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Baroness Sharp of Guildford: I support what the noble Lord, Lord Higgins, said in terms of welcoming this move towards the whole of government accounts. It is a very important issue. Opposition Peers are anxious to see fixed assets in addition to the pension side. One aspect that would be revealed by producing the balance sheet would be the running down of fixed assets in the public sector and the public sector infrastructure over the course of the past 20 or so years, which is very much a question of what one generation passes on to another. It would be a very valuable exercise and we thoroughly endorse it.

7 p.m.

Lord McIntosh of Haringey: As the noble Lord, Lord Higgins, knows, I share his hobbyhorse on pensions in particular, and on inter-generational equity. I hope that in due course the preparation of the whole of government accounts will make it easier for

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us to look at long term liabilities as well as assets, although whether that will be possible in the short or medium term, I am far from sure.

I was asked about the timing of the whole of government accounts. Our present view is that we think it will be possible to publish audited central government accounts for 2002 to 2003 onwards, with full audited whole of government accounts perhaps—and I have to say perhaps—from 2005 to 2006 onwards. It is clear that this is a long and very difficult process indeed, and some of it depends not on central government but on the other public sector organisations that are going to have to be brought into it.

The noble Lord, Lord Higgins, and the noble Baroness, Lady Sharp, are entirely right about the way in which whole of government accounts fit into our strategy. It is part of the commitment in the code of fiscal stability; it is part of all of our thinking about taking a realistic view about what works and what does not work, rather than about ideology.

I should kill any suggestion that this means that the existing national accounts are defective, because national accounts are produced within the internationally agreed system of national accounts. They provide an adequate basis for the conduct of fiscal policy, and I do not think we should opt out of our international obligations in this way. We are committed to strengthening the fiscal framework, and we believe that accounts based on generally accepted accounting principles for the public sector offer an improved basis for monitoring developments and taking decisions.

We plan that ONS statistics will be used to produce and publish unaudited whole of government accounts from 2001 onwards. I very much welcome the tone in which this clause has been debated.

Clause 9, as amended, agreed to.

Clause 10 [Obtaining information]:

Lord McIntosh of Haringey moved Amendment No. 21:

    Page 6, line 18, after ("body") insert ("or giving a direction under subsection (5)").

The noble Lord said: These are all what I call Welsh amendments; they are on slightly different subjects but they have all been requested by the National Assembly for Wales. They provide for consultation with the National Assembly and they amend the Government of Wales Act to bring it into line with the Bill. Let me say immediately that we do not need similar amendments for Scotland because Scotland has a parliament and they are introducing their own equivalent of the Government Resource and Accounts Bill. Indeed, I rather think they are ahead of us.

Amendment No. 21 extends the requirement for the Treasury to consult the National Assembly for Wales on the form, audit and delivery of accounts that form part of the whole of government accounts. The National Assembly will be using the information to produce whole of government for Wales accounts to be laid before the Assembly.

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Amendment No. 24 amends Clause 14 to provide for the Treasury to consult the National Assembly and the Auditor General for Wales before disapplying the requirement for a health body in Wales to be included in summarised accounts for a particular year. Amendment No. 25 to Clause 15 is an amendment to the Government of Wales Act. It uses the word "resources" which does not otherwise appear in the Government of Wales Act. Amendment No. 34 amends Clause 28 to provide for the Treasury to consult the National Assembly for Wales before designating Welsh bodies for inclusion in the "dry-run" whole of government accounts. Amendment No. 37 amends the Health Service Commissioners Act to extend the time for preparation of the commissioners' accounts in Wales and bring these into line with other accounts covered by the Bill. Amendment No. 40 provides the necessary powers in the Government of Wales Act for the National Assembly to have whole of government of Wales accounts to be produced and audited. Amendment No. 42 provides a power for the Treasury to amend, after consultation, the date by which the National Assembly for Wales and its associated bodies must produce accounts.

Because of the complexity of producing whole of government and whole of government of Wales accounts, all accounts preparation timetables are being extended to 30th November. Once they settle in, we propose to shorten the timetable for preparation. The Bill already provides the Treasury with powers to amend the timescale for England, and this amendment parallels the situation for Wales after consultation with the National Assembly and the Auditor General for Wales. I beg to move.

On Question, amendment agreed to.

On Question, whether Clause 10, as amended, shall stand part of the Bill?

Lord Higgins: This clause, as amended, is concerned with obtaining information in relation to the whole of government accounts. It seemed to us that there were a few points which ought to be made on this and I hope this is an appropriate point to do so.

With regard to the provision of information, there are a number of issues with which we are concerned, such as the cost of capital and depreciation. Until now, we have not found an appropriate point to raise that. The Minister may feel that it is not appropriate at this stage, but at some point we need to consider—because the earlier clauses deal with it—what estimate of the cost of capital would be made available. Perhaps I might consider that, because I suddenly realise that there is a gap in the point I was concerned about. I would not wish to oppose the clause as it now stands.

Clause 10, as amended, agreed to.

Clause 11 [Scrutiny]:

[Amendment No. 22 not moved.]

Clause 11 agreed to.

[Amendment No. 23 not moved.]

Clauses 12 and 13 agreed to.

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Clause 14 [Summarised accounts]:

Lord McIntosh of Haringey moved Amendment No. 24:

    Page 9, line 17, at end insert—

("( ) Where the function under section 98(4) of the National Health Service Act 1977 is exercisable in respect of a body by the National Assembly for Wales—
(a) the Treasury shall consult the National Assembly for Wales and the Auditor General for Wales before making an order in respect of the body under subsection (1) above, and
(b) subsection (3) above shall not apply.").

On Question, amendment agreed to.

Clause 14, as amended, agreed to.

Clause 15 [Finance]:

Lord McIntosh of Haringey moved Amendment No. 25:

    Page 9, line 26, after ("resources") insert ("(within the meaning of the Government Resources and Accounts Act 2000)").

On Question, amendment agreed to.

Clause 15, as amended, agreed to.

Clause 16 [Expenditure]:

Viscount Bridgeman moved Amendment No. 26:

    Page 9, line 31, after ("on") insert ("upstream").

The noble Viscount said: With permission, I will speak also to Amendments Nos. 27 to 32. They arise largely from a point made by my honourable friend, Mr Howard Flight, in the early stages of the Bill in another place. I would also refer members of the Committee to the private finance initiative report in which there was a very strong recommendation that no equity stake should be taken by PUK in the PFI projects.

We feel that the investment powers of Partnerships UK are at present too loosely drawn. We have therefore sought to spell out on the face of the Bill that the role of Partnerships UK is that of initial facilitator and provider of initial expertise. It introduces the definition, which we consider very important, of upstream. I suggest that Amendments Nos. 31 and 32 meet the objectives of Partnerships UK. I hope that this reflects the thinking of the Government to date and the result of their consultations with industry, lawyers and the PFI team in the Treasury as to what constitutes reasonable activities.

The Government referred to an upper limit of £1 billion expenditure on these projects. We feel that that is too much and seek to introduce a cap in the Bill of £500 million.

Finally, there are two housekeeping amendments, Amendments Nos. 28 and 30, that reflect the spirit of the Committee this afternoon. I beg to move.

Lord McIntosh of Haringey : Am I right in thinking that the noble Viscount referred to Amendments Nos. 26 to 32—the whole group?

Viscount Bridgeman: Yes.

Lord McIntosh of Haringey: That is fine by me because I am happy to treat all the issues relating to

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Partnerships UK although, having read the amendments, I have to say that I am somewhat puzzled by them, particularly the amendments to Clause 17. The amendments to Clause 16 are only subsidiary amendments. They appear to provide a new definition of public/private partnership business, which is unnecessary as the present definition in Clause 17 is suitable for a pioneering business that is expected to grow over time.

Let me begin by outlining the role of Partnerships UK. It will not be an adviser—there are plenty of those in the market already. Its primary aim is to address the skill deficit on the public sector side of the PFI/PPP procurement process. It will build on the work of the Treasury taskforce, which has been set up for a finite time, and accelerate the flow of value for money public/private partnerships.

Partnerships UK will operate by working with departments and other public sector bodies in a unique way; that is, as a co-developer of projects, sitting alongside public sector project teams and taking decisions with them. Partnerships UK and public sector procurers will act as joint venture partners with the object of the joint venture being the delivery of a value for money procurement on time.

Partnerships UK will not operate as a bank. It will not provide long-term debt for PFI projects. Instead, in support of its core co-developer role it will provide development funding where appropriate to get PFI deals off the ground where existing forms of private finance are not available. Partnerships UK will therefore enhance existing flows of private finance.

For example, Partnerships UK might help to bundle together projects that are individually too small to be economically viable for private sector bidders. It might provide support for contractors' bidding costs on large or novel projects. The scope of public/private partnerships is widening all the time with new forms of partnership such as wider markets being developed. In this context, Partnerships UK can only remain effective as an organisation over the medium and long term by developing and changing its business so that it stays at the cutting edge.

The amendments would restrict the scope of Partnerships UK and take away its flexibility to adapt and evolve over time. They are inconsistent with our aims to create an innovative organisation capable of making a significant contribution to the Government's modernisation programme.

Amendments Nos. 28 and 30 both seek in similar terms to open Partnerships UK's accounts to scrutiny by the Comptroller and Auditor General. The noble Viscount described them as "housekeeping". However, Partnerships UK will be a risk-taking public sector body. It will have a majority of private sector investors who will expect a return on their investment and it will, of necessity, need to act commercially in order to raise finance and make a success of its business.

It is not appropriate or necessary for PUK to be inspected by a public sector audit body. This is a job for a Companies Act auditor who is appointed in the

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normal way to deal with private companies. Accountability for PFI and PPP projects will, as now, remain with the Whitehall departments and other public bodies who commission them. The NAO has already reported on a number of private finance schemes. Last July the Treasury issued guidance on the standardisation of private finance contracts which makes clear that PFI contracts should include clauses to ensure appropriate NAO access. I hope that that provides the assurance that the noble Viscount, Lord Bridgeman, seeks.

There should not, therefore, be any problem in practice about the NAO securing necessary access to assess PFI projects; indeed, the Public Accounts Committee will undoubtedly ask it to do so. Under the provisions of this Bill any government investment in Partnerships UK will come out of voted money. Therefore, it will be covered by appropriation or, soon, by resource accounts which are audited by the NAO. That is no different from other payments by departments to the private sector. I conclude, therefore, that the Comptroller and Auditor General has the access that he needs to do his job effectively.

Finally, I turn to Amendment No. 29 which is possibly out of date. It provides for a limit of £500 million. However, at Report stage in the other place we tabled a new clause, which is now Clause 18, to limit the investment to £400 million. I hope that that satisfies the noble Viscount.

7.15 p.m.

Viscount Bridgeman: Before the noble Lord sits down, I request clarification. Does Clause 18 totally absorb my amendment?

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