REPORT. (Hansard, 28 February 1862)

§ SIR WILLIAM DUNBAR
brought up the Report of the Committee of Supply.

§ SIR STAFFORD NORTHCOTE
(who 890 had a notice on the paper to call attention to the correspondence between the Admiralty and the Treasury appended to the Estimates) said, that he had wished to call attention to the subject before the House went into Committee on the Navy Estimates, but that owing to accident his notice was too late, and he had then put it on the paper as a matter which he should bring forward when next the House went into Committee on those Estimates. He unexpectedly found, however, that the whole of the Navy Estimates had been gone through in one night. It was an occurrence which had very rarely happened, and, in one respect, it rendered more important what he had to say. The fact of those Estimates passing through in one night really represented the disposition of the House and the country to vote whatever was necessary for the service of the navy, and, upon the whole, to place confidence in the Estimates which were submitted by the Government. But, notwithstanding that readiness and confidence, it was the duty of the House to exercise a fair vigilance over the Votes, and, as far as they could, to control the expenditure. The control might be exercised in two ways. They might reject a Vote in Committee of Supply, which did not often happen, or they might exercise a moral influence over the Government by criticising the Votes submitted to them, which he believed to be the more effectual and the more desirable method. But, in order properly to exercise that control, it was of importance that the details of expenditure should be presented in a shape which hon. Members could thoroughly understand; that they should know well what they were voting, and, after a reasonable time had elapsed, that they should be informed how the money had been expended, so that they might see whether it had been expended upon the objects for which it had been voted. It appeared from the correspondence appended to the Estimates, that the system which prevailed of transferring money from one Vote to another defeated that control on the part of the House, and prevented hon. Members knowing how the money voted for a particular service was applied. That was particularly the case with regard to Vote 11. The House was aware that there were two kinds of transfer, a transfer of a surplus from one Vote to another Vote on which there was a deficiency, and a transfer within a particular Vote from one 891 detail to another detail. It was to the latter class of transfers that he now wished to call attention. The provisions of the Appropriation Act were substantially, that the money voted for each department should be appropriated to each "separate service;" and that, if the exigencies of the public service made it requisite to alter the proportions assigned to each "separate service," the Admiralty, with the consent of the Treasury, might make the alteration. There was some difference of opinion as to what was meant by the term "separate service," and as to whether it was necessary for the Admiralty to consult the Treasury when a transfer was made from one detail in Vote 11 or Vote 12 to another detail in the same Vote, or whether it was only necessary when they proceeded to transfer money from Vote 11 to Vote 12. Whatever might be the strict construction of the Appropriation Act, the practice was for the Admiralty to consult the Treasury before making any transfer even within the same Vote; and he believed that practice was entirely within the spirit of the Act, and conformable to the wishes of the House. There were eight cases of transfer mentioned in the correspondence appended to the Estimates. Three of them related to the year 1860–1, and the others to the year 1861–2. With regard to the first three, he would only remark that it was a pity such transfers should take place by the authority of the Treasury at the suggestion of the Admiralty at a time when Parliament was sitting. They all took place in the month of March, 1861, when, as Parliament was sitting, the most natural course would seem to have been to present supplementary Estimates in case an excess had arisen. At the same time, as those matters were brought before the Treasury on the last day of the financial year, there might not have been time to present supplementary Estimates. With regard, however, to the control which the House might suppose the Treasury exercised in the matter of these transfers, it appeared to be extremely, feeble, because he found the Treasury using the terms "We feel we have no alternative" when giving their consent to the course proposed by the Admiralty. It would hardly be thought that this sort of control was worth much. He would not, however, quarrel with the Government on those first three instances, but he must direct attention to the fourth 892 case. On the 11th of June the Admiralty wrote to the Treasury as follows:— Sir,—I am commanded by my Lords Commissioners of the Admiralty to acquaint you, for the information of the Lords Commissioners of the Treasury, that my Lords have directed the sum of £5,000, for providing an iron caisson for Sheerness Dockyard, to be charged to the aggregate Vote 11, postponing other services, so as not to create an excess. And to that the Treasury signified their assent. This was a matter hardly within the spirit of the Appropriation Act. The Act said that the transfer should take place if it were absolutely necessary. Was this transfer absolutely necessary? The letter was written on the 11th of June and on the 6th of June, five days before, the Vote was passed. On the 6th of June the Admiralty asked Parliament to vote sums for new works, detailed in No. 11. They did not ask for any money for an iron caisson at Sheerness, but five days afterwards they went to the Treasury and said they were going to spend £5,000 in that manner, postponing other services. Two questions were raised. Why did not the Admiralty put the iron caisson into the Vote? And why did they ask for Votes for other services which five days afterwards they knew they could postpone? It led to the suspicion that Vote 11 was a Vote which could be easily cut down without detriment to the public service; and when they knew what happened with Vote 11, the suspicion was strengthened. Every year there was an excess upon that Vote, and sometimes a considerable one. In 1858–9 there was a surplus of £116,000, in the next year a surplus of £105,000, and in the year afterwards a surplus of £52,000. The House voted on an average under that head £90,000 a year more than was Expended. It might be said that the Admiralty did not know how much they were going to spend, and wished to cover what they did by sufficient authority; but, although they were not bound to spend what was voted, it led to practical inconvenience. There was always a surplus which could be applied under the law to other Votes, and therefore when, for instance, too little was taken for the Admiralty Office, the surplus of the Votes for new works supplied money for the Admiralty Office which was not voted. There was no real saving on the Vote for new works, because if £100,000 were voted for the purpose and only £50,000 expended, half the work had to be done afterwards, and the £50,000 surplus in one year had to he 893 voted over again in the next. Upon the next case he would only point out that the Treasury had challenged what the Admiralty had done, and that the Admiralty, in excuse, stated that an oversight had been committed. That was curious and rather unsatisfactory, but the correspondence stated that measures had been taken to prevent such errors in future, so he would say no more about it. In the next case that appeared in the correspondence the Treasury had given a very grudging assent to the Admiralty proposal. Now he did not think it desirable or to the advantage of the public service, to continue a system which had produced such correspondence as had taken place between the Treasury and the Admiralty. Apparently the two departments were brought into uncomfortable relations, and at the same time very little was gained by the control which the Treasury was expected to exercise. In the next case, that of the Achilles, where the additional expenditure was required in the month of September, it appeared to him that the spirit of the Act had been entirely carried out. But then came the last instance—that of the new Marine Infirmary at Woolwich. He believed the first Vote for that infirmary was taken as far back as 1856, and it was then estimated by the Admiralty that the sum of £42,000 would be required for the whole work, and accordingly that sum was inserted in the Estimates. For a time the Admiralty went on taking various sums, until at last it was discovered that the amount first proposed was not sufficient, and in the year before last the estimate given was £65,300, and there was a note appended stating that the original Estimate had been made before the site was purchased. Well, in the year 1861–2 the case of the Estimate stood thus:—There had been voted £52,250, there had been expended up to the 31st of December previous £58,206, and £5,000 was asked for the coming year, leaving to complete the work—nil. So that though Parliament had voted only £52,000, more than £58,000 had been expended, and £5,000 more was asked for; which, however, the House was led to suppose would be sufficient to complete the work The £5,000, of course, was voted, thus making the total amount voted £57,250. Now, it appeared from the correspondence which had taken place between the Admiralty and the Treasury that, though £57,250 was the amount voted, the total amount expended was 894 £73,294, making a difference of £16,000 between the sum voted and the amount which had been spent. That was an unsatisfactory state of things, and one which the House would naturally be anxious to look into. The House would also be naturally anxious to criticise the fact, that whereas the infirmary was originally expected to cost only £42,000, and the revised Estimate reached the sum of £65,000, the building had really cost so much more. But the effect of this system of transfers was, that this criticism could not take place, because the Committee had not the opportunity of knowing exactly what had been done with the money until nearly two years afterwards. Nothing within the Estimate of 1861–2 would show the real state of things at the time that the last Vote was taken. Now, the effect of framing the Votes in that manner was to conceal from the House the real state of the case, even though it was within the knowledge of the Admiralty; for when they came to explain the matter, they admitted (in the letter page 100) that some of the items of excess had been ascertained before the Estimate for the current year was framed. They admitted in the last page that the whole expenditure up to the 31st of March, 1861, had been £61,798, and yet they proposed to go on with a Vote of only £57,250, because, they said, "there was no objection to charging the difference between the amount expended up to that date, and the sums voted to the same date, to the aggregate vote, on which there was a surplus." They thought they had a perfect right to make up the difference between what had been spent and what had been voted out of the aggregate voted for other services in the year before, which, in fact, would entirely conceal the real circumstances from the House. He brought forward this matter in no hostile spirit, and he was quite sure that if they went more fully into the matter, they would see that the effect of this system was really to conceal from the House the total sum which it voted for small items, and so to deprive the House of that control which it ought to exercise over those Votes. As long as that course was continued, the same thing must happen. What he wished to suggest for the consideration of the House and the Government was, whether it would not be possible to put an end to the system of transfer altogether. He should like to see something like a Treasury chest fund, 895 or what had been proposed for the civil contingency fund, brought into play in this matter. He meant, that the House should vote exactly what the Government asked them to vote, and that what had been demanded should be the amount which the Government were entitled to expend; but that there should be a fund of a certain fixed amount upon which no final payments should be charged; and if it were necessary to expend more than the sum asked in any particular Vote, that the Admiralty, or other department, with the consent of the Treasury, should take the difference out of that fund by way of advance, to be repaid by a Vote of the House. But it should be a general contingency fund; and if, for instance, it were necessary, as in the case of the Achilles, that some money which had not been voted should be expended, the Admiralty should get an advance of £5,000 or £10,000, or as much as they wanted, out of that fund; and at the close of the year there should be a Vote taken in Parliament to repay to the contingency fund the sum that had been taken from it for the object required. The effect of that arrangement would be, that the House would see exactly what had been taken from the fund. If the Government wished to present to the House the real state of expenditure, he believed they could only do it at the moment they were asking for a vote of money. If it were done afterwards, it was hardly to be supposed that the majority of hon. Members would care to inquire into the matter.

§ MR. WHITBREAD
said, that he did not presume to offer any opinion on the suggestion made by the hon. Baronet as to the establishment of a General Contingency fund, because the question involved very grave considerations, and could not be satisfactorily disposed of by any one on the spur of the moment. The correspondence as to the bar at Portsmouth should be read in connection with the Estimates and correspondence of the previous year. The expenditure was unavoidable; without it the bar would have been left in an incomplete state, and the money previously spent thrown away. With respect to the course pursued by the Admiralty he observed that it was not a new one; that the Admiralty had the power to apply sums from one item under Vote No. 11 to another item under that Vote, so long as the total Estimate in the first column was not exceeded; but they were bound to ob- 896 tain the sanction of the Treasury whenever any application of money would cause an excess upon that total Estimate, or whenever any new works, not already agreed to by Parliament, were undertaken. When the Estimate of £65,000 for the infirmary at Woolwich was presented, it was supposed that that sum would cover the whole expense; but, as was well known, the construction of barracks and hospitals had undergone careful consideration, and had been reported on by several Committees. The consequence was that vast improvements had taken place in their interior fittings, lighting, and ventilation; and he thought that the Admiralty would not have been held free from blame if they had not endeavoured from time to time to render the infirmary as perfect as possible. That was the real cause of the unforeseen excess on that item; and the check which was given by the publication of the correspondence on the point at the end of the Estimates, appeared to be all that the House of Commons could, under the circumstances, desire. Though the construction of the caisson at Sheerness dockyard came under the head of a new work not sanctioned by Parliament, yet he must tell the House that so long back as in the year 1856–7, a sum was taken in the Votes for the construction of that caisson, but was not expended; and when the last year's Estimates were prepared, the real necessity for the caisson was not then foreseen. However, in June, very urgent representations were made from Sheerness yard to the effect that the existing caisson was in a very bad state, and that the new caisson would make the dock available for receiving ships of quite another class. It appeared to be one of those cases of emergency which had evidently been contemplated by the Act of Parliament, and the expenditure was really in accordance with the spirit of a Vote of that House on a former occasion. The suggestion made by the hon. Baronet for an alteration of the existing practice, must be left for future consideration.

§ SIR FRANCIS BARING
said, that the subject was one of great importance, and it was extremely desirable that hon. Members should turn their attention to the correspondence and returns to which allusion had been made, which constituted their only check upon the administration. On a cursory examination of that correspondence he thought that there were many points 897 requiring explanation from the departments; but he was afraid it was hardly possible to strengthen the existing check in respect to these outlays. There must arise cases of sudden emergency obliging the departments to expend for the public service money for items which did not appear under the different Votes, and all that should be required under these circumstances was, that if that House were sitting at the time, and if there was opportunity for it, a Vote should be taken; but if that House was not sitting, then nothing further could be demanded than that the circumstances should be explained to the House as soon as possible. It should be recollected that these outlays were not incurred on the mere decision of the Admiralty, but that the Treasury was interposed as a check upon the demands of the Admiralty. According to the existing practice, these matters were brought to the knowledge of the House by the publication of the correspondence, and hon. Members had the opportunity of canvassing any breach of the strict rules relating to the appropriation of public money. Neither the Education Vote nor any other civil service Vote had half as much check upon it as the Votes of the great services, the army and navy. With respect to the alteration suggested, that was too large a subject to enter upon at present, but he thought it would be more difficult to carry out than the hon. Baronet supposed. Altogether, although he was afraid that the arrangement suggested by the hon. Baronet might not prove practicable, it was of great importance that a proper check on the appropriation of monies voted by Parliament should be secured.