Select Committee on Constitution Sixth Report


CHAPTER 10: improving parliamentary scrutiny

174.  Parliament is crucial to ensuring accountability. It not only creates the regulators by statute, it also calls ministers to account for the policy that is implemented by the regulators and acts on behalf of citizens in ensuring that ministers and regulators are acting in the public interest. Hence its place at the apex in Figure 1 (paragraph 48). The Figure itself does not do full justice to Parliament's place in accountability. Those bodies that have no formal power to require regulators to respond can make representations to Parliament to seek action and redress. If Parliament is not working effectively, then accountability cannot be delivered.

175.  Parliament receives representations from a wide range of bodies and individuals.[164] Citizens, be it as individuals or represented collectively through an organised group, have increasingly made contact with parliamentarians. There has been a substantial increase in mail received by members of both Houses. In the mid-1960s, the number of letters received by MPs was 10,000 a week. By the mid-1990s, it was 40,000 a day. In 2003, the total number of items of post received in both Houses of Parliament was 12.5 million.[165] In addition to letters, MPs and peers receive a growing number of e-mails and telephone calls and spend considerable time in meetings with constituents and representatives of interest groups.

176.  Citizens thus make ample use of the opportunity to contact parliamentarians. What, though, can and does Parliament do to ensure that their interests are protected? How does Parliament engage in scrutiny of Government and regulators? There are various tools available to Members of Parliament to subject Ministers to scrutiny and influence. These include debates and Question Time. Ministers appear at the despatch box to justify their actions and answer questions. Regulators, however, do not appear at the despatch box. For parliamentarians to scrutinise the performance of regulators, they have to utilise committees.

177.  Parliament scrutinises the regulators primarily through select committees of either House or joint committees.[166] Most notably in terms of the scrutiny of independent regulators there are regular inquiries by:

  • The Public Accounts Committee (PAC);
  • Departmental select committees of the House of Commons;
  • Cross-cutting (thematic) committees, such as the Public Administration Committee and Environmental Audit Committee.

178.  The PAC is directly supported by the NAO, whose reports on audited accounts and value for money studies precede PAC inquiries of their own.

179.  Departmental select committees scrutinise the expenditure, administration and policy of particular Government departments and the regulatory bodies sponsored by those departments. The Trade and Industry Committee, for example, has within its remit Postcomm and the Gas and Electricity Markets Authority (GEMA). Thematic committees cut across departmental responsibilities, and therefore may also scrutinise the regulators: for example, the Environmental Audit Committee has carried out inquiries on water services and called Philip Fletcher, the then Director General, before them.

180.  Given that parliamentary scrutiny is at the heart of the system for holding regulators to account, its effectiveness is of paramount concern. We have heard evidence that parliamentary scrutiny is effective, and there is strong support for that scrutiny to be effective. "Parliamentary select committees and the National Audit Office have effectively held regulators accountable for their actions".[167]

181.  However, we have also heard that parliamentary scrutiny can be ineffective, either in not addressing the substantive issues in sufficient depth, or being diverted from, or trivialising issues, for reasons of political gaming alone, or missing areas of inquiry which could, or should, have been pursued. Sir Bryan Carsberg told us that parliamentary scrutiny was less demanding than he might have expected.[168] British Energy was frank: "… the lack of any direct incentive on Ofgem to control its costs and hence prioritise its work remains a cause for concern. Scrutiny by such bodies as the Trade and Industry Select Committee (TISC), the National Audit Office (NAO), the Public Accounts Committee (PAC) and the Treasury does not appear to have had any meaningful effect".[169] The Royal Mail told us "With regard to the two key documents that Postcomm do produce, which are their annual report and their annual work plan, there is not any regular select committee scrutiny of those documents and they are not held accountable for what is in them".[170] The Equitable Members' Action Group - whose comments can now be placed in the context of Lord Penrose's recent report (2004) - said that: "the FSA's performance of doing nothing was disgraceful, and it should be held to account…. there is no effective means for consumers to achieve this and seek redress for the FSA's neglect of their interests" and that "We believe the FSA is not satisfactorily accountable to Parliament. We recommend that the National Audit Office should be empowered to undertake efficiency studies of the FSA, and that the Parliamentary Ombudsman should be empowered to investigate it for maladministration".[171]

182.  We are very conscious of the critical nature of evidence we have received about the role of parliamentary scrutiny, and the need for Parliament to give serious consideration to the way in which it carries out its scrutiny, and the effectiveness of that scrutiny.[172] However, we also take note of warnings that parliamentary scrutiny should be effective, not overdone.[173] Parliament perhaps needs to pay more attention to the information it requires.[174]

183.  Three issues raised, therefore, are those of capacity, consistency, and co-ordination.

Capacity

184.  The capacity for effective scrutiny depends on the skill and resources available to the committee. In part this relates to the resources and experience of the individual committee members, in part to the support services available to the committee, whether through the clerk and the secretariat, specialist advisers or access to other professional sources. It also relates to the continuity of experience available to the committee, and the balance of the membership. We have heard evidence that select committees cannot be effective if they are under-resourced and particularly compared to the regulators they hold to account. "If, for example, a select committee wanted to have a clear understanding of how the commission, through a series of reports ... had dealt with and implemented a particular broad issue (eg cost of capital) … I do not think that is possible without considerable expert advice". [175]

185.  It is a question for Parliament whether its select committees are adequately resourced to maintain the effective level of scrutiny of regulators which Parliament itself desires. On the positive side, we note that resources have increased in recent years and some committees, such as Defence, have proved very active in drawing on the services of a range of specialist advisers. Much more extensive use has also been made of the National Audit Office.

186.  The developing work of the NAO in supporting various committees of Parliament is noteworthy. It has, by agreement, worked with, for example, the Treasury and Civil Service Committee, the Environment, Transport and Regional Affairs Committee, and the Public Administration Select Committee and is involved in supporting the Scrutiny Unit of the House of Commons.[176] Clearly such partnership increases the effective capacity of parliamentary committees as a whole, and such partnership is therefore to be welcomed. Its development could play an important role in improving the capacity of select committees to hold regulators to account effectively.

187.  However, resources include not only expert assistance but also time. Time, in parliamentary terms, is a precious commodity. Members of Committees have many other responsibilities and the time available to meet necessarily limits what a Committee can do. Those other responsibilities - primarily parliamentary and constituency activities - are, as the volume of correspondence indicates, growing. A Committee will normally hold only one full meeting each week. MPs may be on other Committees and will often have other duties to attend to, including in the Chamber itself, at precisely the time the select committee is sitting. Committees therefore have to be highly selective in their choice of inquiries. There is a tendency to go for policy inquiries at the expense of inquiries into expenditure and administration. Access to expert advice may have increased in recent years but so too has the complexity of policy making and the structure of governance.

188.  Any study of a regulator or regulatory decision has to compete with a range of other issues commanding the attention of the relevant departmental committee. To engage in a regular review of regulatory bodies sponsored by a particular department would have a significant opportunity cost for a select committee. We fully understand, therefore, why scrutiny of regulators is occasional, lodging alongside a number of other important matters requiring the attention of the committees.

Consistency

189.  The consistency of scrutiny relates to the regularity and ambit of that scrutiny. Regular ad hoc inquiries are not sufficient - valuable and necessary as those inquiries might be - to ensure comprehensive scrutiny which takes into account all of the activities of the regulator, or continuity of examination, in that focus on the key accountabilities of the regulators is maintained. Consistency reflects the aim of comprehensive and on-going scrutiny, supported by the necessary capacity to carry out effective inquiries with continuity.

190.  The annual reports of the regulators, complemented by associated forward programmes and regulatory impact assessments provide a framework for consistent scrutiny. If annual reports are to be an on-going focus for consistent scrutiny, then it is a question for Parliament whether the contents of those reports should be more directed towards meeting the needs of parliamentary scrutiny. At present, the normal statutory requirement is for regulators to be required to prepare an annual report for Ministers (quite properly as part of the regulators' accountability to the Ministers who appoint them, and to show how they have carried out their functions independently of Ministers), and for those reports to be laid by Ministers before Parliament, reflecting the hierarchy of accountability of independent regulators to Ministers and Parliament, and of Ministers to Parliament.[177]

191.  The annual report may be required to address different audiences as part of the regulators 360o accountability to interested parties already described. Different reports, albeit building on a common core relating to the activities of the regulator, might therefore be required. Select committees interested in consistency of scrutiny might therefore find it helpful to specify, and be engaged in, determining the form of the regular information reported to Parliament. Parliament could give consideration to how this might be effected.

192.  Provision of relevant information is one side of achieving consistent scrutiny; the other side is continuity and focus in the members and committees carrying out that scrutiny. Responsive politics is an essential part of accountability to citizens, and the ad hoc select committee inquiry into an urgent regulatory issue plays an essential part, and must continue. We have received evidence that the House of Commons' select committees play this role well. However, as we have seen, there is the problem of ensuring that there is the time and expertise necessary in order to engage in regular scrutiny. We have heard that the political impetuses of select committees undermine consistent scrutiny. This, again, is understandable. There is a natural tendency to go for an immediate, and topical, issue - such as a particular regulatory failure - than there is to engage in regular, essentially low-key scrutiny of a regulatory body that is performing in an unexceptional manner. Another problem is that continuity of membership of House of Commons committees is hard to achieve. The lack of such continuity could impair the quality of scrutiny.

Co-ordination

193.  We have referred to the need for co-ordination by the Government in creating a whole of Government view of regulation - a best practice requirement well set out by OECD in its recommendations to member states. Parliament, equally, should address the question of co-ordination in its scrutiny of regulators if it is to ensure the most effective use of its capacity. We have referred to the growing partnerships with the National Audit Office. The task for Parliament is to determine how to ensure co-ordination of a consistent, on-going programme of cost-effective scrutiny might best be achieved, budgeted for, and resourced, without limiting the discretion for necessary ad hoc inquiries as and when required. The two exercises would, we believe, complement one another: a committee's knowledge of the wider context of on-going regulatory scrutiny would make for more informed scrutiny of particular decisions.

194.  Co-ordination is an important dimension and parallels our view of what should happen in Government. The need for central institutions of Government to facilitate and promote the development of good regulation and harmonised practice, and our recommendation that the roles of the Cabinet Office, the Treasury, the DTI, the Prime Minister's Office and the NAO be clarified in this regard, has implications for parliamentary scrutiny of these overall centralised functions. The Cabinet Office, with its key functions related to supporting the Better Regulation Task Force, and to control through the Regulatory Impact Unit (in particular relating to the requirements on departments and regulators for, and quality control of, RIAs) is scrutinised by a number of select committees from time to time, but lacks a focused regulatory counterpart in Parliament. We believe that there should be a counterpart.

Enhancing parliamentary scrutiny

195.  We have heard evidence from a number of witnesses advocating greater parliamentary scrutiny of regulators. Some have put the case for a select committee in the House of Commons. (There is an interesting precedent in that one of the earliest examples of an effective thematic scrutiny committee was the Select Committee on Nationalised Industries.)[178] The argument for a Commons committee is that by virtue of being in the elected House it would have the standing and the public profile necessary for the task. A number of committees have undertaken inquiries into particular regulators or regulators and there is therefore some experience of engaging in such an exercise. The House of Commons has an extensive infrastructure of select committees with interests in regulation. Callum McCarthy, (then Chairman and Chief Executive of the Gas and Electricity Markets Authority and now Chairman of the FSA) told us: "I think that inevitably we are going to be accountable to a large number of committees. There is of course one committee in the Commons…it looks at a number of regulators…I happen to believe that the trade and industry committee is a rather expert committee…I find that the argument for having a particular committee just looking at regulators is an argument which does need teasing through".[179] Ann Robinson, the (then) Chairman of Energywatch, told us: "I would like a regulatory committee something like the PAC - something with real teeth that can carry out investigations … I was actually quite attracted to [Clare Spottiswoode's] arguments for it being in the House of Lords, from the point of view of objectivity. To be perfectly honest, however, put that way, I think that it probably ought to be in the House of Commons. I am more likely to get a bit more pressure put on various ministers if it is in the House of Commons".[180]

196.  Some witnesses made the case for a dedicated committee in the House of Lords. The case for a dedicated committee of the House of Lords is that its more consensual method of dialogue and inquiry would be more suited to such an exercise. For example, Clare Spottiswoode, formerly the Director General of Gas Supply, argued that "Unlike in other spheres, there is no shareholder to hold the office to account, and no electoral process. There are a series of ad hoc select committee investigations and the NAO investigations, but there is no focal point for an institutional ownership of the effectiveness of the office … there is a strong case for a specialist committee to provide this institutional ownership. It would be desirable for this to be a committee of the House of Lords, where members may have a professional background in the relevant areas, and where politics is less of a driver".[181] In that context, it is worth recording that two of the regulators who gave evidence (Lord Currie and Baroness Young of Old Scone) are members of the House; some Peers are also members of the Boards of regulators. The House also offers greater opportunities for continuity of membership. Though membership of a departmental select committee in the Commons is for the lifetime of a Parliament, there is a substantial turnover as members leave to take up other positions, such as a ministerial post or to serve as a parliamentary private secretary. There are less incentives to leave for members of Lords' committees and members normally serve their normal period under the rotation rule. The creation of a Lords' committee on regulation would, it is argued, create a complementary balance to the work of the Commons' select committees.

197.  There is a third possibility, which is to establish a joint committee of both Houses. This would enable skills of members of both Houses to be utilised and would avoid any element of duplication and any proprietary claim that the scrutiny of regulation should rest with a particular House. It would enable the results of scrutiny to be reported directly to both Houses at the same time. There has been a growing tendency to utilise joint committees for the scrutiny of draft bills - as on the Communications Bill, Mental Health Incapacity Bill and the Civil Contingencies Bill - and the work of these committees has generally been seen to be effective. There is also a permanent Joint Committee on Human Rights, which is now well established and operating with expert support. It offers a good example of how a joint committee can draw on the expertise of MPs and peers and exert influence on Government. The UK mobile operators said that there should be in Parliament "some kind of joint committee that looks at that issue in a more single-minded way and in a converged way".[182] For their part, The Electricity Association argued that "All utility regulation is complex and difficult, and, in view of the economic and social significance of these industries, it is important that there should be some focused and co-ordinated mechanism, preferably at parliamentary level, for assessing effectiveness in the round. This is a task that could be taken forward by the new cross-sectoral select committee. It might be possible to achieve this through a select committee for regulatory accountability, dedicated to the purpose and with a specific remit from Parliament to monitor the interface between Government and regulatory practice … We would expect the existing layers of oversight to be rationalised and reduced by this new committee's role".[183] Establishing a joint committee, it could be argued, would enable both Houses to have ownership of the scrutiny of the regulatory state.

198.  We are persuaded of the case for a committee to be created and for it to be a joint committee of both Houses. We believe that a joint committee will avoid the problems identified with a dedicated committee in either House and enable the skills of members of both Houses to be utilised effectively. Setting up such a committee is, we recognise, not problem free. The biggest problem is one of resources. Parliamentarians have limited time and in most cases will not themselves be specialists in regulation. It is essential, though, that the committee is furnished with sufficient expert staff and support to do its job effectively. Given the nature of regulation, this may entail the recruitment of a small number of specialists in the field. Providing such resources will add, though not dramatically, to the cost of Parliament, but the cost will be modest in relation to the likely returns.

199.  A dedicated parliamentary committee should be established to scrutinise the regulatory state.

200.  This should preferably be a joint committee of both Houses and should be given the necessary resources to fulfil its task effectively.

201.  In our view, the functions of the joint committee should include the right to be consulted over any proposal to confer statutory powers on a new regulator, or to add to those of an existing regulator, in good time for its comments to be taken into account during pre-legislative scrutiny. Other functions should include:

  • Having regard to such issues as potential duplication or overlap of regulatory activities, and the clarity of hierarchies of objectives, paying specific attention to the development and maintenance of a 'whole of Government' view of regulation;
  • Identifying and promoting good practice in its role as the parliamentary counterpart of the lead Government department and the Regulatory Impact Unit of the Cabinet Office;
  • Examining whether regulation is guided by the OECD check list and the BRTF principles (as recommended in this report);
  • Satisfying itself that appointment processes for regulators conform to Nolan principles;
  • Monitoring the regularity and scope of RIAs produced by Government and by independent regulators;
  • Focusing on annual reports of regulatory bodies with a view to maintaining the consistency and co-ordination of parliamentary scrutiny.

202.  We see this as complementary to rather than as a substitute for the work of the departmental select committees of Parliament. They would continue to monitor the activities of those regulators within their respective purviews, but we recommend that they consider expanding their terms of reference to include a requirement routinely to consider and react to regulators' annual reports, and monitor the use of resources. These activities would be in addition to the ad hoc inquiries they undertake from time to time.

203.  For parliamentary scrutiny by select committees to be more consistent and co-ordinated, it should be focused around the annual report and the published RIAs, and with specific attention paid to a harmonised whole of Government view of regulation.

Consistent access by the National Audit Office to regulatory bodies

204.  The evidence we have received has shown that regulators come in various corporate shapes and sizes. These include:

205.  We have noted that these have arisen for a variety of reasons, and that the form chosen may affect the relationship with Ministers and the degree of regulatory independence.[184] These structures are more to do with questions of design of an effective regulatory framework than with regulatory accountability. Each should be equally accountable for their regulatory and other associated public functions.

206.  The National Audit Office's traditional role has been to audit and supply Parliament, under privilege, with an opinion on the appropriation accounts. This role focuses on the accountability of the accounting officers, most notably of the ministerial and non-ministerial departments of state. The NAO role has expanded over time to encompass a wider form of audit and inquiry (value for money studies), and since the Sharman report to HM Treasury (2001), non-departmental public bodies that did not fall within the purview of the NAO are progressively being included (albeit that the NAO may still contract out the audit), so that the NAO can follow public money more effectively through the decentralised forms of state organisation ever more in place (even if still more or less centrally controlled).[185] The National Audit has traditionally been excluded from the audit of public corporations and the nationalised industries.

207.  The NAO has developed its work on regulators in recent years - which from the evidence has been generally well-regarded,[186] and we find it anomalous that the NAO does not have unqualified access to all of the economic regulators. The FSA, Ofcom and the CAA differ from the other regulators in that the FSA is a company limited by guarantee and Ofcom and the CAA are public corporations. Nevertheless, the Communications Act 2003 has granted the NAO access to Ofcom which will therefore be subject to its scrutiny. The Financial Services and Markets Act 2000, however, statutorily disbarred the NAO from access, leaving it to the Treasury to decide as and when a review was required, and what form it should take. Whilst it could be said that the CAA is simply an historical anomaly because it was established as a public corporation in a different era - 1972 - with regard to the NAO's role, the position with respect to the FSA has to be considered as a surprising exclusion, given the changed role and expectations of the NAO in relation to the effectiveness of parliamentary scrutiny.

208.  These matters were debated during the Financial Services Bill, but two aspects seem relevant to us now. First, Parliament's role in holding regulators to account needs to be made more effective, and consistent access by the NAO to regulatory bodies is required for that, both in principle and practice. Secondly, the FSA's accountability to those it regulates, and from whom it extracts fees to cover its expenditure, is a complement to, and not a substitute for, the FSA's full accountability to Parliament, which includes exposure to NAO scrutiny. Mr Stephen Timms told us that "There is a rather different arrangement in the case of the CAA, the FSA and Ofcom, which are not subject to NAO scrutiny, and the difference is that they are all funded through fees and charges. So there is no taxpayers' interest to be protected, as there is through the others. That mechanism will also mean that there is a strong voice on the part of those paying the fees for them to be maintained at as low a level as possible. One can see with CAA and I am sure it would be the case with Ofcom as well, that that will be quite an effective mechanism for accountability in terms of keeping costs as low as they can be".[187]

209.  The argument for this different treatment does not seem compelling, given, for example, Ofwat is equally fully funded from licence fees payable by the regulated companies. Consistency of access is the most important argument for reasons of accountability.

210.  The NAO's evidence is compelling, at this time, referring particularly as it does to Lord Sharman's report, Holding to Account, the Review of Audit and Accountability for Central Government (February 2001).[188]

211.  Demands on parliamentary time means that such anomalies might not reasonably be rectified in the immediate future. However, the substantive outcome could be achieved in the interim. The Government should be asked to declare that it is its intention to give the statutory rights of access to the NAO to the CAA and the FSA as and when the next legislative opportunity arises, just as it has in stating that the CAA will be made an independent economic regulator along the lines of GEMA et al.[189] Given this intention, HM Treasury could declare under the current statutory arrangements that it will ask the NAO to advise it when to exercise its right to review the FSA (which it should accept, unless there is good reason, to be announced by the Minister in Parliament), and that having accepted that advice, the NAO should be asked to carry out that review, reporting to Parliament on the outcome in the normal way. The NAO could, as with current arrangements, contract out that review audit (whilst retaining supervisory responsibility) if specialist skills are required. There are precedents for such partnership work, as with NAO work for a number of parliamentary select committees, given that the Treasury is currently working with the DTI and the NAO to investigate the effectiveness of the independent consumer bodies. Another advantage of such an arrangement would be to clearly distinguish the internal control responsibilities of the Treasury in relation to the FSA from the public accountability of the FSA and Treasury Ministers to Parliament for the exercise of regulatory functions.

212.  We recommend therefore that the NAO have access consistently to all regulatory bodies, including the FSA, with a view to monitoring their cost-effectiveness and budgetary control.

A regulatory forum

213.  The commitment of Governments to a whole of Government view of regulation requires political endorsement at the highest level, and the authority to co-ordinate and develop best practice among departments. This requires that the institutional arrangements for design and co-ordination of effective regulation should be held by a central department. This suggests that the Cabinet Office, with its closeness to the Prime Minister's Office, should be given explicit supervisory responsibility, and be properly resourced to achieve that.

214.  The DTI submitted evidence to us that it was responsible for co-ordination of economic regulation. The DTI, however, sponsors particular regulators and there could be conflicts of interest between promoting harmonised models of regulation and arguing for special cases with respect to their interests. The DTI is also responsible for consumer affairs. Clearer separation of roles and responsibilities should both improve the design and practice of regulation by Government and the accountability for that regulation to Parliament.

215.  The BRTF made a recommendation in its recent report on independent regulators that better co-ordination and harmonisation would be achieved if there was a regulatory forum for regulators. The idea is a good one and builds on the joint regulators meetings which have developed, particularly since the Green Paper on regulatory reform.[190] However, we have received evidence that these are less effective than they might be. "A joint economic regulators group also exists. It produces a thin and inadequate annual report. It does not publish agendas or minutes. Government appears to think it should have a role in agreeing best regulatory practice, but it does not discharge this role very effectively, and only a few reports have appeared so far. Water UK believes that recommendations for improving the accountability of this group should be developed by the inquiry".[191]

216.  The BRTF has suggested that the NAO be invited to chair such a forum. We believe that this might confuse roles and compromise the clearly perceived independence of the NAO to scrutinise regulators. There must be no hint of a conflict of interest for the NAO, were the forum to develop in such a way that the NAO was seen to be involved in prospective regulatory actions rather than giving independent effect to accountability by offering its remedies and advice retrospectively. We believe it is more appropriate for the Cabinet Office itself to promote the forum and to provide the necessary leadership role, through the chairmanship. There is also a case for providing an on-going secretariat function to joint regulatory groups. Given regulators are independent within, rather than of, the state, this should not compromise independence but provide an important consistency, and promote harmonisation which might be lacking in the present arrangements.

217.  The role of the National Audit Office in carrying out independent scrutiny of regulatory impact assessments both before and after the event is to be encouraged, and the NAO evidence shows that the Government supports this process of scrutiny. "We have more generally examined the way that central Government assesses new regulatory proposals through the use of regulatory impact assessments. Our report provided policy makers with good practice examples, and a checklist of what assessments should cover. Following a recommendation by the Committee of Public Accounts, the Government have given the National Audit Office an on-going role in examining individual assessments and reporting annually on the lessons to be learned."[192]

218.  We welcome this expansion of the role of the NAO and recommend that the annual review of Regulatory Impact Assessments by the NAO be developed. In order to maintain the strict independence of the NAO and its scrutiny role, we recommend that this should not be undertaken as an agency of the Cabinet Office. These RIAs need to be conducted retrospectively as well as in advance, to ensure that cost-effectiveness is constantly under review.


164   See Philip Norton: 'The United Kingdom: Building the Link between Constituent and MP', in Philip Norton (ed), Parliaments and Citizens in Western Europe (London: Frank Cass, 2002), pp. 19-42, and Philip Norton, 'The United Kingdom: Parliament under Pressure', in Philip Norton (ed), Parliaments and Pressure Groups in Western Europe (London: Frank Cass, 1999), pp. 19-42. Back

165   House of Lords: Official Report (Hansard), Vol. 656, WA 117 [19 January 2004]. 80 per cent of these were received in the House of Commons, 20 per cent in the House of Lords. Back

166   Annex 3 of the DTI written evidence (Vol.II pp385-387) and Annex A of the NAO written evidence (Vol.III pp119-120) supply this information in chronological and tabular form. Back

167   Vol.II p22 Back

168   Q197, Vol.II pp68-69 and Vol.II p62, qq6-8 Back

169   Vol.II p92, para 4 Back

170   Q639, Vol.II p233 Back

171   Vol.III p98, paras 5 and 7 Back

172   Vol.III pp79-81 (paras 3, 4, & 10); QQ601 & 602, Vol.II pp220-221; Q114, Vol.II p45 and Vol.II p37; Vol.II p139, para 25.  Back

173   Q 96, Vol.II p32; and Vol.II p25; Q1110, Vol.II p395 Back

174   Q98, Vol.II p32; Vol.II pp377-378, para 43 Back

175   Q909, Vol.II p321 Back

176   The NAO's work with committees includes seconding NAO staff (one important, and regular, contribution of resources and expertise), providing memoranda on specific issues, and in the case of the Environment, Transport and Regional Affairs Committee, it resulted in an NAO report, The Financial Analysis for the London Underground Public Private Partnerships (HC54 2000-01), arising from the Committee's recommendation in their 14th report of 1999-2000 (Funding of London Underground, HC411). Back

177   See Vol.II p 377, para 42: "Perhaps the most important mechanism by which regulators are held accountable for their performance is through their annual reports… in which they are required to detail their performance and activities in relation to their statutory duties." Back

178   See David Coombes, The Member of Parliament and the Administration (London: George Allen & Unwin, 1966) Back

179   Q551, Vol.II pp193-194  Back

180   Q487 and Q492, Vol.II pp 157-158 Back

181   Vol.II pp139-140, paras 25 and 33 Back

182   Q1169, Vol.II p437 Back

183   Vol.II pp165-166, paras 24, 33 and 34 Back

184   The institutional arrangements are referred to in paragraph 17 of the DTI written evidence (Vol. II p374): "the majority of regulators are non-ministerial government departments, have a separate vote with HM Treasury and are financed by licencees". Back

185   Report by Lord Sharman of Redlynch, Holding to Account - The Review of Audit and Accountability for Central Government (London: HM Treasury, 2001). Back

186   But we have received critical views. See Professor Littlechild's written evidence (Vol.II p25): "As the number and regularity of the NAO reports have increased, they have gone beyond an 'audit' of what has happened, to (eg) an analysis of what kind of price controls might be most appropriate for the future. It is not clear that this is where the NAO's strength lies, or that it pushes forward regulatory thinking. There is also the danger that if the investigation became too frequent and routine it could lead to regulatory offices informally checking policy with NAO officials in the course of implementation in order to prevent criticism in a future report. This could blur accountability". See also Alex Henney, Director, EEE Ltd written evidence (Vol.III p95, paragraph 44): "In my view the NAO reports on Ofgem's activities do not fulfil the objectives of the Act of 'promoting economy, efficiency, and effectiveness'. Perhaps this should not be surprising because we should not expect too much of the civil service investigating the efficiency and effectiveness of the civil service, which is an oxymoron". Back

187   Q1104, Vol.II p394 Back

188   Vol.III p119, paras 14, 15 and 16 Back

189   See A Fair Deal for Consumers: Modernising the Framework of Utility Regulation - response to consultation (London: Department of Trade & Industry, 1998) Back

190   "The regulators themselves have initiated 'joint working' arrangements to promote best practice and discuss issues of common interest - the heads of the regulatory bodies meet bi-monthly, and there are also working level meetings to discuss specific issues" (DTI written evidence: Vol.II p378, para 45) Back

191   Vol.II p106, para 20. Back

192   NAO press notice Regulatory Impact Assessments - the NAO's new role, 2 December 2002. See also Vol.III p118, para 10. Back


 
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