2 Accountability and the reform agenda
5. Reform, localism and devolving responsibility
for public services are central to the Coalition Government's
policy agenda, particularly in health, education, local government
and justice.[4] The Government's
intention is that this will give local people and service users
a greater say in how their services are run and/or the freedom
to run things themselves.[5]
For example, free schools are intended to encourage more local
engagement with and control over education.[6]
This continues the trend which has seen a multitude of delivery
bodies secede from direct departmental control.
6. Central
government collects most of the taxes to fund services delivered
locally. There must be sufficient recognition of accountability
for the use of taxpayers' money given that 56% of local government
spending is funded by central government (Figure 2) and local
taxes contribute only around 5% of total tax revenue. In health,
all the money allocated through Foundation Trusts and GP consortia
will be raised through general taxation. Three-quarters of police
funding is provided by central government and a quarter by local
funding. While it is not yet possible to be definitive about the
level of resources that will be allocated to local bodies, the
National Audit Office estimates that at present 37% of central
government tax receipts are routed through them (Figure 3).
Even if associated local accountability arrangements are satisfactorily
defined, taking service delivery down to the lowest possible local
level risks diluting parliamentary accountability for a considerable
amount of central government spending and the use of taxpayers'
money.
Figure 2 Funding of local spending
| Area of spend
| Total funding (£billion)
| Local funding (£billion)
| Central funding (£billion)
|
| Health
(PCT funding only)
| 89.0 |
0
(0% of total)
| 89.0
(100% of total)
|
| Education | 37.0
| 0
(0% of total)
| 37.0
(100% of total)
|
| Police
(2009-10 figures)
| 12.9 |
3.1
(24% of total)
| 9.8
(76% of total)
|
| Local Government (excluding Police)
| 126.6
| 71.3
(56% of total)
| 55.3
(44% of total)
|
| Total | 265.5
| 74.4
(28% of total)
| 191.1
(72% of total)
|
Source: National Audit Office analysis (based
on 2010 Spending Review and Local Government Finance Settlement)
Figure 3 Local spending as a percentage of total
central government receipts
| Local spend funded centrally
| Central funding (£billion)
| Percentage of total central government receipts
of £523 billion (1)
|
| Health
(PCT funding only)
| 89.0 |
17% |
| Education | 37.0
| 7% |
| Police
(2009-10 figures)
| 9.8 |
1.9% |
| Local Government | 55.3
| 10.6%
|
| Total | 191.1
| 36.5%
|
(1) Comprising total government receipts of £548
billion minus £25 billion raised locally (June Budget 2010)
Source: National Audit Office analysis (based
on 2010 Budget, Spending Review and Local Government Finance Settlement)
7. We appreciate that there are other forms of accountability
involved in the new arrangements, such as direct accountability
to service users. However, Parliament must still be able to 'follow
the pound' to scrutinise the use of devolved resources, and accountability
arrangements must be clarified before devolved models are implemented.
Any service delivery mechanism such as 'tight-loose' needs to
include proper accountability for taxpayers' money.[7]
8. While there already exist relatively robust, transparent
and deeply-rooted accountability arrangements at the central level
- of which this Committee is part - the accountability arrangements
at local level, local government excepted, are not as sophisticated
or developed. The Government's view is that the principal accountability
for how the money is spent and whether it has been spent well
is between the provider and the service user, for example the
GP and the patient.[8]
But thinking on how, in practice, local communities hold local
bodies accountable is rudimentary.[9]
For example, defining how patients will hold their local GPs to
account when GPs are put in charge of commissioning services remains
unclear and uncertain.
9. In our view accountability systems need to be
much more strongly developed to enable effective transfer of responsibility
for cost and value for money to the local level. Relying on local
groups and individuals to hold local service providers to account
may highlight quality of service issues but is less likely to
focus on cost and value for money as funds will be provided centrally.[10]
Currently, patients have little or no access to information on
the cost, quality or value for money of their care and are unable
to make clinical or value for money judgements between alternative
treatments.[11] Even
if they could, the quality of care would be the overriding priority;
cost and value for money would be secondary considerations in
making choices.[12]
10. New structures for accountability must not absolve
Accounting Officers of their personal responsibility to gain assurance
on the way funds voted to them are spent.[13]
The Treasury acknowledged that a critical role for Accounting
Officers in all departments is to satisfy themselves there is
a sensible framework to promote value for money and that financial
systems are robust.[14]
The Cabinet Office and the Treasury distinguished between Accounting
Officers' accountability for systemic issues which result in poor
value for money across all local bodies, and accountability to
the local community or service user for the performance of local
bodies. For example, the Accounting Officer should not be held
to account for the performance of an individual academy.[15]
11. While we reserve the right to hold departmental
Accounting Officers to account for systemic performance issues
and individual public bodies to account for their use of taxpayers'
money, we are concerned that it would be difficult for this Committee
to exercise parliamentary accountability by holding innumerable
local delivery bodies to account for their use of public resources.[16]
For example, in our hearing on the Health Landscape Review, it
was unclear where accountability rests for the performance of
Foundation Trusts.[17]
We consider that new policy initiatives which involve the devolution
of resources to local service providers should not be launched
without establishing a clear mechanism which will ensure proper
accountability to Parliament. This mechanism should provide a
clear structure, robust financial management and comparable information
so that performance can be scrutinised.
12. We therefore welcome the Treasury's confirmation
that any system must give Parliament the necessary level of assurance
about how taxpayers' money is spent.[18]
A critical role for the Accounting Officer of all departments
is to satisfy themselves there is a sensible framework to promote
value for money.[19]
This is fundamental to the relationship between the Treasury and
Parliament, in particular this Committee, and is reflected in
the Concordat agreed in 1932.[20]
We were told that Sir Bob Kerslake, the Permanent Secretary at
the Department for Communities and Local Government, is undertaking
a review of the accountability implications of localism.[21]
4 Q 72 Back
5
http://www.communities.gov.uk/localgovernment/decentralisation/localismbill/ Back
6
Committee of Public Accounts, 17th Report of Session
2010-11, The Academies Programme, January 2011, HC 552 Back
7
Q 79 Back
8
Qq 74-75, 81 Back
9
Q 75 Back
10
Q 93 Back
11
Q 82 Back
12
Q 82 Back
13
Qq 78, 90, 92 Back
14
Qq 71, 90 Back
15
Qq 76, 91-92 Back
16
Qq 73, 76 Back
17
Committee of Public Accounts hearing, Health Landscape Review,
25 January 2011, HC 764-i Back
18
Qq 71-72, 76, 78-79 Back
19
Q 71 Back
20
Q 79 Back
21
Q 72 Back
| 
