFI-for example, the Libra project to supply computer systems for magistrates courts-it is still being used in situations in which it is wholly unsuitable. I was looking at the questions put by our Edinburgh colleague, the right hon. Member for Stirling (Mrs McGuire). At question 187, she asked the permanent secretary whether, notwithstanding the pressure he was under, there was any justification for the fact that when the Ministry of Defence
"went into a project, that they did not know what it looked like, would sound like, would turn out like, had no indication of the costs of the subcontractors."
The permanent secretary replied:
"I am certainly not arguing in favour of the approach that was taken...All I am trying to do is to offer a little bit of mitigation for that failure by reference to the operating conditions at the time."
I think what Sir Bill probably meant by "operating conditions at the time" was the previous Prime Minister, who when he was Chancellor of the Exchequer said that we would do it under PFI, or it would not happen. We need to be slightly more honest with ourselves about what is and is not appropriate, and to have more open debate about it. The project was scandalously managed and cost much more than it should. It has taken much longer than it should, and it was inappropriate in the first place.
The Chair referred to the aircraft carrier project, which is similar. We looked at that only this week with the new permanent secretary at the Ministry of Defence, as we did at the beginning of the year in our 2009 major projects report. What staggers me is that only seven months after signing the contract, the MOD took a decision that would increase the costs, not because of project management failure or management ineptitude-it was purely a decision to delay. Decisions were taken
that increased the cost by £908 million-or so they thought when we reported on the matter in our 23rd report, in the 2009-10 Session, HC 338. It turns out that the figure was not £908 million; it was £650 million more than that. It was £1.5 billion extra, on top of the original cost, purely because of the decision to delay. I agree completely with our Chair. The permanent secretary at the time should have said, "Affordability is such an important component that if you want me to do it, you should require me to do it by issuing a direction." I am sorry that was not done.
Our report on the National Offender Management Service highlighted a significant issue relating to the management of the civil service and the way that civil servants are placed on projects. Our recommendation 5 notes that
"the Senior Responsible Owner did not have the right experience for the role."
Who put that person in that job, when she did not have right project management experience? If we set people up to fail, we cannot be surprised if that is exactly what happens.
I should like to refer to several other reports, but I shall concentrate on the report on the Rural Payments Agency, which illustrates some deep issues in the relationship between Ministers and civil servants that are as important for the future as they were in the past. I shall remind the House of the facts in the RPA debacle. It involved the single payment system. Various methods were available, but the Government chose to implement the most complicated system on offer with the shortest available timetable. That process was certain to increase both the total number of claimants and the total land area claimed, while the agency had not properly completed the essential digital mapping exercise-refusing to recognise that it was flawed-and was using a computer system that had not been fully tested, and which was anyway not up to the job. It used an approach that split the work into separate tasks performed in different parts of the country, which made it impossible to track the progress of individual claims. It cancelled the parts of the system that would have provided management with information about what was going on and scrapped the contingency plan that would have at least enabled the agency to make part-payments. Furthermore, the RPA sacked its most experienced staff and replaced them with unskilled temporary agency workers who were required to work unsocial hours on the minimum wage. One is tempted to ask, what could possibly have gone wrong? But the fact is that, as we all know, it did go wrong.
To say that the single payment scheme was convoluted was an understatement. Indeed, Dr James Jones of the Royal Agricultural College in Cirencester told our sister Committee, the Environment, Food and Rural Affairs Committee:
"This has been highly confusing conceptually even at the highest levels of those responsible for creating the scheme rules at EU, Member State and regional level. He said that most of the difficulties experienced in implementing the Single Payment Scheme stem back to internal contradictions that arise because
(a) entitlement is based on past occupation of specific parcels of agricultural land but is then not linked to that land;
(b) payment is related to occupation of 'agricultural land' but does not require agricultural production; and
(c) most of the cross-compliance and other conditions relate to production but the Single Payment was not a production-based subsidy."
And that was just for starters. One still had to decide which of the three possible years one would start the scheme in, whether to incorporate funding for the dairy sector into the scheme, and the crucial question of the method that would be used to calculate payments. That offered possibilities of quite byzantine complexity.
The main choice was whether to use as a reference point the payments that individual farmers had received in the past under the old common agricultural policy schemes-known as the historic approach-or whether to average out all payments among farmers in a state or region, which was known as the flat-rate approach. Member states could also apply a mixed model under which they were allowed to apply different calculations in different parts of their territory. It was this that enabled the Administrations in Scotland, Wales and Northern Ireland to use a different system from that used in England.
But there was a further twist within the mixed model. Even within one region of its territory, such as England, a member state could calculate single payments using a part-historic and part-flat rate approach. Under such a "hybrid" system, payments would be calculated partially by taking the available money within a region and splitting it among farmers on the basis of a flat-rate entitlement, and partially by taking account of the old subsidy that a farmer had received historically under the common agricultural policy schemes.
And that was not all. Member states could choose a hybrid scheme and leave it at that, which was known as a static hybrid, but if they wished, member states could choose a hybrid scheme and then vary it as time went on, so that over the years the proportion based on the historic subsidy payment declined and the proportion based on the flat rate increased. This was known as a dynamic hybrid.
The permanent secretary of the Department for Environment, Food and Rural Affairs, Dame Helen Ghosh, made it very clear that this was not the Schleswig-Holstein question. Members may recall that that was the question of which Lord Palmerston, a former Prime Minister, said that there were only three people who ever understood it: one of them died, one of them went mad and one of them forgot what the question was. But it was undoubtedly byzantine in its complexity. It prompts the question, what did DEFRA and the Rural Payments Agency actually think about all this? Well, funnily enough, it was very clear what they thought about it.
According to evidence from George Dunn, the chief executive of the Tenant Farmers Association, which he gave to the EFRA Committee, Bill Duncan, who was head of the central scheme management unit at the Rural Payments Agency, said that if the RPA were to choose something other than a simple historic or a simple regional average system it would be a "nightmare" to administer. That is what the senior Rural Payments Agency official thought. David Hunter, who was the director of European Union and international policy in DEFRA, said it would be "madness." That is what the senior DEFRA official thought.
Yet Dame Helen Ghosh, the permanent secretary of DEFRA, giving evidence to our Committee, in answer to a question from David Curry, then a Member of the House and a member of the PAC, and of course a former Agriculture Minister, told our Committee:
"Ministers were being told it was possible when it was not in fact possible."
The full quote is as follows, and I think it is quite illuminating:
"The capacity of the organisation to advise ministers-and I think we put them right-and indeed the connection between the policy and operations in the Department"-
I think she actually meant the lack of a proper connection between the policy and the operations-
"meant that ministers were being told it was possible when it was not in fact possible."
"The point I am making is that had ministers at the time been told it was effectively impossible-and I think it is very difficult to discuss counter-factuals-they may have made a different decision, had they known the difficulty".
In other words, the senior official in the RPA with specific responsibility for the management of the scheme, Bill Duncan, thought the route that they were choosing would be a "nightmare" to administer. The senior DEFRA official with direct management responsibility for the oversight of the scheme, David Hunter, thought the route that they were choosing would be madness, but Ministers were being told that it was quite deliverable. As Dame Helen said,
"ministers were being told that it was possible when it was not in fact possible."
Why? It is the job of the neutral civil service to ensure that Ministers are in full possession of all relevant facts before making a decision, so we could blame the civil service for that debacle.
On the other hand, and in actuality, the Minister at the time was absolutely determined to go down a dynamic hybrid route come what may, so we could blame the Minister, and perhaps we should. The Minister should have been told, however, "It cannot be done." He should also have been told, "If you want me to do this, Minister, you are going to have to issue a direction to me to do it, because it cannot be done in a way that is economic, effective and efficient." Why did they do it? In the end, they did it because Ministers told them to, and they were not prepared to stand up to Ministers in the interest of taxpayers, as they should have.
What is the lesson? It is quite rightly true that civil servants respond to what they believe to be a Minister's priorities, but it is also essential for Ministers to be aware of the consequences of their decisions, and for civil servants to stand up to them and to make sure that they are aware of those consequences. I should like to think that the best civil servants do that, but I fear that it does not happen now as much as it did a generation ago. I am not making a party political point, however, because that was a criticism in the 1980s under the Thatcher Governments and subsequently; it has been a criticism of the previous Administration; and, for all I know, it will become a criticism of the current Administration. It is absolutely essential, however, for Ministers and their advisers to understand the consequences of what they do and the impact of those decisions on large-scale-often world-scale-organisations.
The right hon. Member for Greenwich and Woolwich (Mr Raynsford), in evidence to the Public Administration Committee, made the point very clearly, stating that
"there has to be an understanding on the part of the politician about the impact of political decisions on the ability to manage organisations. I am critical of a failing of some of the leaders of
this Government and previous governments who have believed that essentially political decisions could be taken without a proper appraisal of the impact on the running of a department."
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Mrs Anne McGuire (Stirling) (Lab): I, too, pay tribute to my right hon. Friend the Member for Barking (Margaret Hodge). She is the first woman-indeed, the first elected-Chair of the Public Accounts Committee, and that is a unique combination. She is also one of the bravest politicians in the House, and anybody who has seen the magnificent election battle that she undertook in her constituency against the British National party may well understand why permanent secretaries might be worried about appearing before her at the Committee.
It is also a pleasure to follow the hon. Member for South Norfolk (Mr Bacon), but he needs to remind me to give him a lecture on Scottish geography. He always tells me that he knows a bit about Scotland, but I must tell him that, although Edinburgh and Stirling have castles, Stirling has by far the best, and it, as opposed to Edinburgh, has me as its MP. I forgive him, however, because I admire the skill and tenacity that he brings to the Committee, and he is a role model for us all.
I am not a new Member, but as someone who has been here since 1957- [ Interruption. ] It sometimes feels like that. As someone who has been here since 1997, I am asked by some colleagues, "Why do you want to go on to the PAC?" The Committee has an image deficit, and, although in various analyses of our work we are called the "queen of Committees", we are still a bit of a mystery to the majority of our colleagues. Indeed, today's attendance shows that we will remain a mystery for another few months at least.
On the PAC, one walks in the footsteps of history. I learned more about William Ewart Gladstone in my first few weeks on the Committee than I ever did taking an honours degree in history at Glasgow university, and all sorts of historical anecdotes add to, if not the glamour, then the attraction of being a member. My right hon. Friend the Member for Barking mentioned Harold Wilson. One of the anecdotes that delights me most was the fact that, when he was shadow Chancellor, he decided that he also wanted to be Chair-he would have been a Chairman in those days, of course-of the Public Accounts Committee. In some ways, that was breaking new ground. Such a decision tuned in with Harold Wilson's desire to consolidate his portfolio, so that he could ensure he was in control of all the strategic decisions that had to be made within the Labour party at that time. Ben Pimlott, his biographer, states that such a decision also had a practical benefit because, at a time when accommodation at the Palace of Westminster was not available for senior Opposition Front Benchers, the PAC Chairman was provided with his own room-a citadel of great importance in Westminster's psychological battleground. My right hon. Friend has maintained the image of that citadel in the Upper Committee corridor.
Of course, the Committee does not consider the formulation or the merits of policy; it focuses very much on value-for-money criteria that are based on economy, efficiency and effectiveness, as the hon. Member for South Norfolk mentioned. Those are the three by-words that should determine how we judge the reports that come before us. In many respects, such an approach is almost counter-intuitive for politicians because we spend
most of our time discussing and developing policy. However, as at least one previous Labour Prime Minister has commented, it is no use throwing money at something unless it guarantees the delivery of the objectives. I fully understood that cry of frustration in relation to one report we considered in the Committee. I shall come on to that in a moment.
We have gelled reasonably well as a Committee. There is a mixture of people who have longevity in the House, people who have longevity in membership of the Committee and people who have more recently joined this place. We bring to the Committee a range of external work experience, which allows us to question things in a way rooted in some sort of credibility in managing finances. As a Committee, we have a breadth of experience that allows us to challenge even the most eloquent of the accounting officers who appear before us. Although the subject is sometimes considered to be rather dry, we have developed a passion for our discussions with witnesses. Certainly, anyone present at our sittings this week would have noted that both energy and passion are in abundance in Room 15-anyone who follows our deliberations will have that confirmed.
In my brief contribution, I want to highlight three things that I have drawn from my short experience as a Committee member. The first relates to the lessons that we can learn from discussions on the reports and the Committee's conclusions. Some of these issues have been the subject of previous debates-indeed, I think the hon. Member for South Norfolk has probably raised them-but they do need repeating. There is still a concern, which I hope is shared by most of my colleagues on the Committee, that the recruitment and training of civil servants has not kept pace with some of the issues, particularly that of financial responsibility. There has been an increase in training and personal development, which is welcome, but it astonished me to find out that, for example, it was only a couple of years ago when a financially qualified senior civil servant was recruited by the Ministry of Defence.
Sir Gus O'Donnell stated at a recent hearing that the British civil service has always prided itself on recruiting,
"the brightest and the best"
and on making people skilled generalists. I am not suggesting in any way that we stop recruiting those exceptionally bright people, but we also need to recognise that, in delivering projects efficiently, effectively and economically, they need to be managed properly. Will the Minister address that issue in his comments at the end of the debate and tell us what Departments are doing to enhance the training opportunities for those who undertake project management? It is not fair to the taxpayer or, indeed, to the individual civil servant for us to assume that people can manage complex and expensive projects without having the appropriate skills from the very day on which they assume responsibility for that work. With complex financial projects, learning on the job is simply not good enough.
Another point that has emerged from our discussions is how lessons are disseminated-or not, whichever is the case-across Government Departments. How does this happen currently? I get the feeling that permanent secretaries talk about it when they meet, and I understand that they meet on a regular basis. But is it a structured discussion? Is it then cascaded down to other colleagues in their Departments? Is it a learning experience only
for them and their senior officials, or is it used as a corporate opportunity to change the way in which the service as a whole develops? I would like to get a feel for how we spread the word of good practice across all Departments.
Before I leave this part of my speech, I want to comment on one Department where people have tended to get it right-not always, but probably in the majority of cases-and that is the Department for Work and Pensions. Like my right hon. Friend the Member for Barking, I have a special interest in that Department having been a Minister there for more than three years. I was delighted to hear from the retiring permanent secretary about the implementation of the new ESA IT platforms. I remember this particularly because as a Minister, when we had discussions on that project in undertaking the development work that led to the Welfare Reform Act 2007, we were told that, yes, it was "stretching", but those officials immediately started to look at ways in which they could deliver it.
I know that there are good officials in all Whitehall Departments, but the one distinguishing feature of the DWP and its senior management team is that they tend to "grow" their own people. Officials at the DWP have come through the ranks. They understand the business, and they have had to deal with real people and solve real problems throughout their civil service career. I was pleased to note that the permanent secretary who was retiring indicated that the new perm sec, Terry Moran, follows in that tradition as someone who joined the Department as a 16-year-old in Blackpool, as I remember. That is an indication of how Departments can get it right. The DWP is not perfect, by any manner of means, but on average it tends to be a bit better in delivering some of its projects.
I want briefly to mention two specific reports and Committee sessions: first, on the academies programme, which my right hon. Friend the Member for Barking also mentioned; and, secondly, on tackling health inequalities. On the first, it was a joy to be present at that discussion. Unlike the current proposals, about which I have grave misgivings on a political level, this programme was intended to improve the performance of so-called failing schools still within the state system and directly managed by the Department of Education. The NAO report clearly indicates that most academies are achieving increased academic success and that Ofsted reports are, in the main, good. There are, of course, imperfections-the report did not say that things were perfect-but in delivering effectively, economically and efficiently, the Department is doing reasonably well.
It was no surprise to discover that one of the reasons that happened was that one person, in the shape of Lord Adonis, was there at the inception of the idea and through to the delivery of the project. Consistent and persistent political overview obviously helped. In the same vein, we need to look to consistent and persistent senior responsible officials to deliver some of these complicated reports.
Dr John Pugh (Southport) (LD): The right hon. Lady may be aware that a previous NAO report seen by the previous PAC established that Excellence in Cities, which was a predecessor programme, achieved equally good results at far less cost.
Mrs McGuire: I am speaking purely of the report that was in front of us, but I accept that there may have been other approaches. I was using the point as an illustration, not a comparison.
Mr Bacon: I fully accept the right hon. Lady's point, whether it was meant as an illustration or a comparison. Another interesting facet of the academies programme, which Lord Adonis pointed out to the Committee in a seminar, was that after a relatively short period it was he, as the Minister, who held the collective memory in the Department. All the civil servants who advised him on the programme had been there for less time than him. What does that tell us about how the civil service manages its people?
Mrs McGuire: The hon. Gentleman highlights a recurring concern among Committee members, which is that the tendency to move civil servants around the system so often means that the collective memory is not built up. That was illustrated beautifully in yesterday's discussions with the people from the MOD. Even in a programme of intermediate length, there had been God knows how many senior responsible officers. That leaves no opportunity to build up the collective memory.
I will take your comments to heart, Mr Deputy Speaker, and will not speak for too much time. However, I wish to highlight one other report that I found outrageous, which was on health inequalities and life expectancy. As the Committee said, the issue of health inequalities is not new. A J Cronin wrote about it in his stories about Dr Finlay and Dr Cameron. We all know about these issues. Although it was officially identified in 1997, our progress in dealing with this problem, which has been staring us in the face, is depressing. There are issues with the approach of general practitioners to those who suffer health disadvantages.
I hope that the new Government will look at the report carefully, because as they reform and change the NHS, they must consider whether they can deal with the inequalities in health across the country, or whether they will reinforce them. For the record, that is one report on which I received positive feedback from people outside this House who are in public health. A colleague in the Scottish Parliament said that it was one of the best reports he had read on the issue.
I will conclude by looking briefly to the future. Parliamentary scrutiny of the taxpayer's pound will be more challenging. As more services are devolved to commissioning GP practices and thousands of schools, the scale of the audit trail will be breathtaking and value for money analyses will be even more complex. I hope that the Minister gives us an understanding of who will be responsible for the spend. Can we expect it to still be the departmental accounting officer, when he or she will have no control once the money leaves the Department? Will we invite school governors and managers, partners in general practices, and chief executives of voluntary organisations to appear before us? This is a question for us all: who carries the can when public money is involved and who pays the price if it all goes wrong? It is bad enough at the moment, when few heads appear to roll even when things go spectacularly wrong. What will it be like when thousands of people are ostensibly responsible for signing taxpayers' cheques? A taxpayer's pound is a taxpayer's pound, whoever spends
it. The PAC, along with the NAO and the Government, will have to consider quickly how we will manage our work to ensure that there is still public accountability and that value for money is still identified.
Mr Deputy Speaker: Order. Quite a few Members are trying to catch my eye and I hope to call them all. If it looks like I will not be able to do so, I will have to put a time limit on speeches, but I do not want to do that.
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Dr John Pugh (Southport) (LD): I am a former member of the PAC, and I found it an extraordinarily useful part of my parliamentary life and actually quite a lot of fun. I noted the remark from its Chair that its members are invariably impeccably well prepared, and I must admit that the Committee has therefore improved somewhat. I can remember times when the odd member might have simply glanced hurriedly at an NAO report just as they walked through the door. I am sure that does not happen today and that things are significantly better.
The PAC specialises primarily in post hoc analysis. The hon. Member for Gainsborough (Mr Leigh), who is in his place, and I wrote to the Treasury about that shortly after the end of the last Parliament, suggesting that it had not learned enough from the PAC and had not taken on board some of the messages that the Committee sent it. We said that there was scope for improving parliamentary scrutiny. Lo and behold, the Treasury has recently asked us to work on improving scrutiny by the House. Some people have greatness thrust upon them, and that is certainly the case for us in our modest role in the order of things.
What the PAC offers is a post hoc diagnosis, a forensic analysis of how policy is implemented by civil servants according to what their political masters dictate. They are invited in for a Socratic discussion about how things have gone, and the idea is that the Treasury then responds by trying to learn lessons and ultimately spread good practice. That is the subject of the motion.
To be fair, the hon. Member for Gainsborough has claimed in the past that the Treasury, or somebody at any rate, has implemented most of the lessons that the PAC has endeavoured to teach it. However, the PAC should have bigger ambitions. Its role in the House could be more than just to provide a commentary, and it could be a more functional part of the legislature, as is its parallel body in the USA, and as the hon. Gentleman and myself desire.
At the moment, after whatever botch-up we happen to be talking about in the Ministry of Defence or wherever, hon. Members, usually the hon. Member for South Norfolk (Mr Bacon), ask rigorously what tests were applied at the time. Indeed, that was the burden of the hon. Gentleman's speech today. He asks what health checks were made, what the gateway review process was and whether the costings were robust enough.
The hon. Gentleman was honest enough to say today that we might be asking all those questions all over again at the end of this Parliament, because a whole series of other programmes are being rolled out, such as academies, which have been mentioned, welfare reform,
NHS reorganisation, which is a heck of a big programme, and court closures. PAC members will be aware that, in the past, it discussed the effect of court availability on such matters as cracked trials, people failing to show up and court costs. There is also the green energy programme announced today. They are all huge Government programmes.
Each of those programmes should, and in fact does, involve some type of internal gateway review and Treasury assessment. There are jolly clever people in the Treasury who make it their business to examine them and see where they are heading. Unlike in local government, however, in which such processes are overt and public papers are circulated, the information never emerges in public. It is not released until long after the event, when the PAC might get its hands on it. It is held within the Government's walls. In one sense that is bizarre, because Parliament is asked to authorise all the schemes, and in a way we vote for them blind, without adequate financial assurance.
What Parliament does in that regard is not sufficient for the task. We vote on money resolutions, but we do not talk about them. We have the farce of estimates day, and on the occasions when supplementary estimates go before Select Committees, those Committees by and large talk about something else. Occasionally a Committee will probe the finances of a particular project, and the Health Committee has done some trailblazing work in examining the finances of current Government policy. Occasionally there is a political knockabout either in Westminster Hall or on the Floor of the House, but we do not have in place adequate stress testing of policy. The PAC could contribute to that, but that testing is weak in this legislature.
The PAC is ideally set up for such a role, because it is not a policy Committee. It can ensure that costings stand up to critique. The proactive role that I hope for would keep the Government on their mettle-fewer foolish schemes would make progress-and keep the PAC on its mettle. The Committee has the advantage at the moment of always acting in hindsight in that it never gives its judgment up front so that people can see whether it turns out to be correct.
Going down the road I suggest would encourage transparency, avoid Parliament voting in ignorance and bring us into line with other countries. What is more, it would be a significant enhancement both of the PAC's role and of parliamentary scrutiny, and a significant improvement in government. The NHS IT programme would never have run if the PAC had such a simple and clear-cut role. It would empower Parliament, improve its efficiency, and make the Government more efficient and competent. I believe that people not only in the Treasury, but in the Cabinet Office, have efficiency and competency as a determined ambition now. The country hankers for boring, effective, evidence-led government. We have had enough of being flash, we are fed up with revolutions in this service and that, and we do not really require a great deal of liberation. It would also be significant improvement if Ministers could stop using the word "step change" every time they do anything.
Good, efficient, boring government would be a significant development, and the PAC has a significant role to play if the Government allow it to do so.
4.56 pm
Dr Stella Creasy (Walthamstow) (Lab/Co-op): I am delighted to contribute to this debate as a new Member of the House and a new member of the PAC. We have seen the breadth of experience within the Committee and some formidable Members have addressed the House already. It is incredibly daunting to join them. I pay tribute to the Chair and her work in making newer members of the Committee feel very welcome, although we must do our homework.
I stood for election to this important Committee because Parliament has three key roles. First, our role is representation-we speak on behalf of the people who voted us in. I am conscious that when I speak, I do so not as myself but as the representative for Walthamstow. Secondly, we are here to make laws as the legislature. We all came into politics not just to change governance, but to change lives, which we do through passing laws. Finally and crucially, our third role is oversight and scrutiny. As my right hon. Friend the Member for Stirling (Mrs McGuire) alluded to, sometimes that is not seen as glamorous as the other two roles I mentioned, but I disagree, because oversight and scrutiny is crucial. The best oversight and scrutiny is about whether politicians can achieve the things that they say they want, and why they cannot do so if that is the case, and considering other ways of doing things. Oversight and scrutiny speak to a recognition that Governments should not just start projects or policies-the public expect them to be able to finish them too. Essentially, implementation is as important as ideology in politics.
Clearly, good governance requires all three of those functions to be enacted effectively, and each depends on the others for success. Without an effective system of scrutiny and oversight, wise words and good intentions will falter on the wheel of day-to-day delivery and the messy complexity of how change occurs.
I therefore ask hon. Members to support the motion, because it relates to the PAC's performance of those functions within the House. The PAC is very different from Select Committees that look at the desirability of policy because it looks at policy effectiveness and implementation. That is why I take great pleasure in being a member of the Select Committee that Baron Hennessy of Nympsfield described as
"the queen of select committees".
I take pleasure in quoting him not least because I represent him, which is a nice way of referring back to the first function of Parliament that I mentioned. The Westminster model is seen across the world as the gold standard of accountability on questions of effectiveness and value for money-other countries have subsequently followed that proud historical tradition.
I stood for election to the Committee not least because of my experience in local government and the value of scrutiny in the delivery of policy. I have been on the Committee only since November, but I have thoroughly enjoyed the experience so far, because we take seriously our job of safeguarding public money. I understand now why Baron Hennessey argues that the PAC exerts a cleansing effect on all Departments, because each week we thoroughly challenge witnesses-some more than others, perhaps-on the basis of the evidence before us. We take seriously the lesson that John F. Kennedy once
taught: from his experience in government, when things are non-controversial and beautifully co-ordinated, there is not much going on.
The wide range of topics I have covered in my short time on the Committee bears that out-from our work on the community care grant to the major Ministry of Defence projects and the employment of consultants. I have learned more about hard shoulders on motorways and the nature of the M25 than I ever thought I wanted to know. However, all our work reflects the Committee's crucial role in holding Governments to account over how they deliver on their promises to the public. The hon. Member for South Norfolk (Mr Bacon) expressed that honourably in his detailed examination of farming policy. That, too, reflects the breadth of our work.
Our Committee is an exercise not in teaching new or seasoned MPs about the topics of the day, but in understanding the concept of delivery and how to make it work. It is also about the crucial and honourable role that civil servants play in government. My right hon. Friend the Member for Stirling admirably set out some of the challenges in how the civil service and the Government work together. However, the work does not stop with meetings, and that is what the motion reflects and why I want to pay tribute to the Clerks and the National Audit Office for the work they do to support our Committee. I have found their reports incredibly useful. Our role is about the process of change and how it is followed through. That is the cleansing work in action.
The Committee's meetings and follow-up work form a circle of scrutiny that is critical to how Governments act, which is why it is vital that our work does not disappear into a dusty report or an uncomfortable meeting in Committee Room 15-however cold or hot it may be. The motion is about ensuring that the cycle of scrutiny and oversight matches our legislative and representative functions in Parliament. Ministers need to be held accountable, if there are problems with their Departments in following up on the Committee's recommendations, and it is right that we have a motion about the power to bring them to the House if necessary, so that all Members can be involved in the discussion and understand what is happening on the ground with those policies.
There are examples of where these problems of accountability lie. According to recent research, about 60% of the Committee's recommendations have been accepted and about 30% partially accepted. That is comparable with other systems. However, there is an issue for us to consider, because it is not any one Department that has been challenging in terms of following up those recommendations. We need to reconsider our ability to follow up those issues and tell Departments and Ministers what is happening. The Committee Chair set out admirably some of the challenges we face over the patchy delivery of value for money and the pace of change in implementing recommendations.
When recommendations are followed up, there can be great benefits for the Government and ultimately the public in the delivery of policy. In particular, I am impressed by the work done on obesity. The Committee played a role in bringing together a holistic view of how the Government were looking at the cost to the taxpayer
of not addressing obesity. That work is key. Also, the Committee's rigorous and persistent scrutiny in relation to the Criminal Injuries Compensation Authority has finally enabled change to happen.
The hon. Member for South Norfolk also alluded to the work on health and stroke care. That is another example of where the process of overview and scrutiny has made a real difference to the quality of service that people in this country receive. We also had a debate this week about the major MOD projects. Clearly, that is a controversial subject, and yesterday, we took some very difficult testimony. Notwithstanding the examples that we looked at yesterday, this rigorous scrutiny of how those projects are delivered, and the fact that the NAO, together with our Committee, has continued to apply pressure, is testament to the work that we do. Some 13 out of the 15 projects we are looking at are now being delivered better. That is a result of our work with the Government. That is why I think that our Committee reflects what is best called constructive criticism made real. However, we need more powers to ensure that that happens.
From my few months on the Committee, I can vouch for the fact that we have been equally helpful to both the last and the current Government. That is why the Government should not fear the motion, but welcome it, especially given some of the major changes to delivery that they are talking about making, particularly in terms of localism. My right hon. Friend the Member for Stirling admirably set out some of the challenges involved in having new actors delivering things through the public purse and perhaps even being responsible for commissioning services. It is all the more important that Parliament should have a clear role in asking, on behalf of the public, whether we are getting value for money, and whether we are able to deliver the things that we talk about in this House and that we as representatives, making laws, want to see happen.
It is also important to note what studies of other public accounts committees have looked at. The hon. Member for Southport (Dr Pugh) gave some examples of that. For instance, 75% of public accounts committees that were surveyed by the World Bank agreed that it was crucial to their effectiveness to have the power to follow up reports and to check the implementation of their recommendations. The World Bank also calls for powers for public accounts committees across the world to be strengthened. It is therefore important for us to recognise-as perhaps representing, as it were, the gold standard of public accounts committees-that we could lead the way on that, through today's motion and the proposals that have been put forward. That is why the House should support the proposals, because this debate is not just about the positive impact of overview and scrutiny of public policy; it is also about ensuring that the work that we do benefits the people of this country. Indeed, I am also incredibly mindful of that representative aspect to this debate. We have a responsibility to the House and to the people whom we represent.
I do not intend to speak for too long, as I know that many other new Members also want to contribute. I hope that I can persuade the Government to accept the motion. In the words of Thomas Jefferson:
"Whenever the people are well informed, they can be trusted with their own government; that whenever things get so far wrong as to attract their notice, they may be relied on to set them to rights."
I hope that the House will see the Public Accounts Committee as part of that process of setting things to rights, and that the power that we are seeking today becomes part of ensuring that policy is delivered in the way that we want it to be delivered. If that alone is not encouragement enough, I would also ask the Minister to reflect on the words of an anonymous source who said:
"Admit your errors before someone else exaggerates them."
I hope that the Minister will see the reports that we produce as a fair reflection of the work of Government and the challenges ahead, and that, in the spirit of constructive criticism, he will support the motion today.
5.7 pm
Stephen Barclay (North East Cambridgeshire) (Con): I am conscious that time is short and a number of colleagues wish to speak, so I shall abridge my remarks accordingly. However, I would like first to endorse the comments of my hon. Friend the Member for South Norfolk (Mr Bacon) and other members of the Committee, in paying tribute to the stewardship of the right hon. Member for Barking (Margaret Hodge). I would like also to thank the National Audit Office, which serves members of the Committee tremendously well.
It sometimes feels as though, as members of the Public Accounts Committee, we are getting a glimpse into the cosseted world of the television studio interviewer. We can climb on a pedestal and enjoy the clear view of hindsight. We have the safety harness of asking questions rather than giving answers. We can look at issues in isolation, rather than being distracted, as decision makers are, by many competing challenges. Yet in the short period in which I have been a member of the Committee, the same issues have kept appearing, with the ticking frequency of a metronome-a lack of accountability; poor data quality; insufficient testing of pilots; inadequate project change controls; and a mismatch of management skill sets. What binds many reports is unnecessary complexity, which invariably adds cost and mask inefficiency.
However, in this, the annual debate on the Public Accounts Committee, it is right to step down from the comfort of our perch and set out some solutions to the challenges that we face. In particular, I want to touch on five areas, subject to the time available. We need to clarify the letters of direction signed by accounting officers on their appointment and make such letters Department-specific. We need to improve the transparency of the information given to Parliament by ensuring that the NAO has unfettered access to National Rail, the BBC and the Bank of England. We need to redefine the role of senior responsible owners, to ensure that the current gap between skills and requirements is addressed. We need to introduce greater standardisation of the data presented by Departments to Committees, to facilitate better benchmarking across Government. We also need to embrace different mechanisms-some of that is already happening-so that we not only hold those making decisions to account, but look at different forums and opportunities to learn lessons.
I do not put forward those suggestions in the belief that they are in any way revolutionary. Nor do I believe, given that not even the brightest of our Sir Humphreys have managed to solve them-indeed, the Public Accounts
Committee has been in existence since 1836-that my proposals are a panacea. They are simply some areas in which the Committee can start to change the direction of travel in a practical way.
I want to give the House an example to illustrate the first of those points, and perhaps the Treasury can take this away as an action for today. It relates to the letters sent to permanent secretaries. The letter dated 13 October 2010 appointing Martin Donnelly as permanent secretary of the Dept of Business, Innovation and Skills makes reference to "RfRl, 2, and 3", without defining what these are, and to section 5(6) of the Government Resources and Accounts Act 2000, to section 5(7) of that Act, and to chapter 3 of the "Managing Public Money" document. It also requires him to look at the Treasury handbook on "Regularity, Propriety and Value for Money". I suggest to the Treasury that a new permanent secretary taking over the reins of a Department has better things to do than read those documents.
We saw in the evidence from Sir Bill Jeffrey that there had been a discussion about why he had not sought a letter of direction, when signing the contracts for the aircraft carriers, on the ground of affordability. There was a lack of clarity there, and that was in conflict with the letter that the Committee had received from Sir Nicholas Macpherson. So it is clear that there are issues there.
Mr Bacon: Will my hon. Friend give way?
Stephen Barclay: I will not, because other colleagues need to speak. In fact, I have time to discuss only this one issue, and I will not talk about the other four. I hope that the Treasury will conduct a review of the letters that go to permanent secretaries, so that they can at least be made Department-specific and self-contained as stand-alone documents. At the moment, they are unclear, and that gives rise to the kind of confusion that we saw in relation to Sir Bill Jeffrey and others.
5.12 pm
Jackie Doyle-Price (Thurrock) (Con): I, too, have the pleasure of being a member of the Public Accounts Committee, serving under the probing chairmanship of the right hon. Member for Barking (Margaret Hodge). I want to follow up some of the points made by my hon. Friend the Member for North East Cambridgeshire (Stephen Barclay). Sometimes serving on the Committee does feel a bit like being in "Groundhog Day", as we see the same issues arising again and again in relation to delays in executing contracts, poor management and so on. I want to concentrate on one theme leading from that, which is leadership.
Leadership is crucial to the delivery of any programme. It involves the ability to take ownership, and to ensure that projects are delivered to deadline and on budget, and that they are fit for purpose and deliver the objectives that they are meant to achieve. Too often, we have found such leadership lacking. My message to my colleagues on the Front Bench is that, given the public spending constraints that we now face, value for money is of central importance, and the Treasury needs to play a much stronger role in ensuring that Departments deliver their obligations. For that reason, I heartily endorse the sentiments in the motion, which will put ministerial accountability at the heart of delivering value for money. Hitherto, the Committee has not called Ministers to
give evidence, but I am fast coming round to the view that there is a case for doing that, so that Treasury and Cabinet Office Ministers can tell us what they are doing to ensure that their colleagues across government are delivering against their obligations.
The right hon. Member for Barking referred to the Committee's report on the 2007 comprehensive spending review. Ministers should read that report, to see where things might go wrong in the current spending environment. There was a massive discrepancy between Departments in the degree to which they were able to deliver against the cuts that were required of them. In particular, the Department for Communities and Local Government had achieved only 5% of its required savings halfway through the inquiry. That brings me back to the importance of leadership and the importance of government as a machine ensuring that the principle of value for money really is pushed all the way through the system.
Other colleagues want to speak in the debate so I shall close by drawing the House's attention to the private finance initiative, which has been the subject of a great deal of work by the Committee. In the recent past, the machinery of government has been rather too attached to PFI as a funding stream, with delivery being focused on completing a deal rather than on whether the PFI contract really represented value for money for the taxpayer and whether it would deliver what was required. The Committee examined the role of the PFI after the credit crunch. We found that the banks had increased the cost of financing PFI projects by up to a third, and that the risks had been transferred back to the public sector at an additional cost of £1 billion to the taxpayer.
It is not surprising that financing costs rose following the credit crunch, but it is very disappointing that the Treasury did not use that occasion to challenge the view that the PFI was still an appropriate funding vehicle for many projects. The contract for the widening of the M25 has already been mentioned. The cost of that was increased by 23%, or £660 million. In the past few weeks, the Secretary of State for Transport has had to announce significant cuts in his expenditure. It is clear that the delivery of other projects has been jeopardised. We are locked into some PFI contracts for 30 years, which means that those that are of poor value will clearly be of ongoing poor value to the taxpayer.
Moreover, a contract of that length is not suitable for some services. Facilities need to be able to react to the constantly changing needs of hospitals, for example. If we nail everything down in a PFI contract, we embed inflexibility in the system. NHS South West Essex primary care trust in my constituency is in a very poor financial state, and is implementing a severe programme of cuts to deal with an overspend. Sitting in the middle is Brentwood community hospital, an underused facility funded by an expensive PFI contract.
My message to the Government is very simple. The Treasury and Ministers throughout Government must be vigilant and fleet of foot in ensuring that their Departments deliver value for money, and a central part of that will consist of responding to the findings in our reports. I look to the Treasury in particular to ensure that appropriate leadership is given, and that we deliver better value for the taxpayer.
5.16 pm
James Wharton (Stockton South) (Con): Thank you for giving me an opportunity to contribute, Mr. Deputy Speaker. I also thank other Members who have curtailed their speeches in order to ensure that everyone has a chance to speak in this important debate. I emphasise the importance of the debate, and also that of the role of the Public Accounts Committee. I am a relatively new Member of Parliament and a new member of the Committee. I hope that the right hon. Member for Stirling (Mrs McGuire) will forgive me if I say that I am indeed learning on the job, and it is a very steep learning curve, but I think that many new members are getting to grips with their role very well. I am pleased to count myself among friends on the Committee, even if we are not all hon. Friends on the Floor of the House.
I must make a brief apology to a rather wonderful lady called Julia Whitehill. She is my constituency caseworker, and she worked diligently to arrange the constituency office drinks party this evening, which I have forgone in order to speak in the debate. If that is not a measure of the importance that I attach to the PAC's work and to the debate, I do not know what is.
I shall touch briefly on just one of the many reports that the Committee has undertaken in the current parliamentary year, because I think that it is of significance to my constituents. Tackling health inequalities has already been mentioned in the debate, and the report to which I refer is entitled "Tackling inequalities in life expectancy in areas with the worst health and deprivation".
My constituency in the north-east of England is at the centre of much of that challenge. We have real deprivation in my region, and we face real challenges in health care and life expectancy, which need to be addressed. The Committee identified some of the failings in policy that had hampered earlier efforts to tackle the problem, and suggested a number of measures that future Governments might wish to take. It found that the health gap between deprived areas and the general population had widened despite the efforts that had clearly been made-I do not deny the legitimate efforts made by the last Government to tackle the problem, and I do not suggest that it is not high on the agenda for many Members in all parts of the House-and that the Department of Health had not set about its important task with sufficient urgency or focus.
The Committee also found that a failure adequately to address GP shortages in areas of deprivation had led to the widening of the gap, or at least had been a significant contributory factor, and that that was still a problem. It suggested that there were opportunities for the Department to identify new measures to drive up GP numbers in areas of deprivation, including the possible use of the GP contract to give GPs an incentive to go to the places where they were most needed.
The NHS spends about 4% of its overall budget on prevention, but the Committee found-this is a recurring theme-that individual commissioner spending was not readily identifiable; as we find when we look at many Government Departments and operations, the lines of accountability were blurred. Time and again we find that accountability suffers when Governments of whatever political hue push forward with measures that do not properly take into account the lessons the Committee tries to help them understand.
Along with funding shortfalls and other problems which, sadly, I do not have time to go into in detail, we found that there is much work to do and that previous efforts had not succeeded. Across so many Departments, the lines of accountability-the ability to measure what is supposed to be achieved and to set milestones on where we are meant to be going-are lacking in the plans put forward, whether by civil servants, Ministers or political parties. A huge amount of work needs to be done to change the way government functions so that Governments can deliver their objectives, whatever they might be. Whatever our political outlook, we all have an interest in ensuring that Governments work efficiently so that when Ministers pull the levers of power, things happen in the way that is intended. A key aspect of the PAC's role is identifying where Governments do not deliver in the way they are supposed to, irrespective of policy determination or the lead coming from the Ministers at the top.
I am conscious of the time constraints but I merely wanted to have the opportunity to make this contribution and to put on record my admiration for the work that our wonderful Chairman, the right hon. Member for Barking (Margaret Hodge), is doing in leading us through a challenging set of reports and issues. Our work load is, I think, greater than that of the other Select Committees of this great House at this time, as is the pace at which we tackle it. I am extremely pleased to be a member of the Committee and to have had this opportunity to contribute to the debate. I will end my remarks now in the hope that other Members will also be able to contribute.
5.21 pm
Joseph Johnson (Orpington) (Con): I thank those hon. Members who have curtailed their speeches, and due to the severe time constraints, I will also limit myself to addressing just one theme. It is the theme we discussed in the recent hearing on the Department for International Development: supporting primary education around the world. That is a subject in which I take a particular interest.
That hearing contrasted with many of the other hearings the Committee has had, because DFID is not a repeat offender in the sense that it is not having to be forced to implement past PAC reports. It is a Department that is being reformed from top to bottom, very much in the spirit of the long line of PAC reports that have been critical of value for money within the Department.
The hearing provided us with a very good insight into the work of a Department that is of major importance to the coalition and will become of increasing importance as we meet our commitment to lift the share of aid spending to 0.7% of national income by 2013. Let there be no doubt as to my support for this commitment, which demonstrates the coalition's determination to stand behind the poorest people around the world. However, at a time of severe retrenchment across unprotected Government Departments, it is all the more crucial that DFID continues the work that has been ongoing-since May, I would say-to do more to secure maximum value for money for the UK taxpayer and the greatest possible impact for those whom the Department is trying to help. The PAC hearing raised a number of concerns in this respect.
First, the primary education programme supported by DFID illustrates the way the Department has, until recently, made astonishingly little attempt to measure value for money in even its biggest programmes. DFID's rationale for investing in education is that it brings wider benefits which support poverty reduction, but the National Audit Office report and then the PAC hearing clearly found that too much emphasis has been placed on measuring simply the numbers entering education and that DFID has been too quick to claim credit for increases in enrolment rates that are hard to link directly to its programmes. It is also clear that the Department has paid too little attention to how many children are actually attending and completing primary school education, along with the standard of literacy and numeracy they attain. Those are key areas where limited progress has been made. I am glad that, since May, value for money has been vigorously addressed by the new Secretary of State and his team. There is the clear objective of reorienting the entire aid programme to focus on results, not inputs.
That is all the more important in the context of a comprehensive spending review where DFID's budget is being increased quite substantially, from £6.3 billion this year to £9.4 billion by 2014-15. That is the single biggest increase across all Departments and is an increase of 37% in real terms. By 2014-15, DFID will be bigger even than the Home Office and the Ministry of Justice. That is why I particularly appreciate the work that it is doing to set up the Independent Commission for Aid Impact, which will further emphasise the new value for money priority of the Department. A chief commissioner is in place and is starting work as we speak.
It is also worth pointing out that even though DFID's budget is expanding, the Department is not losing its focus on administrative efficiency and value for money. That is another area where we can commend the way in which the Department is pre-emptively addressing the concerns that we were raising in the PAC hearing. Although DFID's overall budget is increasing, administrative costs within the Department are to be reduced by 33% over the course of the comprehensive spending review period. There is certainly evidence to suggest that there is still fat to be cut. I find it surprising that, in an aid Department, there are civil servants earning £175,000, and I am not sure that that sets a great example to the pro bono sector in general.
Lastly, I return to where I started. Measuring outcomes accurately and demonstrating value for money will help to build public support and buy-in for the substantial expansion of the DFID budget that we are programming over the coming years. The PAC's work in that respect will make a valuable contribution to the process.
5.26 pm
Ian Swales (Redcar) (LD): I shall be brief. I am also new to the House and the Public Accounts Committee, and I thoroughly enjoy working for the right hon. Member for Barking (Margaret Hodge) and respect the massive expertise of my fellow Committee members.
I wish to discuss the recurring themes of our work, which is an issue that has been mentioned today. Even at this early stage, I recognise the same messages coming out again and again. The hon. Members for South Norfolk (Mr Bacon) and for Great Grimsby (Austin Mitchell),
who are the corporate memory of our Committee, often remind us of that. I was recently contacted by a former senior civil servant in the Home Office, who discovered that I was serving on the PAC and wrote me a long e-mail outlining the issues as he remembered them, how the Committee's recommendations were dealt with and the crucial issue of accountability. Although he retired seven years ago, his e-mail could have been written about what was happening yesterday.
I am conscious that the Committee tends to review problem areas, rather than successes, and so one perhaps gets a slightly jaundiced view. However, one is struck by the eye-watering sums we often talk about and one can get desensitised. One begins to think that £100 million of waste does not seem too much. Last week, we held a review of errors in the benefits system and it was suggested that £1 billion might be some kind of irreducible minimum. It is inconceivable that that discussion would take place in the private sector with that conclusion being reached.
I support the comments that have been made about leadership. I describe the people who the Committee sees as the good, the bad and the slippery. We get some very good ones, but we certainly get some of the other types too. I was going to talk in detail about the consultancy area, of which I have direct experience, but time does not permit me to do so. I shall therefore pick up just one point on that, which was that consultants tend to be engaged on a time basis, rather than on the basis of fixed outcomes, fixed prices.
So many of our reviews have huge time scales; it is common to be talking about issues that have taken longer than the second world war to sort out. That raises questions about the way the Government contract, engage consultants and so on and whether they really get things done in a timely fashion.
I recognise that there are challenges ahead. Although I welcome some of the Government's movements on accountability and business plans, there are challenges involving the comprehensive spending review as well as two issues that have not been mentioned yet. The first is the abolition of the Audit Commission, and I still think we need to decide what the post-life is on that. Secondly, crucially, much Government money is now going to outside bodies that are beyond the reach of the National Audit Office. For example, in the consultancy world, £700 million is estimated to go to outside bodies versus £1 billion in departmental spending.
I welcome the motion, which seems a step in the right direction. It is right that we should not engage in political discussion or decision making, but many of our conclusions are not just about the Treasury-they require ministerial action. I commend the motion to the House.
5.30 pm
Mr David Hanson (Delyn) (Lab): I have sat through the debate and found it extremely positive in its approach to the issues. There is a great deal of cross-party support for making how we manage issues in government a key focus.
May I begin by paying tribute to my right hon. Friend the Member for Barking (Margaret Hodge)? It is already clear that she has not only a grasp of the role
of the Public Accounts Committee but the respect and support of Members on both sides of the House. It is crucial to consider the PAC's role by leaving aside party politics and examining where systemic failures in Government expenditure occur.
May I also echo my right hon. Friend's thanks and support for the hon. Member for Gainsborough (Mr Leigh)? He served the House of Commons well during his period in office, when he produced more than 400 reports on a range of issues. I can honestly say that during the last Parliament I appeared to wake up most mornings to the hon. Gentleman on the radio, kicking somebody. As a Minister in the last Government, I was often grateful that it was not me.
I welcome the approach taken in the motion. I will support it as I recognise that it contains elements that will help to strengthen the accountability of Ministers for acting upon the reports that they have accepted as recommendations from the PAC. Anything that puts in place a mechanism that will make Ministers and their civil servants know that they have to report back to the House on progress on measures that they have accepted and agreed to do is extremely important.
I am grateful for the speeches made by right hon. and hon. Members on both sides of the House. Several key themes have come out of the debate. First, we have seen the importance of the scrutiny role that the PAC will perform and has performed. The hon. Member for Orpington (Joseph Johnson) pointed out the recent report on the activities undertaken by DFID.
The hon. Member for South Norfolk (Mr Bacon) referred to not just scrutiny but to the positive actions taken on hospital-acquired infection as a result of reports undertaken by the PAC. Indeed, he mentioned the improvements that are taking place in the Home Office. I can speak from personal experience as for a short period I was subject to a report as a Minister in the Ministry of Justice. It was on the National Offender Management Service's C-NOMIS programme, which is an interesting point to which I shall return later. I became a Minister three and a half years after the programme commenced, froze the project three months after my inauguration in the Department and was subject to a PAC report that considered a range of issues. Civil servants had come, gone and left before I came and, after I left, civil servants were still managing that project. There are important lessons that we need to consider.
The scrutiny role of the PAC is important, but key issues to do with good governance have arisen in today's debate and they are equally important. The hon. Member for North East Cambridgeshire (Stephen Barclay) listed clearly what is required of good governance in any project management. It is the sort of project management that anybody in the private sector or the voluntary sector who has responsibility for resources will undertake. Even in our private lives, most of us will undertake such good governance to ensure that we meet collective objectives. The hon. Gentleman's point was also reflected in the comments of the hon. Member for Thurrock (Jackie Doyle-Price) on the leadership that is required for the role of good governance. The hon. Member for Southport (Dr Pugh) also touched on that.
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