§ Mr. Speaker
I must announce to the House that I have not been able to select the amendment on the Order Paper in the names of the hon. Members for Nottingham, North (Mr. Allen) and for Norwich, South (Mr. Garrett); but the substance of the amendment may be canvassed during the course of a speech if an hon. Member is successful in catching the eye of the Chair.
§ Mr. Robert Sheldon (Ashton-under-Lyne)
I beg to move,That this House takes note of the 15th and 19th to 52nd Reports from the Committee of Public Accounts of Session 1985–86, of the 1st to 19th Reports of Session 1986–87 and of the Treasury Minutes on those Reports (Cmnd. 9846, 9859, 9917 and 9924, and Cm. 138, 177, 224 and 236), with particular reference to the following Reports of Session 1985–86—
This is an annual debate; the last one was held on 3 July last year, when we had 30 reports to consider. Before that, on 24 October 1985, we had 51 reports; and on 20 March 1984, 46. This time, over a slightly longer period, we have a record 54 reports and eight Government replies. As on the past two occasions, we have chosen to highlight five reports, although many others may be mentioned in the course of the debate.
- Nineteenth, Expenditure on motorways and trunk roads;
- Twenty-fifth, Prison building programmes;
- Forty-fourth, Preventive medicine;
- Forty-fifth, Financial control and accountability of the Metropolitan Police;
- Fiftieth, Vehicle Excise Duty evasion and enforcement.
My first pleasant duty is to thank the Members of the Committee. They do dedicated work. There is a terrific amount of reading to be done, and I am delighted that the Committee regards its work with enthusiasm and that it is dedicated to the large amount of reading that is involved. Four of the members of the Committee retired or were defeated at the last general election, and we have given our thanks to them. We also had on the Committee for part of the time covered by the debate my hon. Friend the Member for Wrexham (Dr. Marek) and the hon. Member for Horsham (Sir P. Hordern), who was recently appointed Chairman of the Public Accounts Commission; and we welcomed new Members—my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis), the hon. Member for Eastbourne (Mr. Gow), my hon. Friend the Member for Redcar (Miss Mowlam), the hon. Member for Hertfordshire, South-West (Mr. Page), the hon. Member for Beaconsfield (Mr. Smith) and, for a short stay, my hon. Friend the Member for Norwich, South (Mr. Garrett), who was appointed in July but discharged last Friday because of his new post on the Opposition Front Bench. My hon. Friend the Member for Norwich, South was instrumental in bringing about so many of these changes, as it was he who did the research into the last century and discovered that the Comptroller and Auditor General had been a proper Officer of the House, responsible only to this House. That was what prompted the Norman St. John-Stevas Bill — the National Audit Act 1983—which reinstated the position as of before. As I said, my hon. Friend has been appointed to an Opposition Front Bench post, and, for the same reason, 1141 we are losing my hon. Friends the Members for Normanton (Mr. O'Brien) and for Rhondda (Mr. Rogers).
The great thing about the Committee's work is that its reports are unanimous. That is not to say that we have been emasculated in a party political sense. We remain politicians, deeply conscious of our allegiance to our parties and of the need and importance of party politics. However, we also recognise that we cannot allow the taxpayer to get anything less than full value for the money that is spent on his behalf. Our very unanimity transcends problems of party allegiance, and they do not appear in the work of the Committee. So, whenever our reports are discussed and our recommendations are noted, we always say that the most important thing is value for money, and that always remains our objective.
The Financial Secretary to the Treasury is a member of the Committee and is always welcome to attend. Traditionally, however, he comes only at the beginning of the Session, and rarely thereafter.
The National Audit Office and the Committee form a partnership. The Committee depends on the investigations undertaken by the National Audit Office, but we go beyond them and report to Parliament. Every year, we discuss the programme of the National Audit Office in the Committee; we discuss matters that concern and interest us and we make suggestions about matters that deserve further examination.
The creation of the National Audit Office in 1983 was of enormous importance. It has changed the whole basis of the work of the Comptroller and Auditor General and his team. Of course, the distinguished Comptroller and Auditor General appointed before that time—in 1982— was Sir Gordon Downey, who is due to retire at the end of this year. His career was spent mainly in the Treasury, and at one time he was deputy head of the central policy review staff. So he covered the six years that included the transition from the Exchequer and Audit Department to the new National Audit Office, which was brought in by the National Audit Act 1983. He has been a distinguished civil servant and has become an even more distinguished Comptroller and Auditor General. He is an Officer of the House, and the House feels enormous gratitude for the work that he has done. The Public Accounts Committee feels deeply indebted to him for the way in which he carries out his work and has effected the transition. Instead of the bare, minimal notes to the appropriation accounts, we now have these reports which go into the matters under discussion thoroughly and enable us to understand the activity of the Department with which we are concerned.
The National Audit Office has substantially increased the number of reports dealing with value for money, and we expect that about half of its reports in the future will deal with that subject, thus ensuring that all areas of central Government are investigated regularly. Of course, there are two aspects to the work of the National Audit Office. We want value for money but, even more important, there is a need to ensure that when Parliament votes certain moneys they go to the persons to whom Parliament intends they should go and are spent for the purposes that Parliament intends. That is the crucial aspect that we have to control; nothing comes before it. We know full well, by reference to many other countries, that once people become involved in fraud and corruption, 1142 and they take hold in a country, department, activity or office, it is extremely difficult — sometimes almost impossible—to root them out.
We take our responsibilities seriously. We know full well that, having satisfied ourselves as far as we can that things are going according to principles that we lay down, other matters pertaining to value for money are of great importance.
§ Mr. Michael Latham (Rutland and Melton)
I pay tribute to the right hon. Gentleman's outstanding work. Will he confirm that it should be well understood outside the House that the report of the Comptroller and Auditor General is his report, and that that of the Public Accounts Committee is ours — and that they are by no means always the same?
§ Mr. Sheldon
I fully accept that; I was going to deal with the important difference between those reports. One is the investigation which takes place within the Department or activity concerned, and which lays out the facts, as they have been agreed, between the National Audit Office and the Department or organisation that it is investigating. Our report examines the role of the people concerned and makes our judgments upon them.
We have one big advantage that many people outside the House do not fully appreciate. It is that we are able not only to examine but to make recommendations, If those recommendations are not adhered to, not only do we have a debate such as this in the House, but we can ask civil servants or accounting officers to return to the Committee and give us their reasons why they have not carried out certain matters. The important aspect of this is well known in the Civil Service. It is that those concerned know full well that their reputation as responsible, active and fully adequate civil servants depends to a considerable extent upon the way in which they follow the wishes of the Public Accounts Committee about the way in which they should dispose of taxpayers' money. It is right that they should be influenced by our judgment on important matters like this.
The one thing that we know about the Civil Service is that it has a superb grapevine and that the information available to one Department rapidly spreads throughout the service. The abilities of the people who come before us and the way in which they have accounted for public money is soon understood and known throughout the Civil Service.
The National Audit Office has produced improved financial management systems in Government. It now has a more professional staff. Many years ago when I was a new member on the Public Accounts Committee the paucity, almost the absence, of accountants in the old Exchequer and Audit Department was astonishing. Nowadays most of the people responsible for accounts have professional qualifications. Of course, that brings problems because they are much more attracted to the private sector, to the private accountancy firms. However, the fact that so many are moving from the National Audit Office to private firms—although that brings problems of wastage and extra recruitment — is at least an indication that we have people who are respected and acknowledged throughout the accountancy profession.
The National Audit Office has moved to new accommodation. It was a good purchase that was well carried out, the accommodation is well used, and it has 1143 brought most of the London National Audit Officer staff together. It is most important that the National Audit Office is independent of the Civil Service because, of course, it is now responsible to the House. We must understand the nature of that relationship. Matters such as recruitment and pay are dealt with by the National Audit Office supervised by the Public Accounts Commission and advice is tendered by the Public Accounts Committee. Therefore, it has an independent role and it is right that that should be so, given that it examines the work of Government and the expenditure of money by Government.
The new Comptroller and Auditor General is soon to be appointed by a motion for addressing the House, to be moved by the Prime Minister with my agreement as Chairman of the Public Accounts Committee. I could hardly finish this part of my speech without thanking the Clerk to the Committee, Simon Patrick, and the previous clerk, John Rose.
The Northern Ireland Audit Office is also part of our responsibility. Its expenditure is much less, but it faces all the problems of the United Kingdom Departments together with other problems that are unique to the Province. Denis Calvert, the Comptroller and Auditor-General for Northern Ireland, and his staff do a valuable job. Staff wastage was high, but has now been reduced and performance-related pay has been introduced. I should like to speak about the assistance of the Treasury Officers of Account. Clifford Judd has retired and has been replaced by John Beastall. In Northern Ireland Brian Lyttle has been replaced by Mr. Small. I am grateful for their help.
Now perhaps I can deal with the reports. I frequently consider the number of reports that we have produced to the House. In 1985–86, there were 52 and in 1986–87 there were 19 because of the election. Of course, we have the reports that are before the House today. We produce a substantial number of reports, but it is important that the National Audit Office should itself examine fairly frequently areas of Government expenditure in order to ensure continuity and so that the Government Departments, accounting officers and people responsible for expenditure know full well that at any time the National Audit Office can make its inquiries.
If we dealt with a few reports at greater length, I am not sure how much better those reports would be. There would certainly be a feeling among those responsible for the spending of public money that the next time round for reports was some years hence, and the incentive to improve and maintain the better sytems might not be the same. The value-for-money reports, which are expected to reach 50 a year by 1992, will mean an extra weight of work on the Committee. Given that extra number of reports, the Committee will sometimes follow up the less important ones through written rather than oral questions. I am grateful for the dedication of members of the Committee for the way in which they assiduously read the mountain of papers, and for the way in which the questioning proceeds.
Every year we hope and claim that, some time in the future, we shall be able to give the National Audit Office the right to go into the accounts of the nationalised industries and to be present in those industries. Unfortunately, that was not in the legislation in 1983, but 1144 at some future date I think that the House will realise that it is important so to proceed to be able to follow public money. It should not be necessary to follow it into every area, and carry out investigations, but it is certainly important to follow it into some of the more important areas. The Public Accounts Committee has the understanding, the ability and the financial and commercial expertise that will be valuable for such examinations.
Anybody who travels abroad knows full well the reputation of our Parliament and of our Civil Service. We play a part in making one accountable to the other. We make our highly regarded Civil Service accountable to the House. One feature of the past two or three years has been the large number of people coming from overseas to look at the work of the Public Accounts Committee. It is becoming almost embarrassing because we have to arrange for colleagues to deal with the number of inquiries and visitors who at times arrive almost weekly and who want to know how we are now carrying out our work. Our international standing is a source of considerable satisfaction.
We are responsible for examining the expenditure of a large part of the £140 billion to £150 billion of public money. As I said, we carry out certification work to make sure that the money goes for the purposes that Parliament intends and to the people that Parliament intends. The value-for-money side of our activities has three elements — economy, efficiency and effectiveness. Economy means paying no more than is required for the goods or services that are needed. Efficiency means getting the best results for the money that is expended, even though at times that may mean more money if that will give a higher output or better results. Effectiveness means the best way of achieving the aims of policy. It is not our duty to question the policies of the Government and that is how we maintain our unanimity. However, we are interested and anxious to ensure that the best ways of achieving those policies are undertaken.
§ Mr. D. N. Campbell-Savours (Workington)
My right hon. Friend speaks about effectiveness. Does he accept that on occasions many political matters arise when we examine the effectiveness of the use of public money? Is it fair to say that in our reports we sometimes have to reflect that by perhaps not being as vigorous as we might otherwise be?
§ Mr. Sheldon
The Committee consists of hon. Members who understand the matters well. We know that there are areas into which we cannot go because they involve the province of Government. The Government have been elected and have the right, subject to the will of the House, to carry out their policies. Our task is to ensure that they do so effectively. In the end it is simpler than might be thought. My colleagues will agree that when anyone appears before the Committee we ask for a simple statement of objectives. A Department may have in mind the spending of a certain sum of money and we ask it to state its objectives clearly and in numerical terms where possible. Then we ask it to monitor progress.
Objectives can, and do, change in the light of changed circumstances. A Department should know at a certain stage how far it has got and what it has achieved for its expenditure. At the end of the day—maybe a year, two years or even five years later — we will ask what the 1145 Department has achieved. We want to be able to compare objectives with achievements. At the start of a programme, the Committee says that a Department should know exactly where it stands and what it hopes to produce at the end. It may seem elementary to compare expectation with performance. It should be standard practice to quantify where possible and to set phased dates for examination. That is easy but it is often missed.
We have had some terrible examples where that has not happened, but fortunately nothing as horrendous as occurred a couple of years ago with premature retirement. I am glad that I have not had to update that example. Hon. Members may recall that there were premature retirements in the National Health Service. The Government decided that there were too many administrators and rightly offered incentives to administrators to leave the service. Of course, they paid them certain sums of money. But there was no assessment of how many would leave, how much it would cost and in what regions people would leave. As a result, in the north-east a few left and in the west large numbers left. At the end the Government did not know how much had been spent, how many had gone and, worst of all, how many had returned. I hope I shall never need to update that example. It is generally known now that we demand information in advance and that it is upon that information that Departments may proceed.
The Committee has drawn particular attention to five reports which we thought would be of general interest. Certain aspects of other reports are important but the Committee felt that we should concentrate on these five.
The 19th report, 1985–86, deals with expenditure on motorways and trunk roads. The Department of Transport spends £800 million a year on motorways; local authorities spend £1,500 million on other roads. Those who drive round the country—I suppose there are not many who drive much more than we do — will know that the coning of roads and motorways is a major scandal. We may sit in our cars for up to an hour on occasions. I am not talking about the adequacy of roads. There are constraints on expenditure but traffic jams have a cost in lives as well as in time. Expenditure on roads has not been efficient or effective.
In paragraph 17, we say that the Department of Transportaccepted that comparisons between estimated and actual traffic flows were an important factor in cost benefit analysis and back-checking the relevant assumptions and results. They admitted that they had not carried out the subsequent checks they should have done".That is of enormous importance. Unless a Department compares what it hoped to achieve with the result it will not learn much. We thought that the failure to carry out back checking was wrong.
We were pleased about the suggestion of lane rentals, whereby contractors responsible for road maintenance or repair should pay a certain rental. We hope that the Financial Secretary can give us further information. It seemed to be a useful way of ensuring that the work was carried out efficiently and economically.
In paragraph 23, we said:We consider it most unsatisfactory that maintenance of roads has been starved of funds for many years. …We consider it imperative that they should maintain roads in good repair and avoid the need for premature and extremely expensive reconstruction of either motorways or trunk roads due to lack of timely maintenance.1146 Often, because of failure to maintain roads and to spend a little money earlier, much more expenditure on repairs has to be undertaken subsequently.
In paragraph 24, we say:Alterations to motorways after construction carry a disproportionate cost—the later addition of crash barriers, the later addition of lighting, the widening of former two lane motorways to three lane, all carry additional costs out of proportion to the cost of including these facilities originally.The inadequate roads that result from lack of forethought have disastrous effects through delays and loss of life. Too many motorways have been inadequately designed and poorly built, and protracted repairs take months or even years.
The 25th report deals with the prison building programme. In 1979 the May committee suggested 3,400 refurbished places in 16 prisons, costing about £360 million. The aim was to match places with the prison population by the end of the decade. That was a clear objective which we welcomed and we look forward to its implementation in due course. In the report, we say thatthe challenging target set in 1983 has now become an even tougher one.That was matching places with prison population by the end of the decade. We continued:In view of the Home Office's failure to build the types of prisons most urgently required and in the right locations, the difficulties and delays suffered with particular projects — including cases where buildings have been kept out of use even after completion — and the uncertainties caused by the difficulty in projecting the size of the prison population, we believe achievement of the target is in doubt.A year or so after that report, we think that it is even more in doubt. In paragraph 29, we said that after the end of the decade there wouldstill be overcrowding in some prisons, and that large amounts of substandard accommodation will remain in use.In paragraph 30, we said:It gives us great cause for concern that in 1991"—the end of this programme—there will still be just under 20,000 cells without integral sanitation.It is deplorable that after a programme of expenditure, development and refurbishment almost 20,000 cells are without integral sanitation. The original programme was not as well thought out as it ought to have been.
The 44th report deals with preventive medicine, the cost of which is reckoned to be some £600 million. That figure was suggested by research into expenditure on preventive medicine by the National Health Service. The Committee dealt with two aspects of preventive medicine, cervical cancer and other preventable diseases such as rubella, measles and whooping cough. The failure to undertake the call and recall system is inadequate. I quote from paragraph 23, where the Committee noted the Department'sfrank admission as to why so little progress has been made in reducing the number of deaths from cervical cancer.Bearing in mind that the programme was introduced almost 20 years ago, and the recommendations of the committee for gynaecological cytology between 1979 and 1981 regarding call and recall arrangements, we say:it is deplorable in our view that it has taken so long to institute comprehensive arrangements for an effective screening programme.This was brought home to me on Friday of last week when I heard of one of my constituents who had an examination in a hospital outside my area and something was found to be wrong, but she was not recalled. She has only now found out that she has cancer, and she is now in a hospital 1147 in my constituency. That is awful, because that person felt a confidence that was completely unwarranted, which is much worse than not having had the test at all. At least if she had not had the test she would have been on the lookout for signs and symptoms to a greater degree than she was.
The past 20 years have been spent badly, in that essential work had not been carried out. I am pleased to note that this has improved in the past year and I understand that it will be put right by the summer of next year, but I wait to hear what the Financial Secretary might say about that.
The 45th report concerns the Metropolitan police. The investigation was unusual because, if we did not have the National Audit Office, the matter might not have been investigated in the same way. It was valuable to undertake the questioning of the Receiver, who is responsible for expenditure by the Metropolitan police, Mr. Alec Gordon-Brown. We note that:accountability to Parliament operates primarily through the Home Office, with little direct accountability by the Met P.We point out that the quality and form of information provided to Parliament on the efficiency, cost-effectiveness and performance of the Metropolitan police is clearly unsatisfactory.
Paragraph 29 refers to the overtime worked. We all know that the Metropolitan police have to undertake much overtime when emergencies and other activities demand, but it is difficult to ensure that overtime is worked only when it is essential and efficient to do so. Overtime is currently costing the Metropolitan police some £50 million a year and there is little assurance that it is under very close control. After questioning Mr. Alec Gordon-Brown, it was the Committee's unanimous view that his responses were far from satisfactory. The report continues:so the potential savings to be achieved through more positive and effective systems of control could well be substantial. We therefore welcome the current and proposed research into how, why and when overtime is worked.We know that when emergencies occur these matters are not considered, as they might be at a more relaxed time. Nevertheless, taking those matters into account, the Committee's view was that this is disturbing. Finally, we say that we are concerned over inadequacies and delays in the Metropolitan police manpower reviews and ask for an improvement of the review arrangements to provide the necessary justification for the existing and proposed manpower levels of both police and civil staff. One would have thought that this should have been done, and we regret that it was not.
The 50th report deals with vehicle excise duty evasion, which was estimated to cost about £100 million in 1985–86. Over the past few years, despite increased efforts, no significant reduction has been made. We know that it is difficult to trace owners. Of over 1 million cases notified, only 30 per cent, were prosecuted. This is very unsatisfactory, but we understand the difficulties. More than two thirds of those people caught committing the offence of not having a vehicle excise duty licence are not prosecuted, and the fines imposed on those who go to court are ludicrous. The average fine is £47 and the licence costs £100. The maximum fine is £500. We do not know what percentage of those who commit the offence are caught, but of the people who are caught their chances of 1148 being prosecuted are only 30 per cent., and the averge fine is only £47. Ministers would like to see the fines increased, but it is up to the courts to decide those matters. We can only send out a signal to the courts that we wish to see increased fines imposed on those convicted.
We endorse the Department's view on this matter and ask that our concern be brought to the attention of the Home Office and the Magistrates' Association. Such widespread evasion at such little risk must not continue. Those who undertake the running of a car, with the attendant high costs and responsibilities of its ownership and running, must be prepared to pay the vehicle excise duty.
The 26th report deals with fraud and corruption. The Committee takes a serious view of matters which involve losses. In 1984–85 the Home Office wrote off losses of £17.3 million and bad debts of £1 million. In 1983 allegations were made about the dealings of the directorate of prison industries and farms with one particular company which was subsequently the cause of a loss of £15 million, which is noted in the accounts. That concerned work undertaken by those serving sentences of imprisonment, producing toys, among other things. As a result, six officials were suspended from duty and charges of corruption were made against three of them, although they were subsequently acquitted. Two of the suspended officials retired early and the other four resigned.
Nevertheless, the directorate accepted that there had been too close a relationship between some members of its staff and some of the contractors. It told us that it was taking rigorous action to strengthen its defences against fraud and corruption by every possible means and had made that clear to staff by training, instruction and example. That is of great importance.
Leaving aside allegations of fraud and corruption, of which the defendants were acquitted by the courts, there has clearly been incompetence and serious failures to meet necessary standards in performance amounting to substantial negligence in a number of cases. In such circumstances, to be able to resign without financial penalty, or to retire early and to receive enhancement of pension entitlement, seems indefensible and we expressed our strong disapproval of that.
As I said, in our report we take a most serious view of even a suspicion of fraud and corruption in the conduct of public business. The lack of proper supervision and control makes it more difficult to establish the facts in those cases where fraud and corruption were suspected, but not proved. I hope that it will stand as a statement of the view of the Public Accounts Committee when we say:We will always expect, and indeed demand, the most scrupulous standards of behaviour from all public servants; and we welcome the action taken by the Home Office to ensure in future the highest standards of conduct by their staff in relations with contractors.I do not need to go into Lear Fan in great detail because it deals with a number of the problems that we had with the De Lorean case. In fact, it almost overlapped it. The question really is — it is an important one for the Administration — how we deal with high-risk areas of activity. Governments cannot be immune from dealing with these high-risk areas, but, because of the importance of maintaining the position of public money and our concern quite naturally for the expenditure of that money, we need to have rather different rules from those in the private sector.
1149 The private sector can taken a number of risks. It gains some and loses some. If it gains more than it loses, or substantially more than it loses, that is acceptable, but losses must be justified much more fully and accurately when dealing with public money and we make that point strongly.
In this case £56 million was lost. Whereas with De Lorean there were only 50 days of appraisal, in Lear Fan there were 18 months of appraisal. Of course, there was the matter of job creation in Northern Ireland—something that all of us would wish to see. The quality of management is a major cause of failure. It is important that the House realises the importance of the Downey principles, one of the most important of which is that one does not give money and then more money when it is needed, or even examine the matter when the initial tranche runs out, to see if more is needed. Certain phases must be set in advance. One says when the matter should be reviewed and that no more money will be available until a certain period. So often, by the time more money has been requested and the latest report and accounts have been produced and analysed, the situation has moved on. Therefore, one is never given the exact information at the time a decision has to be made. The only way to proceed is by the phases which form an important part of the Downey principles.
Yet again, we had the role of nominee directors. Our report on nominee directors has been debated in the House. We showed how they need to ensure that they undertake their responsibilities. It is not the sort of job that so many people thought it was several years ago. It is a responsible job, acting on behalf of the Government or the agency. We draw those conclusions again.
The cost of legal aid, which is dealt with in the 32nd report, is not cash limited. In 1979–80 it cost Britain £87 million to provide legal aid. That had risen to £263 million in 1984–85. The Law Society administers legal aid on behalf of the Lord Chancellor's Department. We were assured that there was no conflict of interest here, but we were not satisfied. We say:It is clearly important that an adequate separation of duties should be maintained to ensure that those with specific responsibility for the administration of legal aid should remain separate from those whose role it is to negotiate the remuneration of the profession.That seems obvious. We are dealing with a professional body of high standards, but when one takes into account the opportunities for fraud, it is clearly important that those with responsibility for the administration of the expenditure of money should be separate from those who negotiate remuneration. We had no doubt about the high standing of the people who came before us, but, clearly, there cannot be, and must not continue to be, this conflict of interest. Of course, there was no question of those responsible operating with other than the highest principles, but the general view still remained.
We go on to say:We were astonished that neither the Lord Chancellor's Department"—we do not use such words frequently; the Public Accounts Committee is noted for its restrained use of language, so such florid language is used only when we are picking out particular examples—nor the Law Society had the management information to identify precisely the causes of the increase in legal aid expenditure over the years …There must be a serious doubt 1150 as to whether all abuse of legal aid is being identified and reported; the Law Society must ensure that there are effective checksWe found that only three cases of abuse had been reported. Of course it is an honourable profession. We asked Sir Derek Oulton, the accounting officer, how he was dealing with the matter and he said:We are always …exceedingly anxious about abuse of legal aid.It does not matter how good a profession is, we thought that three cases were an understatement of the sort of abuses that we thought were likely to occur.
Then we went on to deal with green forms. Green forms cost about £1 million. They are a means of dealing with small matters where advice can quickly be given. They are most valuable and useful and everybody would want to see an increase of that kind of advice. In 1973–74 £1 million was spent, and 10 years later £44 million was spent. Some people have described it as the printing of £50 notes and the back-up was quite inadequate.
We say in our recommendations:We are concerned at the very large rise in green form expenditure".I think that we were right to be concerned; we believed that the scheme was a possible area of abuse. We recommendedpending the outcome of research into the scope of the scheme …redesign of the form to provide a greater degree of control.
We also advise a system of spot checks. However valuable, right and proper the motives where public money is concerned, they cannot excuse lack of control and a failure to ensure that that money is safeguarded. We were pleased to note in the Treasury minute that the report of the efficiency scrutiny investigation recommends the virtual abolition of the green form scheme in its present form. We also note that the Law Society is re-examining the matter and making early proposals for spot checks. We welcome that, as the service is clearly valuable, and we would not wish for its limitation through any wrongful use.
The 40th report deals with the torpedo programme. So much of that programme was summed up in question number 2390, asked by the hon. Member for Horsham. He said:We have so far spent £5,000 million on torpedoes.Earlier, he commented:One of the interesting things, looking at the record of the torpedo programme, is that it would appear that had we chosen to buy the American torpedoes we would have saved ourselves a great deal of money.Even in these more profligate days, £5 billion is an enormous amount to spend. It should be possible to buy an enormous quantity of weaponry, approching the ultimate weapon, for that amount. For a fraction of the cost, we could have bought something off the shelf which would have performed satisfactorily. I fear that that does not apply to all of our expenditure nowadays. We have retained a close and continuing interest in such expenditure, and will be returning to it again and again.
My next subject concerns a small amount of money: however, the small amounts often produce the principles. The 49th report deals with service movements. The services spend a considerable amount on vehicles and on the movement of personnel, stores and equipment, moving them around the country and overseas. They pay the commercial carriers, because not everything is dealt with in-service; there are operators who act on behalf of the various services. A total of £84 million was spent outside 1151 the services on the movement of stores and equipment, and £130 million was spent on personnel. To our astonishment, we found that the Government freight agent — which happens to be Hogg Robinson—had been chosen on an exchange of letters, with no competition, in 1870, and that that contract had been continued without any further discussion or competition. When I came to the Public Accounts Committee, I thought that all those skeletons had long since been discovered and reinterred. I hope that, if any civil servants ever hear about this, and if they know of any similar "skeleton", they will bring it out of the cupboard there and then.
The facts are appalling. We spent £15 million a year on the Government freight agent. The Ministry of Defence has told us that it considered that it was obtaining value for money; I am not sure how it was able to define that in the absence of competition. What we want, and persistently demand, are competitive contracts wherever possible. No one can doubt that it is the easiest thing in the world to obtain such a contract—to go out of one office and into another. I am sure that that will come to be accepted. If it is not, however, we shall exercise our only power which is to ask for a justification of such action —or perhaps, in this instance, inaction.
Our 52nd report deals with mortgage interest relief at source. In 1984–85, MIRAS cost the country £3.5 billion — it costs rather more now — and we commented on what we considered a serious amount of abuse. Paragraph 16 states:Inland Revenue told us that statistical information suggested that home improvement loans could have accounted for MIRAS of between £250 million and £500 million in 1985–86.The Treasury minute now says that the figure may be as low as £1 million. We do not know whether that is the case. However, the important point is the inability to know how much has been spent, or misspent.
The Inland Revenue felt that a more effective deterrent than carrying out a full examination of the receipts for such expenditure would be a few timely and well-chosen prosecutions, as a result of sample checks. The Revenue admitted, however, that no prosecutions had so far been instigated, although investigations into a few suspect cases were being pursued intensively. We felt that there were likely to be more rather than fewer such evasions, and we did not understand why the Inland Revenue was reluctant to require receipts in support of mortgage relief for home improvement loans. We thought that, if a duty were placed on the lender to obtain and keep the evidence, it might be more effective in reducing the scale of evasion. After all, so many people have to do that in regard to far smaller expenditure. Stories of people going on holiday on the proceeds of the new extension to their homes became legion about a year ago, and I am not sure that the reliability of such stories has been much reduced.
The sixth report concerns the Session 1986–87, and is rather more important. It deals with expenditure on major equipment. An annual amount of £1.6 billion is spent on major equipment for the armed services. We know full well that the cancellation of Nimrod represented about £1 billion, and that there were problems with cost-plus contracts. We were particularly concerned about serious failures to introduce competition when it could have been introduced. However, the Ministry of Defence assured us 1152 that it was now acting on the main lessons that it had learnt. It was no longer allowing cost-plus contracts without a ceiling, was placing project management responsibility on the contractor and was insisting on having one identifiable body as prime contractor. We found that reaction most encouraging.
We noted the particular problem of cost-plus, and that it had been operated without a ceiling. We also noted what had been called "gold plating", which, as defined by the Ministry of Defence, meant having rather exacting specifications that might not be necessary. We regard that seriously, because in so many cases exacting specifications —while giving security to the people who produce the contract, or the specification — might lead to the contract turning out to be rather more expensive than it should be.
I must refer to the comments of Mr. Levene, the Chief of Defence Procurement, in answer to my question 428, about competitive contracts. Mr. Levene was referring to the way in which contracts are let and to the fact that modifications need to be kept to a minimum. He said:One of our contractors was telling me the other day that he had this wonderful new system for incorporation into tanks — which may well be a very good system. Nevertheless, he had gone to the prime contractor and said he had this new system which he would like them to incorporate in the tanks. The prime contractor said to him 'Look, I have a fixed-price contract, I have a penalty clause, I have to deliver on time and on cost and unless you are prepared to underwrite the whole of the potential cost of delay both in time and money for the programme please go away.' I might be criticised for this but I have to tell you that I regarded that as one of the most helpful things I have heard for a very long time. That was an unsolicited comment and of course came through as a complaint. If you want to get rid of 'gold plating' — and I think we all agree that it is unfortunate that it has come about so often—there will be times when you may miss out on something but it is a small price to pay for getting equipment on time and on cost, that works perhaps to a slightly lesser specification but at least it works and you have not overpaid for it.Mr. Levene said that he might be criticised, but the exact opposite occurred. He was highly commended. We thought that his comments were most encouraging. The introduction of competition, wherever possible, has been most valuable for the Ministry of Defence. We hope that there will be competition for sub-contracts, even when there cannot be competition for the main contract, because there is only one main contractor. There is a new feeling of cash flow discipline within the Ministry of Defence.
Those with a commercial or an industrial background know full well that the one great discipline in the private sector is the ability to ensure that the cash flow is reasonably right. However, that problem does not affect the Government in quite the same way. They do not have the same cash flow problems as the private sector. Their valuable weapon is that if performance and price are not obtained they can cut the cash flow at the place where it hurts. We were very encouraged to hear that. We hope that it will be reflected in the work, the expenditure on, and the performance of the various weapons systems that we investigated.
Financial reporting to Parliament is a matter that concerns very few people, because very few people know much about it. However, we believe that it is important. Therefore, we asked for annual reports to be provided, setting out the work of a number of Departments. We have emphasised the importance that we attach to Parliament being provided with information on performance, 1153 efficiency and effectiveness. So long as the Estimates continue to be the formal basis for the granting of Supply by Parliament, it is essential that there should be a simple and direct correlation between them and information in the public expenditure White Paper on departmental objectives, performance and output.
We recognise the difficulties, but the major Government instruments for bringing expenditure to the attention of the House are the public expenditure White Paper, the Estimates and the appropriation accounts. The appropriation accounts come at the end of a very long line. They deal with the amount of money that has been granted. It will be a long time, therefore, before we can incorporate that information. However, we can make some movement towards a direct correlation between the Estimates and the public expenditure White Paper. At some stage in the future it may be possible to bring them much closer together. We notice that in their Treasury minute the Government have agreed to the bringing together of the public expenditure White Paper and the Estimates. We hope that in due course those aspects will be incorporated.
The financial management initiative began in May 1982, with the aim of improving the allocation, management and control of resources. The aim of that initiative is to obtain value for money at different levels. Its objectives are to find out what can be achieved, when it can be achieved and at what cost. We welcome that initiative. The attribution of responsibility is crucial. We have to identify who is successful and then reward him. Also we have to identify who is not successful and then take the appropriate action. Some objectives and some outputs cannot easily be quantified, but wherever possible there should be some quantification. Furthermore, there should be some statement of objectives. It is important to maintain the momentum. Therefore, we shall continue our studies.
I have already said that money must go where Parliament intended it to go. I am sure that there will be reports in the media tomorrow that the House was not so full as it might have been for this debate, even though it is one of the most important debates of the year. I am not disappointed. If the House thought that the Public Accounts Committee was failing to investigate what is happening and what is wrong, the Chamber would be crowded. However, the House has confidence in the work of my colleagues. So long as that confidence remains, my colleagues will do their best to pursue effectively their investigations on behalf of the House of Commons and the taxpayer.
§ Sir Michael Shaw (Scarborough)
My first duty must be to say on behalf of all members of the Public Accounts Committee a very big thank you to our continuing Chairman, the right hon. Member for Ashton-under-Lyne (Mr. Sheldon). I am very glad that he is continuing in his office. He has worked tremendously hard during a period of great development in the work of the Public Accounts Committee and the National Audit Office, arising out of the 1983 Act. These developments could not have taken place under a better Chairman.
The right hon. Gentleman's speech ranged very wide. That was natural, because the subject of the debate is very wide. I do not intend to go into such great detail, but I take up his concluding words: that if the Public Accounts 1154 Committee was not doing its duty, the House would probably have been full. I am an accountant, and I remember that one could foresee the sort of annual general meeting a client would have by the company results. If the results were sound and the company was doing well, everybody had confidence in the leadership of the company, nobody bothered to turn up at the annual general meeting and it was over in five minutes. If, alas, things were going ill, it was different—everybody turned up and wanted to know what was wrong. I am glad to say that it appears that we are doing our job well and to the reasonable satisfaction — I shall not put it any higher than that—of the rest of the House.
The right hon. Member for Ashton-under-Lyne referred, rightly — we are looking at papers that we considered in the last Parliament—to colleagues who are no longer with us. Some have moved on to higher and better things, like my hon. Friend the Member for Horsham (Sir P. Hordern). Others have left the House voluntarily or because of the vagaries of the political system. None the less, all of them contributed to what we were doing. Names that come to mind are Mr. Deakins, Mr. Frederick Silvester, Mr. Park, Mr. Cockeram, and others who for the moment escape my mind. They all played a part in the examination of witnesses and preparation of reports.
I am pleased with the quality of their replacements. In forthcoming years we shall enhance our reputation and produce results of benefit to the House and to the Government. The new Members come with good reputations in the House, and with a wide experience in the House and elsewhere.
I shall deal with one or two of the reports only. They reinforce the general theme of our investigations, as set out by the right hon. Member for Ashton-under-Lyne. First, the 19th report — it is curious that the right hon. Member for Ashton-under-Lyne and I should choose to start with the same report—concerns road maintenance. We are forcefully reminded about road maintenance as we come here from our respective constituencies. A serious lesson, not only with regard to the need for good roads, emerged clearly from the report: there is a need for continuity of programmes and for constant monitoring. When looking through the reports, and at our more recent work, it is curious that the word "monitoring" seems to come more and more into what we are seeking to do.
As the right hon. Member for Ashton-under-Lyne said, it is no good setting up a process, putting money into it and then letting it go. The programme must be constantly monitored, and one must ensure that it is matched so that it can be monitored. The same applies to the road motorway scheme. It is obviously better not to carry out the motorway scheme in fits and starts, with a little being spent one year and a lot in another. It must be a task of good government to spread a programme steadily so that the work force is continually in work, carrying out the programme.
That is the case with regard to maintenance. Sir Peter Lazarus gave evidence to the Committee. His comments were significant and I am often reminded of them as I pass through coned areas when travelling to and from Yorkshire. On page 5 of the evidence, he is reported as having said:We shall deal with the backlog on motorways within the next six years and that is the right timetable from our point of view. The aim, taking a long term look, is to maintain 1155 about 5 per cent, of motorways every year—that is capital maintenance, either putting down an overlay or, if it is necessary, doing major reconstruction — that is about 70 miles. We reckon that if we do 80 miles we shall catch up over six years and that if we do more than 80 miles"—by that I understand him to mean do the 80 miles and other certain urgent work—…that is about as much as we ought to do without imposing unreasonable delays on those who use the roads.That is the stark need that is apparent when we go up and down the motorway — the need for planning and the consequences of not planning and carrying out maintenance as and when it should be done. Clearly, the inconvenience to motorists is considerable, and will be so until the backlog has been brought up to date, when we can consider what Sir Peter Lazarus described as the tolerable repair programme.
The other point that Sir Peter Lazarus made was that if repairs are not done within the proper time the consequences are vastly expensive. Instead of being able to put in a 7 in or 8 in overlay on the ground the road must be dug up altogether. From what I have seen on my journeys, that is what has been happening recently, and we do not want it to happen again.
The 25th report of the House deals with the prison building programme. Over the years the quality of building, and the upsets during the course of the building and over the early years of operation seem to recur in varying forms in so many of our investigations. Here it is highlighted with regard to prisons. Paragraph VI on page xviii says:The Home Office and the PSA have built some prisons of basically poor design"—one is reminded of words that were said outside the Chamber on the subject of early design in the post-war period; I am sure that they are relevant to prison designs—using unsuitable sites because they were the only ones readily available. Designs have been changed, giving rise to extra cost and delay. There have been design and building defects on which the Departments were slow to take action because of poor appraisal and feedback arrangements. Some past faults are giving rise to excessive staff costs or buildings that cannot be used.If one goes through all the questioning that went on in Committee, those features are all too apparent; we condemn those failures. However, the failures have been present right from the beginning. Conclusion viii says:We are concerned at various instances of difficulties involving consultants engaged by PSA. Consultants should be carefully vetted at the time of engagement and thoroughly briefed, their contracts should be tightly drawn and their performance assiduously monitored, and if they do fall down on the job due redress should be obtained.That is a criticism of the contractors, but in all too many cases it is a criticism of the Department for not laying down clear guidelines as to exactly what it wants. In fairness to the contractors and the public purse, that is a lesson that is slowly being learnt, but it must be learnt if there is to be efficient contracting within the service.
§ Mr. Ian Gow (Eastbourne)
Has my hon. Friend applied his mind to the question whether it is necessary, when the Department of Transport is planning original motorways or maintaining or rebuilding motorways, to involve the Property Services Agency? Would it be 1156 possible, in the cases that my hon. Friend has described, for the Department of Transport to deal direct with the consultants or with the constructors?
§ Sir Michael Shaw
That is a very interesting question. No doubt my hon. Friend will raise it many times during our discussions in the Public Accounts Committee. Indeed, we have raised such questions before. So far, the decision in various areas has been that it would be better for action to proceed through the PSA. I do not have a closed mind on this matter. We must continually question the future of the PSA. That may well be a matter for later consideration.
I remember a very unusual occasion which I thought the right hon. Member for Ashton-under-Lyne was going to refer to, but in fact he referred to another. It resulted in an immediate resignation in connection with the PSA because of the difficulties that we had discovered. I am sure that my hon. Friend the Member for Eastbourne (Mr. Gow) is right to raise this question. I hope that he will continue to examine this matter very closely with an open mind and with his usual acute observation. Contracts should not automatically go to the PSA. They should go to the PSA only if it proves that it is worthy of the contract.
I return to my point about clearly setting out the objectives before Government money is committed. We must set out the objectives to state exactly what is wanted. At the same time, we must ensure that arrangements are made to control the expenditure of the money and monitor whatever enterprise has been set up as a result. It is absolutely essential to discover what was originally wanted and whether it was achieved at the price originally envisaged. That is one of our main tasks.
The 11th report from the PAC refers to National Health Service manpower. Obviously that affects many people as many people rightly are worried about Health Service manpower. We have been watching it for some time with considerable concern, as the report discloses. Page xii states:We note that since we took evidence from the Department, the review body on nurses' pay has reported and its recommendations have been accepted.That is history now. However, that happened as a result of our expressing concern at the present acute shortages of nursing staff in some areas. Obviously we shall have to consider that matter again in the near future.
The 11th report is very important. It shows that our comments and criticisms are relevant to matters of great concern to the public. I have said that we shall return to that matter and it is clearly one of our jobs to return to our reports, and to the responses from the Treasury to ensure that our recommendations are carried out. At the same time, it is just as important that as we monitor them, so they should monitor their own actions. Our work will then be lightened and, if any faults arise, they will be caught at an earlier stage.
I now want to consider the Welsh Development Agency. I refer to the WDA as an example of Departments monitoring themselves. We have not yet published all the evidence about what happens. We will do that one of these days, but for the moment we have not done so and I will leave it at that. What of our recommendations about the Welsh Development Agency? In the preamble to the seventh report we state:We took evidence in June 1986 from the Welsh Office and the Welsh Development Agency on investment in industry 1157 undertaken by the Agency. We had decided not to publish this evidence at the present time, though we hope to do so later together with a full account of our findings.We then give some general conclusions. Conclusion (d) states:For a major investment WDA should insist, before completion of an agreement when its influence is greatest, on the creation of a competent and balanced management team for the investee company.We may think that that is common sense, but it does not exist. Conclusion (e) states:Where monitoring officers take over existing cases it should be regarded as a fundamental necessity for subsequent monitoring that they make themselves fully conversant with the case by a thorough review of the relevant papers.An outsider may think that it is astonishing to have to include such a recommendation. However, it was absolutely essential. Conclusion (g) states:The Agency should take all possible steps to avoid a situation where substantial additional funds are put into an investee company at short notice on the basis of company projections that have not been independently validated.It is right that that should be avoided according to the examples that we saw.
Common sense is not a common virtue. It must be inculcated and the disciplines that flow from it must be placed there by the Departments to ensure that value for money is achieved. The other day—and I will not go into details and names — I had cause to question an accounting officer about a certain enterprise into which Government money had been placed. To my surprise, I received a letter from people involved in that enterprise saying that the calibre of those appointed to run the enterprise was far greater than the calibre to be found in the Department and that a detailed involvement by the Department would be a waste of time. I replied:I am afraid that my experience on the PAC has taught me that one should never assume that, because matters have been put in the hands of a distinguished board or committee, there is no further need for inquiry".In many cases—for example, De Lorean, Lear Fan and indeed the WDA—it is no good simply appointing distinguished gentlemen. They may be very good, but we must check that they are. If we do not, we may find that they enjoy the fruits of retirement. That is not the purpose of their appointment. They have a very responsible job. Their purpose is to ensure that Government money, the taxpayers' money, is well spent in the manner for which it was authorised.
I want to consider the amendment in the names of the hon. Members for Nottingham, North (Mr. Allen) and for Norwich, South (Mr. Garrett). It has not been selected, but we are allowed to discuss it. It is right that we should consider whether today's debate is being approached in the right way.
There is a problem for the future here because our work is becoming more important. We have been very fortunate. We have had a very distinguished Comptroller and Auditor General. Before I forget, I should add that the right hon. Member for Ashton-under-Lyne — I nearly said my right hon. Friend—has a very distinguished and important part to play at this juncture. I am sure that he will play a worthy part in advising and consulting the Prime Minister about the selection of his successor. I wish him luck in the task that he is to carry out on our behalf.
What are we to do? Are we to seek — as the amendment seems to suggest that we should — to have more frequent debates in the House to deal with specific matters raised in the course of our investigations? That 1158 would be one way. Perhaps I am getting too old for this game, but I do not think that we shall get a House full of Members to listen to such debates. Our debates are too complicated, and perhaps we may flatter ourselves that our hon. Friends are glad to leave these matters in our hands. Obviously we need periodic debates, even if they are only once a year, to discuss the state of the nation, as it were, with regard to the Public Accounts Committee and perhaps we could have additional days when necessary.
If we are to make the most of the Public Accounts Committee and the new importance that should be attached to it, we shall have to enhance the Committee's meetings. That must be the way forward. Far more notice is being taken of the reports of the Comptroller and Auditor General than of our own reports. If we are to have added importance, we must look to the surroundings in which we work. The PAC sat for the first time in conditions and circumstances very different from those in which we find ourselves today. The workload was very much lighter and the Government expenditure involved was very much less. As our work changes, so must the circumstances in which we meet. In particular, we have the threat of television. I use the word "threat" because I am against the televising of the House.
If we are to be televised, the PAC, our oldest Committee, ought to be televised. We need accommodation and arrangements must be made for us to sit in comfort. We need plenty of room for witnesses and for those who advise them and a proper public gallery. Earlier this week we met in a packed room and those in the gallery had to stand for two hours listening to our discourse. That is wrong. All the new buildings that are going up and all the enlargements that are taking place—if, indeed, they are taking place behind those sheets across the road— ought to be able to accommodate a proper Committee Room for the PAC, catering not only for hon. Members and staff but for witnesses and their advisers, for the public and, if necessary, for television and radio. That is the way forward.
I do not know whether we should have general debates on specific matters in our Committee, and I am not particularly bothered. However, I am concerned that our investigations and proceedings should be made known to the public in every possible way so that their influence and importance can be brought to the fore.
§ Mr. Donald Anderson (Swansea, East)
I congratulate the hon. Member for Scarborough (Sir M. Shaw) on his speech. I only regret that he stopped so short in his description of the Welsh Development Agency. I was anticipating ever greater revelations on what promises to be a Taffgate. I imagine that if the evidence is published, the public gallery will be packed next time the subject of the Welsh Development Agency appears before the Committee. I follow the hon. Gentleman, too, in saying that the House should clearly consider afresh how best to establish a link between the valuable reports of the Public Accounts Committee, and, indeed, Select Committees in general, and the whole House. There is a great danger of a gulf developing between the valuable work done upstairs and the rather noisier business on the Floor of the House.
This is an evening of consensus and I note that the hon. Gentleman nearly fell into the habit of calling my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), the Chairman of the PAC, his "right hon.
1159 Friend". Perhaps we should continue in that spirit. On both sides of the House, we must address ourselves to the question of how best to bring the work of Select Committees and the PAC, which is the key Committee of the House, before the whole House.
The Committee's importance lies not only in its reports, valuable though they are, but in the fact that it can potentially throw a searchlight on any aspect of Government. Civil servants everywhere know that they are being watched, and that the PAC is there in the background. The ability of the PAC to throw a searchlight on all corners of Government is perhaps one of its most valuable functions.
Knowing as they do that I represent a constituency which contains the driver vehicle licensing centre, hon. Members will not be surprised if I rehearse some of the comments that I made when the reports of the PAC last came before the House way back in 1985 and examine the 50th report of the PAC, relating to vehicle excise duty. I confess to a certain feeling of déjà vu. In all our debates on the PAC we begin, as we began today, with a magisterial and excellent general report by the Chairman, followed by a number of helpful specialist contributions. There is a danger of covering much the same ground that we covered in the debate in October 1985. However, it is important that we monitor the effectiveness and implementation of the various recommendations made by the Committee in earlier reports. Some of the questions raised in the Committee's earlier report on vehicle excise duty remain to be answered.
It appears from its latest report on vehicle excise duty evasion and enforcement that the Committee is still flirting with the possibility of an alternative to vehicle excise duty. For example, the report says:the position on alternatives …has not been permanently settled.It is significant that the whole question of an alternative to vehicle excise duty has been discussed at the highest levels of Government over the past decade. On each occasion, however superficial has been the proposal of a switch to a tax on petrol, it has been rejected by the Government. It looks as though the PAC is tending in the present report to overlook the strength of the positive case for the retention of vehicle excise duty.
A petrol tax would place too big a share of the burden of motoring taxation on high-mileage rural motorists. As the census showed, some of the poorest people in the country live in rural areas and, because of the inadequacy of public transport, are forced to rely on motor vehicles. Of course, the same applies to essential business users. At 1979 prices, more than £100 million a year would have been added to business costs, obviously resulting in higher prices and inflation, had there been this tax on petrol. In addition, abolition of the vehicle excise duty would clearly promote the interests of diesel-driven vehicles, and it could have substantial effects on what remains of the British motor industry.
The present method of collecting vehicle excise duty promotes the accuracy of vehicle records by regularly updating the names and addresses of car owners and vehicle descriptions. It is of considerable importance that such information be kept up to date. Currently, the vehicle record is 95 per cent, accurate. The inaccuracy of the record is caused by unlicensed vehicles. If all the vehicles 1160 in the country were to be unlicensed, the record would be substantially more inaccurate. The police are ready to confirm the importance to them of the current system.
Not only is revenue an important aspect of vehicle excise duty but it works as a check that drivers are properly insured and that their vehicles have MOT test certificates and so on. Therefore, it plays a vital function in the fight to improve road safety standards.
Another important advantage of vehicle excise duty relates to the ability to answer inquiries from motor manufacturers regarding recall campaigns which result in the removal of unsafe vehicles from the road. Many current advantages will be lost if VED is abolished. I shall not trespass on the time of the House by stating the staff implications, but they should be a major factor in the Government's consideration.
On the general principle of motor taxation, what appears to be a superficially attractive alternative is unlikely to be so in practice. I counsel the Committee not to drift into the danger of saying that something must be done to make a positive recommendation in respect of an alternative to vehicle excise duty. I remind the Committee of the danger of responding to the "something must be done" syndrome in the light of the unfortunate poll tax precedent. It now hangs like an albatross around the Government's neck, whether it be the tartan precedent of the Bill that is now lumbering its way through the House.
The Committee mentioned the level of evasion. It is certainly true that the gross figures have increased, but they have increased, in part at least, as a result of the increase in duty. The evasion element compares favourably with that in respect of income tax and various customs and excise revenues. I hope that the Minister will take the opportunity to confirm to the House that the driver vehicle licensing centre is a cost-effective operation. The revenue that it collects—of course, mostly VED—is substantially in excess of £2.5 billion.
If there is a correlation between hon. Members' interest, the grand public's interest and the quality of the product, one may contrast the questions on transport, when there were frequent criticisms of the centre during its teething problems of the 1970s, with the fact that there is now hardly a passing reference to the efficiency of the centre. That has been confirmed by many Transport Ministers, who, as they come and go—they tend to come and go frequently—have visited the centre.
§ Mr. Anderson
We have with us one coming Minister. May he continue to come for a long time — until the next election, anyway.
I am surprised that the Government said to the Committee that the staff implications are such that there would be only marginal returns in respect of licence evasion if there were to be an increase in staff. That is certainly not the attitude that was adopted earlier. That is not the view of the unions, as one would expect, or of the management of the driver vehicle licensing centre. They think that the bulk of evasion could be eliminated in a cost-effective way by an increase in resources. It would be helpful if the Minister would give us a clearer picture of the Government's views of the cost-effectiveness or otherwise of employing additional staff. How many cases are currently being abandoned because of staff shortages?
1161 Is the Minister prepared to say that Government restraints on Civil Service manpower do not play a significant part in the adequacy of tax collection?
Earlier this week, I was interested to see the Solicitor-General's response to the Adjournment debate relating to the Land Registry. He talked about a possible new way of looking at the manpower requirements of a body such as the Land Registry, which is self-financing and which might be considered outside the normal Civil Service restraints. Will the Minister examine that point, which is reported in Hansard of 30 November 1987, in the light of the staffing claims that have been made by the driver vehicle licensing centre?
I am happy with the improved links with the police. In May 1984, the police in my area of south Wales were unwilling to participate in the vehicle excise duty blitz operation that was called for. As the Minister knows, this autumn there has been a blitz campaign. It will be helpful if, in an appropriate way, the Minister will tell the House what the results of that campaign have been, and whether, in the Department's view, the operation has been cost-effective. I do not know what the appropriate form is, but I am sure that the Minister, with his usual courtesy, will find a means of stating the position to the House.
§ The Parliamentary Under-Secretary of State for Transport (Mr. Peter Bottomley)
If the hon. Gentleman will put down a question, I will be able to answer him.
§ Mr. Anderson
With regard to the level of finance, this is where we came in. Each time, I have received a sheaf of replies from the Department of Transport stating that it is concerned about the level of fines and that it is derisory that only £47 is the average fine for those in default. As the Chairman of the Committee said, on balance, it almost makes it worthwhile or not to pay one's vehicle excise duty. Perhaps that is a message that should not go out too clearly from the debate. The Chairman talked about widespread evasion and little risk.
Therefore, it would be helpful to know whether the Government will seek to lean on the Magistrates Association and the extent to which the Magistrates Association has responded in sending guidance to magistrates on the appropriate fines for vehicle excise offences. Clearly, the current campaigns have been ineffective. The level of fines has moved up only marginally. It is still wholly inadequate and is no real deterrent to those who are tempted to default on payment of vehicle excise duties.
Finally, I have been in touch with the Department from time to time to ask what other bright ideas it has about evasion. Two years ago, I raised, if only for consideration, the question of wheel clamps and received a reply from a gentleman who then described himself as the Minister for Aviation, the hon. Member for Worcestershire, South (Mr. Spicer). In a letter dated 29 November 1985 he referred to the point that I raised during the debate on 24 October 1985, stating that I suggestedthat the wheel clamping of an unlicensed vehicle might be a possible enforcement measure in areas of high evasion.The Minister stated:At present, wheel clamping is, of course, being trialled"—that is an awful word—in a small area of central London to test its effectiveness ir the field of parking control. I think we need to complete that experiment and, if successful, establish clamping as an accepted traffic control measure before considering its use for 1162 other purposes. But I have certainly not ruled out the possible use of clamping, or impounding, to strengthen VED enforcement in urban areas in the long term.That letter was written just over two years ago. I repeat my suggestion to the Minister, but ask, how long is "the long term"?
§ Mr. Michael Latham (Rutland and Melton)
It is a pleasure to follow the hon. Member for Swansea, East (Mr. Anderson) not only because of the importance of his contribution but because he addressed a matter to which I shall turn in a moment, not the question of vehicle excise duty but the interface between policy and the work of the Public Accounts Committee, which is an extremely important issue.
First, I should like to put to the House, as I did to some extent during last year's debate, my question, "Why do we bother?" Why do some of us turn up every Monday afternoon from 4.45 pm until about 7 o'clock and every Wednesday afternoon from 4.15 pm to 7 o'clock, with mounds of paper, to take part in the operation of the PAC? For sure, it is not for publicity. We do not get our names in the papers as a result. One gets more publicity from one asinine remark to the Press Association about nothing at all than one gets for serving on the PAC for a year. For sure, it is not to address packed Benches in the House of Commons. As the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) rightly said, if the House was concerned about that matter and was not prepared to trust to our judgment, hon. Members would be here to listen, but they are not. Perhaps we should regard that as a negative compliment.
Why do we do it? I know why I do it. In many ways, it is the most important thing that I do in this building, apart from, of course, my constituency work because, at last, I, a little cog in this big wheel, can get to grips with the real source of power. I am sorry to say that the real source of power is not my right hon. Friend the Financial Secretary to the Treasury, fond though I am of him because we were at Cambridge together, and I have the highest possible admiration for him. The real source of power sits opposite us in the PAC on Mondays and Wednesdays — the "Sir Humphrey Appleby'", the permanent secretary, the great mandarin. The first sign of the crucial importance of the PAC is that the head of the Department is legally, contractually, and statutorily required to be there in front of Committee members.
Only the other day, the Treasury Officer of Accounts, a senior civil servant who appears at all our meetings, circulated another memorandum to all permanent secretaries reminding them of their statutory duty to appear before the Public Accounts Committee to answer for all the work of their Department, including work before they came to the Department. They may have served earlier in a different Department, but they must answer for their Department's work even before they became the permanent secretary.
The memorandum also serves to remind us — my goodness, what an important point this is — that if Ministers decide on policy grounds to overturn the recommendations of their officials in a way that the officials regard as financially unwise or likely to come before the Committee for censure, it is the duty of the permanent secretaries to seek written instructions from their Minister. It is worth stressing that point because it 1163 is not academic. To my certain knowledge, the Committee has at least twice asked the Officer of Accounts whether such instructions were sought. I hasten to say that we received satisfactory responses on each occasion. The duty of the Officer of Accounts to appear personally before the Committee is a statutory duty that cannot be waived and that is, in my view, absolutely crucial to our work.
The work of the Comptroller and Auditor General is also absolutely crucial. The right hon. Member for Ashton-under-Lyne rightly paid tribute to the work of Sir Gordon Downey. That tribute is echoed by all who serve on the Committee and hon. Members throughout the House. I intervened in the right hon. Gentleman's speech to ask him to draw, which he duly did, a distinction between the reports of the Comptroller and Auditor General and the reports of our Committee. It should be placed firmly on the record that the reports of the National Audit Office are exactly that — reports made by the National Audit Office to this House. Before they appear, and indeed after they appear, as a member of the Committee I must be satisfied about two things: first, that they are totally scholarly and objective, that the facts are not in dispute but are absolutely accurate and have been agreed by the Department, and that they are brought forward in an effective and incontrovertible manner. Secondly, I want to be sure in my own mind that the subject was worth investigating in the first place, that it is neither too trival nor so diffuse as to be outside our responsibility.
I must sound a word of caution. As our responsibilities widen and as, more and more, we are taking on matters which in the old, pre-value for money days we would not have taken on, we are addressing issues that are wide, difficult and arguably within the role of other Select Committees. I refer, for example, to agricultural stock holding, to the common agricultural policy and to other matters which we have addressed and which I and, I believe, other members of the Committee had question marks in our minds about whether we should have tackled those issues at all or whether they would not have been better dealt with by a Select Committee because — I return to the point made by the hon. Member for Swansea, East—they involve mainly policy. The hon. Member for Swansea, East referred, absolutely rightly, to the report on vehicle excise duty and properly put forward the point of view of his constituents.
I should like to say two things about this matter. First, the Committee did not recommend, indeed, as far as I know, the Committee has never intended to recommend, a particular option, such as rural petrol proposals. Secondly, in so acting, the Committee acted as a committee of politicians seeking consensus and a unanimous report. It may well be that the National Audit Office would have liked us to recommend a particular course of action. I do not know whether it did. I am not going to say what went on in the Committee because it would be wrong to do so. However, I remind the House that the report that appeared was the report of the Committee and not of the National Audit Office. It is important to draw a clear distinction between the two.
When sitting in Committee I often think how I would react if I were sitting at the table as the Officer of Accounts and the way in which I should attempt to answer some of the questions put to me. I often think how nice it would 1164 be to have a witnesses' guide which, as permanent secretary, I could have beside me, as well as the pages and pages of briefing that are brought to our deliberations. What would I ask myself? First, I should say, "Take it seriously, do your homework thoroughly, assume that the Committee has actually read the documents, that hon. Members will know which questions to ask, and that they will not ask them in a partisan manner but will respond effectively and reasonably to decisive and clear answers."
Above all, apart from not acting in a cocksure or dismissive way — I hope that no permanent secretary would do that—if a mistake has been made, let him say so, clearly and simply. Let me just give one simple example where exactly that happened and where the admission was made. It comes from the report on service movements, and relates to the deplorable little incident of the wasted money on the purchase and sale of the MV Keren which is reported there but with which I will not weary the House.
I asked Sir Clive Whitmore, Permanent Under-Secretary of State for the Ministry of Defence—a very high mandarin indeed:Would you say on reflection that this had been a well-handled event?Sir Clive Whitmore replied:I do not think that it was a well-handled event.Fair enough, absolutely right and he admitted it.
The next question is what one is to do about it and if one will be able to come back in a year's time, not on the incident that I have mentioned—that is finished—but on similar incidents, such as that of the Property Services Agency to which the right hon. Member for Ashton-under-Lyne referred, and hear an official of a Department say that he has accepted the Committee's criticisms and recommendations and has taken action designed to put things right. After all, there have been occasions when the Committee has concluded a report by saying that it is not satisfied with a particular matter and will expect to see a considerable improvement in performance in 12 months' time.
It is well understood, both in the House and outside, that there are expectations of that kind on the part of the House and the Committee in which the House places its trust—an offer that the Committee cannot refuse. We look for those expectations to be met effectively and, if they are not, we will go back and back until the thing is put right, and, if necessary, heads will roll.
On the subject of heads rolling — and I made this point strongly to my right hon. Friend the Financial Secretary last year—we do not expect to have to come back year after year and discuss the same subjects. We expect our recommendations to be met by the Treasury minutes and action to be taken. When we find ourselves returning to the same subject, we must ask what has gone wrong with the Department, why the accounting officers have not done what they said they would do, and why the Minister has not insisted upon it. Ultimately the buck stops with him and his colleagues. Recommendations which are accepted in Treasury minutes are to be implemented, and implemented quickly.
I could give an example, not mentioned in debate so far, of where nonsenses of an almost hilarious kind appear, but which point a lesson and adorn a tale. This is the 17th report, dealing with the Northern Ireland appropriation accounts. It is difficult to imagine a greater cosmic, mega-yawn than that title, but in this document we find two serious matters. The first is the fact that the Industrial 1165 Development Board for Northern Ireland was examined by this Committee on the way in which it had paid additional money to a company to persuade it to remain in Northern Ireland. Although this might be considered laudable, the officer of the board admitted under questioning that the company was thinking of moving from Northern Ireland, not to Tokyo, Bonn, or Los Angeles, but to County Durham, another part of the United Kingdom. The board paid money to keep the company in Northern Ireland, taxpayers' money, although the company wanted to move from one development area to another.
I asked who the company's main rivals were. Were they other United Kingdom companies? Mr. McAllister, the witness, said, "They would be." So the main rivals of this company to which taxpayers' money was being paid were other United Kingdom companies, who saw one of their rivals being subsidised to remain in the same place rather than move to a different part of the United Kingdom. I asked if this was a matter on which the IDB had any concern:Is there not a risk that you will simply pay money to efficient, well-managed, profitable companies—in the words of paragraph 111—moneys which are paid for obviously by all United Kingdom taxpayers to the detriment of other United Kingdom companies?To this Mr. McAllister replied,We have three criteria to apply which are: viability, efficiency and additionally".We have only recently had the equivalent of a Treasury minute, the report of the Northern Ireland Department of Finance and Personnel, and the matter is dealt with very briefly indeed. The report said that the Departmentshave noted and will have in mind in case work the Committee's expectation that IDB's selective financial assistance criteria should be applied with due regard to the national, as well as the Northern Ireland regional, industrial development interest".I shall want a lot more than "noting". When we come back to the House in 12 months' time with this, as we may well do, I shall want to be sure that we are not still dishing out taxpayers' money to keep one company competing with other companies in one area of the United Kingdom when it might have wanted to move to another.
I hope, too, that very close examination will be made of the farcical situation in the same report of the people in Northern Ireland who got compensation because they fell over the kerb stones. One of the most serious and unsatisfactory answers that I read—and heavens knows we hear and read some bad ones— was the response given to the right hon. Member for Ashton-under-Lyne.
Have you any system to eliminate the possibility of collusion between any of your staff and claimants?was the question, and the witness replied:I arranged for an immediate basic systems examination from this aspect of our 6 geographic Roads Divisions, with the outcome that it is now apparent to me that in 3 of those Divisions the system falls short of what I could, as Accounting Officer, accept as fully meeting the required criterion.There is no suggestion here that there was collusion, nor does the Committee suggest it, but the fact is that there were not adequate systems in place to prevent collusion between staff and somebody pretending that he had fallen over a stone and getting taxpayers' money for doing so.
That is the sort of tiny matter which the Public Accounts Committee drags up, tiny compared with mighty matters like De Lorean, with which we also deal. I know that my right hon. Friend the Financial Secretary takes these things seriously and has said so many times but I ask 1166 him to let it not be doubted that there could be no more crucial role for Back Benchers than this, to prevent the waste of their constituents' money.
§ Mrs. Ray Michie (Argyll and Bute)
Thank you, Madam Deputy Speaker, for calling me in this debate as I have a particular interest as transport spokesman on the Liberal Bench. I am interested in two of the five reports. I was slightly taken aback when the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) came in beside me with a whole stack of reports under his arm. Perhaps it is because I am new to the House that I was not aware that I probably should have read the whole lot and that they could be discussed tonight. So I will stick to transport and one other subject.
The first report is on the evasion and enforcement of vehicle excise duty. I was astonished to learn that 2.2 million owners evade duty at some time during the year, and I welcome the Department of Transport's assurance, which I think it gave the Committee, that it regarded evasion of £100 million a year as being too high. That is quite an understatement: I think that it is astronomically high. It is not only a serious loss of revenue. Untaxed vehicles are also frequently unroadworthy and often do not have Ministry of Transport test certificates, and drivers too are often uninsured. That raises important safety considerations.
It appeared from the report that the Department of Transport has reached something of a crossroads on the question of evasion. I believe that it was Sir Alan Bailey who pointed out that there is a limit to how much of the £99 million the Department can get back before it must spend more on enforcement than is received in revenue. I understood that, on the Department's admission, the vehicle excise duty compared unfavourably with a number of other taxes and duties that cost less in proportion to the total yield from that excise duty.
I believe that the most disappointing aspect of the report—it has been echoed by the PAC—is that there is no definitive answer on how to solve the problem posed by the vehicle licence. It seems that either more staff must be employed—the process would then rapidly become non-cost-effective—or people should go round clamping vehicles that appear to be unlicensed to establish ownership and licence status. I believe that that was what the hon. Member for Swansea, East (Mr. Anderson)—he has since left the Chamber—was advocating. I am not especially keen on the idea as I believe that then our roads would be cluttered with clamped vehicles.
In paragraph 15 of the report, the Committee stated that it was not provided with any information aboutcalculations or considerations on which all of the possible alternatives to VED have again been rejected".An idea has been floating for a while to abolish the vehicle excise duty in favour of an increased petrol tax. That would transfer cost to the use of a car rather than ownership. To a certain extent, it would contribute to fuel conservation. There is no doubt that the £100 car licence is a considerable disincentive to many people who wish to own a car, especially in areas where the public transport service is poor. The abolition of the vehicle licence would be welcomed by those living on small islands, especially by my constituents of Argyll and Bute and those of my hon.
1167 Friend the Member for Orkney and Shetland (Mr. Wallace). There is very little in the way of roads on those islands.
§ The Financial Secretary to the Treasury (Mr. Norman Lamont)
They are small islands.
§ Mrs. Michie
Yes, indeed. Often one can travel from one end of an island to the other fairly speedily in a car.
I understand that, in 1979, Stephen Potter of the Open University carried out research on petrol tax. He said that on average, if an increased petrol tax was imposed, 50 per cent, of people would be worse off, but he also showed that rural motorists—contrary to their belief—did not incur a higher than average mileage. I find that hard to believe. However, Mr. Potter said that higher income leads to higher mileage.
I hasten to add that the idea of putting a tax on petrol carries all sorts of problems and dangers. My constituency is a large rural area of 3,000 sq miles and it has a coastline longer than that of France. Naturally, I would be extremely worried about the effects of an increase in the duty placed on petrol. Of course, the further north one goes, the higher the price of petrol and I accept that there are tremendous variations throughout the country, but, nevertheless, the knock-on effect of an increase in duty in rural areas would be considerable given that transport and living costs are already extremely high. I understand from the report that the decision on alternatives to the excise duty has not been permanently settled and I look forward to hearing about new ideas. We should always be prepared to consider such ideas.
I am also interested in the 19th report entitled "Expenditure on Motorways and Trunk Roads". I welcome the fact that the PAC recognises that there is a fundamental disagreement between the Department of Transport and the local authorities on their respective responsibilities. The Committee said that there was a need for change.
I agree with the Association of Metropolitan Authorities that there are important practical, financial and manpower advantages to be gained from transferring the responsibility for trunk roads to local authorities—for trunk roads, I hasten to add, not motorways. I understand that in some English counties one road may pass through several counties before joining another. However, it would make sense to transfer the responsibility to local authorities because, as the Committee noted, bypasses and relief road schemes form the greater proportion of the overall road programme. In my estimation, local authorities are better placed to judge, understand and be sensitive to local needs. Such a move would result in the devolution of power, and that has always been advocated by myself and my right hon. and hon. Friends.
§ Mr. James Wallace (Orkney and Shetland)
My hon. Friend is dealing with the important matter of public expenditure. What does she think about the directive from the Scottish Office that was sent to the Orkney Islands council? It stated that the 60 mph warning signs that had been put on the roads without Scottish Office approval should be taken down pending consideration by the Scottish Office and, if approved, to be re-erected. Does my hon. Friend think that that directive will result in the good use of public money?
§ Mrs. Michie
I agree that it does not sound very helpful. Perhaps that matter should be referred to the PAC.
If responsibility for trunk roads was transferred to local authorities, the Department of Transport would look less like a department for roads. I hope that the Minister can reassure us that that large Department has given appropriate consideration to the views of local authorities. Meanwhile, I believe that the Department should rank schemes in order of priority on a financial basis, so that the maintenance of roads—the right hon. Member for Ashton-under-Lyne has already said that such maintenance has been starved of funds for many years— can occur at the right time and in the right place. Surely that would save money in the long run.
I wish to spend some time commenting on another report that has nothing to do with transport, the 44th report on preventive medicine, in which I am interested as a former employee of the NHS. I welcome the report and I agree with its recommendation that there should be encouragement for an increase in immunisation, which is so important for our youngsters. I am sure that the Committee was wise to deplore the delays in introducing a comprehensive arrangement for an effective screening against cervical cancer. Each year many women die of that disease, and it is essential to set up a proper recall system, well-woman clinics—
§ Mr. Graham Allen (Nottingham, North)
We have had that system for 20 years and it is still not working properly.
§ Mrs. Michie
I believe that it does.
Debating the report on preventive medicine is timely, and must be somewhat awkward for the Government, who have just announced that patients—with the exception of some categories—will no longer receive a free NHS sight test. One of the report's conclusions refers to the major importance of achieving improvements in the health of the nation through preventive rather than curative medicine. I find it difficult to understand why the Government have chosen to do what they have done with sight testing just at a time when requests were being made to have the three tests that are necessary for the detection of glaucoma routinely carried out in all people over the age of 40. No symptoms help to detect the desease in its early stages, and it is estimated that 150,000 people have undetected glaucoma in this country. The disease is insidious and leads eventually to blindness. How many more people will get it now?
The Government should look again at what I believe to be a retrograde step and accept the recommendations of the report. They should seek information on the costs and benefits of a preventive programme for the detection of glaucoma before introducing—or even if they introduce—the charges. Then perhaps the Public Accounts Committee could examine the matter and see whether such a programme would be cost-effective.
I commend the right hon. Member for Ashton-under-Lyne, the Chairman of the Public Accounts Committee, and all the Committee's members for producing as a result of a tremendous amount of work these interesting and worthwhile reports.
§ Mr. Michael Morris (Northampton, South)
I agree wholeheartedly with my hon. Friend the Member for Rutland and Melton (Mr. Latham) that, of all the work 1169 one does in the House, the work of the Public Accounts Committee—I have served on it for nearly 10 years—is by far the most satisfying, apart from that for one's constituents. My hon. Friend touched on one or two general points about the Committee's work which I want to develop before I dig into one or two of the reports. Before I do that, I apologise to my right hon. Friend the Financial Secretary for the fact that I shall not stick to the best five reports that have been selected, because I think there are other interesting areas to discuss.
On the general aspect of our work, the time has come—perhaps the opportunity arises now with the impending appointment of a new Comptroller and Auditor General—to examine the way in which we handle the work before us. I am conscious of the increased workload and I am not whingeing about it. However, I am concerned that we should spend our time on the Committee on the real issues of bad management and examining things that have gone badly wrong. I do not want to spend a Monday or a Wednesday evening covering ground that is fairly amorphous, when there does not seem to be any particular point at issue and, in effect, we are following up a report that the Comptroller and Auditor General felt should be of interest to Parliament. Undoubtedly, they are all subjects of interest on various aspects of life in Parliament. However, as my hon. Friend said, the review of agricultural policy was one topic about which I complained vociferously, because it did not seem to me an appropriate subject for the Public Accounts Committee; and I add to that the recent work on a report produced on the TSB, which I thought was wholly out of court.
For the benefit of the incoming Comptroller and Auditor General, I say that the Committee has been very patient about one or two of the offerings it has received. When the new Comptroller takes office, I shall be a good deal less patient if we find his Department investigating areas that may just possibly fall within the provinces that Parliament has given him but which are not of much interest to hon. Members.
The Committee will also look in depth at the quality of some of the work done on areas that are relevant. I declare an interest as an owner of some small woodlands before saying that when we examined the forestry report and the economic analysis done by some organisation, it was not surprising that there was a major reaction from all the forestry interests—public and private—because the quality of the work was well below what we expected from that office.
My hon. Friends were right to raise the problem of the green reports versus the blue reports. The Comptroller and Auditor General produces his report on an issue which receives press coverage—sometimes of considerable length. Some weeks—perhaps some months—later, the Committee examines the report and may well disagree with it entirely, coming up with wholly different recommendations. The coverage that those recommendations receive is conspicuous by its absence and the public is misled into believing that Parliament has agreed with the Comptroller and Auditor General. That is a serious matter which we need to examine closely as a Committee so as to find an answer to it. After all, it took me five years to persuade my colleagues to put a report's conclusions at the front so that they can be found, rather than hiding them away in the middle. We have now made that major step forward, but there is room for further work.
1170 I note that the amendment to the motion has not been selected today, and I do not necessarily agree with its detail. However, it is unacceptable that 35 reports from 1985–86 and another 19 from 1986–87 should be debated in one sitting. We must find a better way of dealing with these reports, which are important. We need a considered minute from the Treasury. I say to my right hon. Friend the Financial Secretary that I greatly welcome the improvement in the Treasury minutes that we are now receiving. There was a time, early on in my period on the Committee, when, if one got more than five lines in response from the Treasury, one knew that one had hit a bull's eye. Now, we receive considered responses, which is enormously welcome. I thank my right hon. Friend for doing his bit to ensure that that happens.
The incoming Comptroller and Auditor General would be well advised to remember—as would Departments of State—that another aspect of the Committee has changed. We now follow up reports and have an automatic checking system, operating on a two-year cycle, to ensure that, if we have given a critical report, the actions that we have recommended have been acted upon—we do not forget.
I want to delve into one or two of the reports. The first that I want to examine is the 39th report of 1985–86, which was on the Rayner scrutiny programmes. It is a short report, but if I was to recommend any report to hon. Members, this would be it. I remember that there was enormous scepticism in the press—Left, Right and middle—about the usefulness of the Rayner scrutiny. There was great scepticism about whether anyone could come in from outside and put forward proposals that would be worth while. Certainly, the impression given by civil servants at the time was that the world of Government was a very different one, and that they were not likely to be taught much by a mere retailer.
It is interesting to note that in the summary of conclusions and recommendations we say that we were satisfied that the arrangements for these reviews had been highly cost-effective and that they were a valuable way of securing a rapid and positive response to problems. We certainly looked at this in great depth. We went on to say that success depended on choosing worthwhile topics, and that the Prime Minister's adviser on efficiency and the efficiency unit had an important role to play.
We note that many Ministers rejected areas for analysis. Perhaps we should have another review of this. We should underline the point in our recommendations that we trust that the Prime Minister's adviser on efficiency will continue to monitor the acceptance or rejection of recommendations, and that he will be prepared to intervene should any be rejected unreasonably.
In the report we say that even a six-month delay in the implementation of the recommendations had cost the public about £300 million. That is a huge sum of money by any yardstick for a relatively short period. We say that we endorse the continuing arrangements for scrutinies and that the success of the scrutinies depends on the backing of the Prime Minister. It is good that the Prime Minister has supported this during the whole of her period in office. One problem is still outstanding and it is not fully addressed in the Treasury minute. It is the problem of overlap between Departments and further work needs to be carried out on that. So much for the Rayner programmes.
1171 The National Health Service is a fund of information for the Public Accounts Committee. Again I declare an interest, because I am married to a general practitioner. Inevitably, that means that I get very involved in the questioning of the accounting officers who regularly come to the Committee in relation to the National Health Service. We have slightly fewer reports on the National Health Service than we have had on other occasions—perhaps on a smaller scale.
The hon. Member for Argyll and Bute (Mrs. Michie) was quite right in what she said about our report on preventive medicine. There is no doubt in the minds of Committee members that screening for cervical cancer and the immunisation programmes are of great importance. Those of us connected with the National Health Service know the value of that work. We certainly know its benefit in terms of value for money—if one can put it in that way when talking about the lives of children, or for that matter about the life of anyone.
The Treasury minute talks about the planning and review system by regional health authorities following on from the DHSS. It suggests that the priorities for preventive programmes should be laid down by the DHSS. I hope that my hon. Friend the Minister will bring to the attention of the Secretary of State that, while those are good words and that that is what should happen, it is undoubtedly not happening. I shall urge my colleagues on the Committee to have another look at this, because it is not working very well.
There is a rather weak response from the DHSS about cost-benefit analysis. Its response is that cost-benefit analysis would be very useful but that it is not too sure that it could achieve it in preventive medicine. The Department spends millions of pounds through the research councils and should be able to find some yardstick that gives us some response about cost-benefit analysis. I long for the day when we can get the Department responding as it should in that area.
The other report on the National Health Service is about value-for-money developments and energy conservation. We say that there must be continual vigilance to ensure that the cost-benefit savings that are being achieved will continue to be achieved. There is little point in having a cost-benefit saving in year one and then to discover that somebody has forgotten all about it by year three. We emphasise that, if a district health authority decides to cut a service, that should clearly be separate from a cost-improvement programme.
I was reassured by the Treasury minute when I say that the Department is vigilant to check that claimed cost improvements are just that, and are not a cut in service. The report speaks about the need for further Rayner-type scrutinies in the National Health Service. Of all our services, the Health Service remains one of the most fertile grounds for Rayner-type inquiries.
There are two reports about exporting. Many years ago I wrote a pamphlet for the Bow Group about helping the exporter, and I have kept a keen interest in exporting. The 28th report from the 1985–86 session is called "Export Credits Guarantee Department" and the 18th report from the 1986–87 Session is called "Government Services to Exporters Overseas". On a number of occasions we have questioned the accounting officer at some length and have discussed the problems of the ECGD.
1172 We have recognised that past decisions of the ECGD have resulted in a huge potential cost to the public sector. We must recognise that that cost probably still has to come home to roost. I do not pretend that anything can be done about that, but I draw the attention of the House to the fact that the future marketing strategy of the ECGD is crucial in order to ensure that we do not run up losses on the scale that we have had in the past. It is also crucial in the sense that it still provides a vital service for many of the nation's exporters.
The service is important to the part of the world that you and I, Madam Deputy Speaker, know well, south-east Asia, where ECGD cover is often a key factor for exporters. It would be entirely wrong if, because of earlier decisions about certain other large trading areas, exporters to south-east Asia were to be penalised. The House still awaits a clear statement from the ECGD about its exact marketing strategy for the future. It needs a strategy as opposed to a hand-to-mouth attempt to reduce the cost damage to the public sector borrowing requirement.
The Treasury response to the report "Government Services to Exporters Overseas" is probably the worst Treasury minute that we have before us. It is critical of the Public Accounts Committee. I do not know whether the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), keen and diligent as he is, has read every paragraph of the reports. When I read again paragraph 72 of the Treasury minute on the 18th report, I thought it worth quoting:However, the Report does not give full weight to the range and extent of further improvements already made or under way, nor does it take full account of oral evidence given to the Committee. The FCO and DTI have been conducting for some time a series of major studies of individual components of the export promotion effort.The next paragraph says:The studies include market research on exporters' requirements; on their perceptions of the official services and how they relate to exporters' needs; and consideration of the adequacy and allocation of resources".That is a cheeky answer to a serious report. The Public Account Committee questioned diligently the accounting officer. I hope that my right hon. Friend the Financial Secretary will read our report again. We said strongly that we were not convinced that the right balance had been achieved or that we knew where we were going in export promotion. If the only thing that the Foreign and Commonwealth Office can come up with is a little market research, that is not an adequate response to a serious report.
The Ministry of Defence joins the NHS as one of our most popular candidates for inquiry. The 21st report, 1985–86, deals with the dockyards, a subject which brings a sigh of disbelief from all hon. Members. If a naval ship is to be repaired late and over budget, it should go into the dockyards. I think there was a recognition in all parts of the House that something had to be done to improve the efficiency of the dockyards. It was not for the PAC to comment on policy. We made the important distinction in our report that the Government's proposals for the dockyards were not privatisation but the infusion of commercial management. We highlighted that important difference.
Two other aspects that we pulled out as being of concern for the future of the commercial management are still under question. The House does not yet know whether the targets set for the interim management measures before the commercial managers took over were achieved.
1173 One suspects that they probably were not. In our report we also highlighted the extraordinary establishment of the directorate general of ship refitting. That body was to continue to monitor the work being done on naval ships. We are all for monitoring, but when we were told in the Committee that the monitoring would require a budget of £11 million and no fewer than 800 bodies, we were right to question whether it was needed. I suspect that the Committee will want to have another go at that. For the life of me I cannot think what 800 people will be doing in monitoring work which we all hoped would be done more efficiently than in the past.
The nationalised industries are a pet hobby of mine. A disappointing feature of the National Audit Act 1983, in whose passage I was happy to play a role, was that we had to give way to pressure from the chairmen of nationalised industries to exclude them from the Act. We had to give way on that to get the rest of the meal. We got the rest of the meal but the exclusion of the nationalised industries was wrong in principle and the House will have to come back to it. The 36th report that we produced was encouraging in that we found that at last Departments of State were beginning to learn what the nationalised industries were doing.
The very success of privatisation, whether it is liked or not by the Opposition, means that the number of nationalised industries available for scrutiny is greatly reduced. When the privatisation programme has gone a long way down its course—we hope that it will go a very long way—the House should have another go at ensuring that those industries which remain in the public sector come into the orbit of the Public Accounts Committee.
The Committee has studied vehicle excise duty evasion and enforcement several times. We recognise that we have not yet had great success in catching those who avoid paying the tax. Like other hon. Members, I suspect, I get letters about the dog licence. It is difficult to imagine having a mileage tax on dog movements as an alternative to the dog licence. Motor vehicles are supposed to display a licence, and the licences are supposed to be checked. But even when offenders are caught, we do not succeed in getting the tax. My position is clear. If we have so much trouble collecting the vehicle excise licence duty, how can we collect dog licences? The Government are right to drop dog licences.
§ 8.7 pm
§ Mr. D. N. Campbell-Savours (Workington)
I wish to follow the references of the hon. Member for Northampton, South (Mr. Morris) to the dockyards. It gives me the opportunity to set out a dilemma for some Labour Members of the Public Accounts Committee.
I listened with great care to my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), the Chairman of the Committee, when he referred to our objectives in terms of economy, efficiency and effectiveness. Those words were put very well by the Comptroller and Auditor General during our proceedings last week when he referred to the fact that we never challenged policy. Although we never challenge policy, it is often difficult to assess matters objectively when at some stage outside the Committee one has to consider the social implications of a report or of a line of questioning in the Committee.
1174 It was brought home to me most effectively when I went to Devonport following the questioning during the Public Accounts Committee's examination of that subject. While I was in Devonport, I sat in my hotel one night thinking about it. It struck me that the word "effectiveness" has all sorts of implications. It means many different things to many people. If we widen the arguments about effectiveness, to some extent we undermine that objective of public accounting in terms of being objective about the careful, efficient, effective and economic use of public resources. I draw attention to that because it has caused a dilemma in a number of reports, including the report on cost improvement programmes in the National Health Service. While we annually examine supply estimates and follow public moneys in the Public Accounts Committee, security service expenditure has never been questioned or examined by any House of Commons Committee.
I have seen with regret a report that an injunction has been taken out against a Radio 4 programme which examines whether there should be accountability to Parliament for security services expenditure and whether it could be introduced without undermining the security services. I do not intend to press that. Suffice it to say that I regret that the injunction has been taken out, because many people who made reasonable and sensible contributions based on the most objective assessments of the matter will now not be heard on that very wide-ranging programme.
I want to deal with one or two reports in a wider context. Cost improvement programmes are set out in the 47th report, entitled "Value for Money Developments in the National Health Service". In paragraph 6 we say:We noted that in 1981–82 DHSS called for concerted action at local level to achieve better VFM by setting annual target savings intended to increase efficiency. However, since the cash savings achieved were not necessarily a true indication of increased efficiency, from 1984–85 DHSS replaced these efficiency savings by CIPs. The purpose of the latter was to identify measures 'aimed at releasing cash or manpower used in providing a service by getting the same service output for a smaller input of resources'.We went on to say:In short authorities were required to carry through programmes aimed at making services more efficient and effective thus releasing resources for improvements and new developments. But services were not to be cut.In paragraph 9 we said:Since it is clearly of crucial importance to ensure that cuts in services are not passed off as genuine cost improvements …We went on to ask DHSS some more questions. I refer to what constitutes a cost improvement programme and whether it is fair to call it a cost improvement programme, despite the evidence given to the Public Accounts Committee by civil servants who invariably maintain that cuts are not taking place in the National Health Service;. The cost improvement programme work set by district health authorities for district hospitals has led to many reports by various organisations. I refer to the report of the Health Service managers to the Mersey region of the Institute of Health Service Management, which refers to a number of what can only be described as cuts.
If in pursuit of the efficient use of resources, pressing the principle of cost improvement programmes, all we get are the cuts outlined in the report, the cost improvement programmes are failing. The report quotes some examples in the Mersey health region:Withdrawal of night/weekend clerical cover in Accident Department; reduction in cooked meals to one per day; use 1175 of powdered milk for cooking in place of fresh; reduction of night catering service; reduction in range on menu; elimination of cooked meals at weekend and evenings; introduction of nominal charge for in-patient food; review and reduce cleaning frequencies in clinical areas; increased flexibility between domestic staff and nursing auxiliaries.Many cuts are being passed off as efficiencies brought about by the implemenatation of cost improvement programmes. The report refers to:Consideration of 5-day wards for gynae, surgery, ENT, obstetric; review and closure of satellite peripheral OPDs and centralise services; review level of attendances at immunisation and vaccination and other child health clinics; rationalise or reduce services; restriction of prescriptions to one week for patients being discharged; discontinue early discharge packs given to all maternity patients; return to traditional bedpans; withdraw contract shaving services to patients, now done by volunteers; provision by patients of their own talcum powder and dental cleaning materials; encourage maternity patients to provide their own nappies; remove nursing support from doctors undertaking school medicals.I will not go any further, but there is a whole list of what can only be described as cuts which are being passed off as efficiency savings under the cost improvement programmes of the National Health Service.
It seems to me that the language is all mixed up, and far more effective monitoring should be done by DHSS officials nationally of what is happening on the shop floor of hospitals. Hardly a week goes by when hon. Members do not express concern over reductions of services in their areas. Very often those reductions in services can be traced back to district health authorities and the excuse is the introduction of cost improvement programmes with a view to saving money. I suggest to the Ministers that those areas bear closer examination.
The 19th report on "Expenditure on Motorways and Trunk Roads" and the report on "Vehicle Excise Duty Evasion and Enforcement" relate to the failures of the Department on the one hand to gather revenue due to it and on the other hand to use revenue available to it for improving roads. In paragraph 19 of the report on roads and motorways we say:While expenditure on maintenance might therefore have been expected to take a larger share of the programme, it had in practice remained fairly constant at around 25 per cent, of total expenditure.We were worried that repairs were not being carried out, as the hon. Member for Scarborough (Sir M. Shaw) pointed out, which was causing arrears in road improvements, and that this was false economy because at the end of the day it would probably lead to increased expenditure. In paragraph 20 we said:To achieve value for money in road maintenance it is important to resurface at the optimum time, to prevent undue deterioration leading to premature reconstruction…A continuing failure to 'spend now and save later' would incur substantial additional real costs and there would be continued disruption, inconvenience and associated costs for industry and the travelling public…We consider it most unsatisfactory that maintenance of roads has been starved of funds for many years…and we note DTp's assurance that they will be able to clear the backlog on motorways within six years. But we remain concerned that they are less certain about the extent of the backlog on trunk roads, and the prospect for clearing it up.My view is that, despite the assurances, the backlog will become greater, in particular on trunk roads. Certain areas such as my constituency and vast parts of Scotland are covered not by motorways but by trunk roads. Such areas are reliant on a road network which, according to our 1176 report, may well further deteriorate as resources go elsewhere in the transport budget. As the figure of 25 per cent, remains fairly constant, how shall we get over that?
Let me make a prediction. The Department of Transport is involved in assessing the possibility of introducing tolls on roads. What alerted me to that was a conversation that I had with an official some three months ago. That led to me raising some questions with a Department of Transport official during the course of our proceedings last week when we were examining the burden of lorries on roads. He would not answer my questions. He would not be drawn on whether work was being done in the Department of Transport on tolls for roads or motorways in the United Kingdom. It is likely that within one or two years there will be a statement in Parliament on the introduction of some form of toll system on our motorways. It may not be too long before a person coming off the motorway at the Scratchwood service station is confronted by some sort of European style toll station to collect his pounds as he sets off on the motorway to Birmingham.
Unless the Government build support resources into their expenditure plans at this stage to deal with the backlog, particularly in trunk roads, they will be faced with the need to take a panic decision at some stage in the near future. That panic decision will be the implementation of work that is now being done in the Department on tolls on Britain's roads.
I want to deal briefly with what is happening in our prisons and with what I regard as a false economy. I do not want to deal with work done by prisoners or other matters that have already been raised; I am referring to conditions in prisons, and how bad conditions in prison have the effect of alienating people so that they are not properly rehabilitated. The persistent alienation of people in Britain's prisons has adverse implications for society when they are released. That is particularly true for public expenditure because crime costs money and has implications for policing.
Such matters may appear remote, but if Britain is to have a proper prison service its objective must be the real rehabilitation of people and that costs money. Someone somewhere must work out the relationship between the benefit that derives from an efficient and properly managed and funded prison service with the objective of rehabilitation and the cost and crime implications if no action is taken.
I brought out one simple statistic during the course of my questioning which was the subject of a further memorandum to the Department. We were talking about what we call slopping out in Britain's prisons. We were told that there were 41,200 certified places in British prisons today, of which approximately 22,000 have neither integral sanitation nor some means of access to sanitation. Because of the overcrowding of the cells, the average number of sloppings out in 1985 was about 26,000, out of an average total prison population of 46,200.
We then went on to talk about the modernisation programme and it was said thatOn the basis of the building schemes at present in progress or planned, there will be just under 20,000 places in 1991 still lacking access to sanitation"—that is nearly half.
By 1999"—in 12 years' time—that number will have fallen to about 15,600".1177 That means that by 1999, the end of the century, one third of Britain's prisons population will still be slopping out.
This might appear an ugly subject to raise during our debate, but it is a sign of the problems in our prisons. If as part of their so-called rehabilitation prisoners will still have to slop out in 12 years' time, the economies are false. We are not pursuing a realistic policy of rehabilitation that has future public expenditure implications for the Government, and, in particular, for their law and order policies.
Finally, I want to raise what I regard as a cause celebre on which I spent a lot of my time some 15 months ago. Indeed, over the past year a number of new cases have been brought to me. I am talking about whistle blowers and their role in identifying those defence contractors who are cheating the taxpayer by overcharging for their services where people—as in the case of Mr. Jim Smith, to which I am about to refer—lose their livelihood and in effect ruin their lives because they have stood up for a principle.
It is now several years since I raised the question of Mr. Jim Smith, a former employee of Aish and Company of Poole, major defence contractors at that stage employing some 2,000 people and a subsidiary of the Horstmann group. Mr. Smith alleges that he told Ministry of Defence officials in 1981 that his company was overcharging the Ministry of Defence. He has spent every year since 1981—I have spoken to him again today—trying to prove that his whistle blowing led to a saving to the taxpayer of over £1 million, £400,000 of which was repaid by that company.
The whole saga of the Smith affair is one of delay, denial and the direct misleading of Parliament by civil servants. I am talking not about officials who gave evidence to our Committee but about officials who made reports to their senior civil servants in the Ministry of Defence. There are four and they were identified by me during the proceedings of the PAC when I raised this matter with Mr. Haig, a civil servant whom I was questioning.
In evidence submitted to us, the MOD maintained that it first became aware of the extent of the profits earned by the firm as the result of a meeting with the company, held at its instigation in March 1982. Mr. Smith denies that. He maintains that he informed the Department.
The whole case seems to turn on the simple question whether Mr. Smith communicated to the MOD in that period following his dismissal information which would enable the MOD to establish whether excess profits had been made. It is my view that he did and that Mr. F. C. Brady, the principal director of MOD accountancy services, Mr. Alf Blyth, the former head of MOD contracts policy branch, Mr. Harry Turner, the former assistant director of MOD accountancy, Mr. Frank McGrath, a senior member of the MOD cost department, Mr. D. B. Cox, the director of contracts at the MOD and Mr. A. J. Figes, principal director of navy contracts, and Mr. George Haldane, the MOD accountant at Aish, all know the truth. They all know what happened.
Mr. Smith supplied to me at my request a sworn affidavit setting out his case and I presented it to the PAC, which then asked that those particular civil servants should be asked what happened. It was interesting to note the evasive way in which they replied and, if they were not evasive, the way in which they set out to deny the truth. I choose my words carefully. Perhaps they thought that 1178 their jobs would be on the line, if they were still employed—or their pensions, if they had retired—were they to make open and honest statements. I appeal to them, even at this late stage, to come forward. While they refuse to tell the truth, Mr. Smith does not find work, and he and his family are continually pressed, by these matters. Yet they know that he is supported by a series of first-class character references, including one from within the Ministry of Defence.
In my view, the Smith affair has not ended. His example led to further whistle blowers surfacing in the form of Mir. Don Pitman of Thorn EMI and Mr. Burgess-Cooper of Doughty Rotell, who similarly had a squalid deal, although the Public Accounts Committee said in its 25th report that the MOD should give the fullest consideration to such people. In the Treasury minutes in reply, the MOD said it would always be prepared carefully to consider any information furnished on such matters, and the circumstances in which such information was furnished. Yet, in the case of Mr. Burgess-Cooper, a substantial repayment—in the sum of £400,000, I am told—was made to the MOD. Mr. Burgess-Cooper is unemployed and cannot find work.
What will happen to such people? Are they to remain unemployed for the rest of their lives? Are they never to be compensated? We now have the case of Marconi. We have two whistle blowers in this instance. Some hon. Members may know who they are; certainly the MOD knows. I believe that the information provided by whistle blowers in the case of Marconi may well save the country not millions, not tens of millions, but hundreds of millions of pounds. Those are substantial amounts, and I believe that, when people are willing to surface in this way—to prejudice their lifestyles and the position of their families, and often lose their homes—they deserve very special consideration by the MOD.
I am calling for the implementation of the recommendation in our PAC report, which was approved of in a Treasury minute. Those people are out there setting an example for others. If they are protected, others will come forward in other areas of procurement, be it the National Health Service or defence.
§ Mr. Peter Thurnham (Bolton, North-East)
Will the hon. Gentleman make clear what he is proposing? Is he proposing that whistle blowers should be paid a bounty—a percentage of what they bring in?
§ Mr. Campbell-Savours
I am proposing what is proposed in the PAC report: that when people surface to give information, the position should be carefully considered, and compensation should not be ruled out if a loss of livelihood is involved. I think that that is a very fair proposition.
§ Mr. Peter Thurnham (Bolton, North-East)
I congratulate the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) on the work of his Committee. I am not sure whether I should congratulate him or my right hon. Friend the Leader of the House on having chosen tonight for the debate. I was told by the staff in the Vote Office that the cost of each set of papers needed for the debate was some £380. By choosing a night when there are not so many hon. Members in the House, my right hon. Friend must already have contributed a fair amount of savings to the public purse.
1179 I enjoyed the contribution of my hon. Friend the Member for Rutland and Melton (Mr. Latham), who pointed out that, when things go wrong, heads may well have to roll. I am sure that all hon. Members will wish to commend the work of the outgoing Comptroller and Auditor General, who is in a privileged position. His head does not roll, or at any rate does not roll easily, as I discovered when I first arrived in the House, and was rather surprised to receive a freely distributed glossy brochure containing a colour photograph of the Comptroller and Auditor General. He described himself in the brochure as the public's watchdog against waste and extravagance. I have not seen a repetition of that coloured brochure, so perhaps my demand for his head on that occasion at least achieved a slight reduction in future costs.
Before I comment on the 44th report, let me briefly mention the 19th. I am not sure whether the Committee is aware that the Department of Transport proposes to alter the role of the professional engineer in determining the cost of contract variations. I feel that the Government should take great care in proposing any changes in the system, which could well cost rather more than they are attempting to achieve in savings. We have already heard about unfortunate episodes of corruption in the Property Services Agency. The less that civil servants have to do with the detailed negotiation of contract variations and with the execution of engineering itself, the better, in my view. I feel that there is much to be gained from sticking with the traditional method of working, as at present.
The 44th report covers preventive medicine. The right hon. Member for Ashton-under-Lyne spoke of costs of £600 million. The report calls for more cost-benefit analysis, as mentioned by my hon. Friend the Member for Northampton, South (Mr. Morris). In their reply, the Government said that it was difficult to make a cost-benefit analysis. However, let me draw the attention of the House to the White Paper promoting better health, which very opportunely came out last week. Paragraph 1.9 lists many of the benefits from previous preventive campaigns. It mentions smallpox, diphtheria and tetanus as former killer diseases which have been virtually eradicated, and states:The danger from polio has almost gone and great advances have been made in the fight against tuberculosis…perinatal mortality has fallen by 46 per cent, in the last 10 years…On dental health…nearly half of all children under five years old now have no decay at all.Perhaps a little analysis could be made of the value of those benefits, as a start in trying to evaluate the cost-benefit analysis of further preventive medicine work. I do not believe that it is as difficult as was made out in the report.
The White Paper goes on to say that a massive amount can still be done to reduce the incidence of disease, and quotes a number of causes of illness:a quarter of young people are overweight…alcohol is a factor in 1 in 3 of all attendances by men at hospital accident and emergency departments…100,000 deaths each year caused by smoking".On coronary heart disease—
§ Mr. Thurnham
I have been quoting from the recommendations of the 44th PAC report, which calls for 1180 cost-benefit analysis on preventive medicine. The Government's response, both in the original papers with which we have been provided and in the White Paper, draws attention to the benefits that result from greater preventive measures.
Let me refer more briefly to the Government's response concerning deaths from coronary heart disease. We were pleased to have a visit in Bolton from my hon. Friend the Parliamentary Under-Secretary of State for Health and Social Security, although we wondered what headline the paper might use. Perhaps she had the "Look After your Heart" campaign in mind when she was asked whether she had smoked as a schoolgirl, and replied that she had been too busy reading "Lady Chatterley's Lover"—which, of course, provided the headline.
The challenge now facing the Government is to change the emphasis in the National Health Service from illness service to true health service, offering help to prevent disease and disability. The Chairman of the Public Accounts Committee referred to two aspects of the Committee's report. First, he stressed the importance of the cervical cancer campaign. Secondly, he referred to the need for higher immunisation rates for rubella, measles and whooping cough. Page 14 of the White Paper shows that measles and whooping cough immunisation rates have risen from under 50 per cent, in 1976 to approximately 70 per cent, in 1986.
I ask the Government to give more help to those who suffer after immunisation has gone wrong. Whooping cough immunisation can lead in a small number of cases to severe brain damage. The right hon. Member for Ashton-under-Lyne referred to a distressing constituency case that relates to the cervical cancer campaign. During the election campaign I met a constituent of mine, Mrs. Sharrock, of Archer Grove in Tonge, who has to care for a daughter very severely affected by brain damage caused by a whooping cough immunisation that went wrong.
I ask the Government to ensure that such people are better provided for. They should be more generous in compensating the victims of such accidents. That would encourage more people to be immunised and would lead to greater benefits for us all. If an accident can be attributed to negligence and it leads to a court case, damages amounting to £500,000 might be awarded. As it is, those who have suffered an accident such as this are obliged to manage on a very small sum of money, although they are coping with severe difficulties and very great burdens.
It is important that more people should be immunised against rubella. A Bill is to be introduced by the hon. Member for Liverpool, Mossley Hill (Mr. Alton). If abortions cannot take place after 18 weeks, many more handicapped children will be born. My research shows that there are up to 3,000 severely handicapped children in residential care. Their natural parents are unable to cope with the severity of their children's handicap. It is nonsense to suggest that parents are queuing up to adopt or to foster such children.
One of the most important tasks for the Government is to make people more aware of the benefits of preventive medicine. Page 26 of the report states thatAdding fluoride to water supplies is a safe and effective way of reducing dental decay and the need for fillings. The benefits of fluoridation, which extend into adult life, are greatest for children, particularly those in deprived areas".Much more should be done to promote such benefits.
1181 In areas such as Bolton a minority of people are nervous about the effects of fluoridation. They believe that fluoridation poses unknown or even real hazards, with the result that they campaign against fluoridation. In some parts of the country, people have voted against fluoridation. If the White Paper is right and fluoridation is safe, more should be done to allay their fears.
On 25 November my hon. Friend the Minister for Health said that he would be negotiating with the medical profession for improved services in inner-city areas. He also said that primary health care services in some of our inner city areas are very poor. This is the single most important measure that the Government could introduce to improve health care in such areas. Therefore, I urge the Government to do all that is in their power to promote the advantages of preventive care and to provide additional facilities and assistance to both general practitioners and dental practitioners.
§ Ms. Hilary Armstrong (Durham, North-West)
I wish to raise a case in my constituency that highlights the 25th report of the Public Accounts Committee on the prison building programme. This case highlights the problems that were referred to in that report. I refer to the strategic planning procedures and the failure of the Home Office and the Property Services Agency over the design and the refurbishment of prisons.
In my constituency there is Medomsley prison. The first week after I became a Member of Parliament in June of this year, I was told that the designation of that prison was to be changed from a detention centre to a category C prison. In October 1987, I was notified that the newly designated prison was to be closed. That prison has now been closed.
When I visited Medomsley prison on 26 June, I saw that a large amount of public money had been spent on bringing it up to date. Work continued after my visit to bring that building up to standard and to ensure that it was fit to be used as a category C prison. However, Medomsley prison has now been closed. The long-term future of that prison has not yet been decided, so work on it has continued. There are rumours—I stress that they are rumours, which I heard only this afternoon, so I have had no opportunity to check them—that the prison was visited yesterday by a Home Office official who gave instructions that no more money was to be spent on the work in hand—a new kitchen block—and that therefore the work should stop. If that is so, the problems that have been highlighted in this report are compounded by the example that I have just given.
We are entitled to inquire, therefore, whether public money has been wasted. According to this report, the Home Office gave evidence that it was on top of its general planning. We must ask whether the Home Office's general planning has been as effective as it led the Public Accounts Committee to think. Furthermore, we are entitled to ask whether there is a strategic plan, which includes Medomsley, or whether the prison service and the Home Office are reacting hurriedly, precisely because the planning has been far from adequate.
I am worried about other matters that affect my constituency. Medomsley prison has had a fair amount of support from people in the locality. It is an area of high unemployment, and jobs are at a premium. I hope, therefore, that my fears are unfounded and that there are 1182 long-term plans for that establishment. As a considerable amount of public money has been spent on it during the last few years, I hope that the assurances that were given to the Public Accounts Committee about the prison building programme will be reaffirmed in the case of Medomsley prison.
§ Mr. Deputy Speaker (Mr. Harold Walker)
Order. Several hon. Members are seeking to catch my eye. The spokesmen on the Government and Opposition Front Benches would like to reply to the debate at about 9.25. The arithmetic is fairly obvious—approximately 32 minutes.
§ Mr. John Watts (Slough)
I intend to confine my remarks to the 45th report of the Public Accounts Committee, on the financial control and accountability of the Metropolitan police.
The efficiency of the Metropolitan police has implications for other police forces outside the Metropolitan area. The Home Secretary determines the national limit on police manpower. He also decides whether there is to be an increase in police manpower within the overall national limit. During the last eight years there has been a substantial increase in police manpower, reflecting the high priority that the present Government attach to law and order. Thanks to the restructuring of police pay, police forces are typically close to their approved establishment levels. There is no longer the acute difficulty in recruiting and retraining police officers that was experienced before 1979.
As my right hon. Friend the Home Secretary said in reply to a question from me earlier today, the Thames Valley force, which is the force of particular concern to me, has enjoyed the largest increase of any force outside London over the past few years. Since its formation in 1968, its manpower has increased by 507, or 17 per cent., but the population that it serves has increased by more than 23 per cent, in the same period. Consequently, the ratio of police to population in the area, starting from a low base, has continued to deteriorate and remains the worst in the country. On any other criterion of measurement, whether it be area to be policed, levels of reported crime, road mileage or accidents reported, the Thames Valley force is substantially under strength.
§ Dr. Alan Glyn (Windsor and Maidenhead)
Does my hon. Friend agree that we have a peculiar security problem with regard to the number o f special people that the force has to protect?
§ Mr. Watts
My hon. Friend makes a powerful point, because not only under normal criteria is the force under strength, but it has additional duties because of royal residences and duties with regard to my right hon. Friend the Home Secretary.
On a mean average of those criteria, the force would need an extra 781 officers to raise its establishment to the average of other provisional forces such as Hampshire, Sussex, Kent or Essex. That is why I strongly urge my right hon. Friend to approve the application for 200 additional officers this year and 700 over a period of four years, which the authority has requested.
The force is in the forefront of civilianisation—trying to release police officers for front-line policing duties by 1183 substituting civilians. It was my knowledge of the Thames Valley police and the importance of civilianisation in this process that led to my interest in the conclusions of the PAC's report about the process of civilianisation in the Metropolitan police. The report tells us that between 650 and 750 posts fall into the category of jobs occupied by police officers that do not require any police training or powers. The report says that, in addition, the Metropolitan police have identified functions carried out by a further 600 or 700 police officers that appear to be suitable for contracting out or transfer to other agencies. Thus, that substitution of civilians for police officers would enable my right hon. Friend the Home Secretary to approve an increase in the establishment of the Thames Valley force, which would bring it up to the average of its peer group.
I am neither so naive nor so parochial as to expect that, even if those 1,400 police officers in the Metropolitan police were released by civilianisation, the extra 700 that we want in the Thames Valley force would automatically be provided. My right hon. Friend will have to consider all demands for increased manpower, including those of the Metropolitan police, and allocate increased establishments in accordance with objective priorities.
Wearing his other hat as the police authority for the Metropolis, my right hon. Friend should be asking himself why so much scope for civilianisation remains within the Metropolitan police. The report tells us that as at 31 December 1984 the approved establishment of the Metropolitan police was a little over 27,000. Of that number we are told that 1,400—nearly one in20—were engaged on duties that did not require the use of trained police officers; not only that, but at double the cost of employing civilians to do those tasks.
I cannot accept that policing in my constituency and throughout the Thames Valley area is so overstretched, while 1,400 officers in the Metropolitan police are used for duties that could and should be discharged by civilians. Until full advantage is taken of the opportunities for further civilianisation in the Metropolitan police, it would be wrong of my right hon. Friend to approve any further increases in its manpower.
The report shows that since 1983–84 only 372 posts have been civilianised in the Metropolitan police. The target for 1986–87 was for a further 150 posts to be civilianised. At this rate, it will take nearly 10 years to mop up the existing scope for releasing police officers for proper policing duties by taking on civilians in their place.
For those reasons, I fully support the PAC's conclusions. The House is indebted to it for drawing attention to this scandalous misuse of trained police manpower and the deplorably slow progress that is being made in advancing the process of civilianisation.
§ Mr. John Garrett (Norwich, South)
I must confess that I am speaking as a PAC watcher for the past 20 years, reading virtually every one of its reports and following its every development with the closest interest. It is a fascinating subject to study and it is nice to have a sector of research all to oneself.
I recently served on the PAC for a month or so—technically, I am still a member—although other duties forced my resignation. I greatly enjoyed my membership 1184 and was very reluctant to leave. I hope that it will not be considered patronising if I say how impressed I was by the high calibre of the membership and interest of the PAC, which must be the best ever.
In the past, the PAC was a backwater, but today it is a major instrument of parliamentary rights. The present PAC is blessed with a Chairman who is not only highly effective but actively involves other members of the Committee. I can remember watching the Committee in the past from the public seats and it was very much a Chairman's Committee; other members hardly got a look in. But today it is a much more actively engaged Committee, and credit for that should go to my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon).
I wish to address my remarks to general issues of the conduct of the Committee. They are illuminated by three reports: House of Commons 115, December 1986, "National Audit Office Estimates and Corporate Plan"; House of Commons 98, March 1987, "Financial Reporting to Parliament"; House of Commons 61, April 1987, "The Financial Management Initiative". I select those because they concern the way in which the PAC and the National Audit Office operate and the powers of scrutiny of the PAC with regard to Government.
I came to the conclusion as long ago as 1968, after serving with—no, for—my right hon. Friend on the Fulton committee on the Civil Service, that there was something seriously wrong with public accountability in this country. I concluded that Parliament's machinery—at that time the PAC and the Exchequer and Audit Department—was sadly out of date, was controlled to a wholly unhealthy degree by the Treasury and that no one cared very much about the situation. I will not bore the House with details of the 15-year campaign that followed, which culminated in the National Audit Act 1983, introduced by the former right hon. Member for Chelmsford, Mr. St. John Stevas. The right hon. Gentleman is now a noble Lord, but his title escapes me.
The National Audit Act 1983 received its Third Reading on my final day as a Member of Parliament prior to what I have come to call the wilderness years. It gave the PAC and the National Audit Office independence of the Treasury and all the powers it needed apart from powers to investigate nationalised industries. The opposition to the inclusion of the nationalised industries from some chairmen and trade union leaders was profoundly anti-democratic. No doubt the House will return to that matter.
The PAC is now successfully carrying out its new and enhanced role, as established in the 1983 Act. However, I have a few misgivings about the way in which the state audit system works and some proposals for its development. I will begin with my misgivings.
I have no doubt that the Treasury would like to reclaim its influence over the PAC and the National Audit Office. We must still be vigilant, in view of that threat. I read a Treasury paper only the other day which boasted about the Government's efficiency scrutiny programme and somehow managed to work in a mention of similar work carried out by the PAC. When I read such references, I know that the Treasury tiger is slinking around the perimeter fence and we must be very vigilant. The Treasury would very much like to supervise the National Audit Office closely, especially its staffing, numbers and 1185 grading arrangements. I believe that the Treasury should have no locus in that matter and control should rest with the House of Commons Public Accounts Committee.
I believe that the PAC produces far too many reports. It produced 34 in 1986 and 19 between January and July 1987, the period under consideration. Most of the reports are good, but too many are superficial. We are getting close now to one report per Committee session—50 a year or more. There should be far fewer reports, but the reports should be in greater depth.
No other Select Committee has anything like the work load of the PAC. There is a case for increased personal assistance and research assistants for PAC members who have to examine senior officials and their senior staff who are always specialists in the matter upon which they are being examined. It is true that the Comptroller and Auditor General and his staff have served the PAC satisfactorily. However, Committee Members, given the importance of the Committee, which is after all the senior Select Committee of the House, should have personal research assistants to enable them to discharge their duties.
I believe that the PAC and the NAO still concentrate too much on financial control and give too little attention to the effectiveness, result or impact of public spending programmes. The typical PAC report is still about some colossal cost overrun on weapons procurement, building or some other project and not about the social impact of programmes or the results achieved by a given programme. We can all understand why the concentration is on overspending. There is so much of it, the sums involved are so large and the consequences are so obvious. A number of such reports on torpedoes, dockyards and prison buildings have performed a valuable public service.
However, I would like to see much more examination of all those inner-city programmes and the spending programmes from four or five Departments aimed at people living in inner cities to see whether they benefit people living in those areas so we can decide which programmes are more effective than others. That may trespass on the area of the merits of Government policy, but I do not see any harm in that.
Moving to more contentious areas, I believe that the NAO should occasionally compare the provision of public services with the need for such services. For example, what is the gap between what can be objectively established as the need for preventive medicine and the present level of provision? What are the service levels for customers in DHSS local offices, and what should they be to meet the needs of the local population?
The Comptroller and Auditor General's evidence in House of Commons 115 states that assistant auditors are recruited direct from university and trained by the Chartered Institute of Public Finance and Accountancy. While it is right that a large proportion of NAO staff should have accountancy qualifications, I believe that recruitment should be widened. If the move is towards studies of the effectiveness and result of spending programmes, the NAO should recruit scientists, engineers, doctors, lawyers, and economists. That is the practice in the General Accounting Office in the United States. My experience in not too dissimilar work in management consultancy has shown that the best discipline for investigatory studies is civil engineering. Accountancy in this country at least is far too narrow a discipline to be effectively used exclusively for audit staff.
1186 In spite of my misgivings about the system, I believe that new avenues are opening up all the time for increasing the effectiveness of state auditing. All over the world, state audit bodies are expanding their range of inquiries. We need not go so far as the People's Republic of China which is now training 30,000 new auditors in 43 training centres and a further 20,000 by television, but I have the impression from reading the publications of the International Organisation of Supreme Audit Institutions that throughout the world audit is developing into a very important arm of legislature.
Where do we go from here in the British state audit system? The amendment in the name of my hon. Friend the Member for Nottingham, North (Mr. Allen) provides us with the opportunity to discuss the way in which the House handles PAC reports. An allocation of three days; seems reasonable, given the time that we spend on other matters and the length of the parliamentary recesses. Our suggestion for debates on motions could have risked turning PAC meetings into adversarial combat were it not for the device that we have inserted proposing the prior discussion of motions with the Government. The proposal is very modest, but would add weight and legitimacy to the recommendations of the PAC.
Opportunities for developing the scope of our audit system are provided by the useful report on financial reporting to Parliament. There would be great advantage in combining Supply Estimates with public expenditure programmes—just as other organisations have a one-year budget and a multi-year corporate plan. The Government should produce a standard format for the aims, objectives, performance and outputs for public expenditure programmes. A system of performance indicators is required for every estimate and programme, and it is now technically feasible. Such indicators should be incorporated, as the report suggests, in an annual report for every Department of State.
The report on the financial management initiative could also usefully provide the Public Accounts Committee with a means of examining the performance of Government Departments. The financial management initiative, a. concept lifted from the Fulton report, has been grossly over-hyped by the Government. I shall not detain the House with a lengthy description of it, but it is basically a system of management by objectives, combined with a budgetary control system. It divides the Departments into commands, the heads of which have budgets and one day will have objectives and measures of performance.
The PAC rightly commended the system, but it did not say what it would do with the new source of information. In every inquiry from now on, the PAC should demand to see the financial management initiative documents relating to the matters that it is examining, so that it can evaluate what the Civil Service manager was aiming to do, what resources he or she controlled and what, in the Department's eyes, was the performance of the unit under command. In that way, the PAC could examine not only the management of a programme externally but what the Department expected of the programme and its management.
There is one development that the PAC has never touched on. I spoke earlier of the financial management initiative, which is a financial control mechanism. Soon after introducing the FMI, the Management and Personnel Office introduced a personnel work action programme which was intended greatly to advance 1187 personnel management in Departments by improved training and appraisal arrangements. The PAC should inquire into that.
The PAC always examines financial resources. Why does it not examine human resources and the use that Departments make of people? After all, human resources represent by far the greatest administrative cost. The Civil Service is still very poor at personnel management; it wastes talent and fails to make the best use of its human resources. There is nothing in the PAC's terms of reference to prevent it from examining that crucial aspect. There is great scope for the PAC to examine the use that the Departments make of their people.
All in all, since the 1984 Act the PAC has become a great success. I pay tribute to Sir Gordon Downey's work for it. The PAC could be developed in a number of ways to which I have referred. It must always be pushing forward against the boundaries with which the Treasury would like to circumscribe it. I may say that all the reports of the PAC ultimately indict the Treasury. Cost overruns and financial maladministration are found so often that one is entitled to ask what those at the Treasury who were supposed to be supervising matters were doing. They sit at PAC meetings and keep quiet on such issues.
The PAC is an essential arm of parliamentary accountability, and it has an open road ahead of it. Too often in the past the House has been supine in enforcing its rights. The PAC can be the prime vehicle for asserting parliamentary rights over the Executive.
§ 9.9 pm
§ Dr. Alan Glyn (Windsor and Maidenhead)
I join hon. Members on both sides of the House in commending the work of the Public Accounts Committee and especially commend the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), who has chaired it with considerable distinction. After all, it is not only the most senior Select Committee but it is our constituents' watch-dog over the Executive and expenditure. One of the most important functions of Committees of the House is to see whether the money is wisely spent. I pay great tribute to the Committee.
I refer briefly to the Committee's report. Perhaps the failure of the roads programme is a little greater than the Committee has said. In two respects, there was a lack of foresight in our roads programme. First, there was a failure to assess the amount of traffic, which has increased in line with the increase in affluence. Secondly, there was a misappraisal of axle weights and their impact on the roads. It is not a matter of three or four highways, but of increased weight, which was particularly caused by our European colleagues. Such factors were never considered in time. They led to the construction of roads without sufficient foundations. We are now seeing the results of cracks in road surfaces.
The Committee did excellent work in respect of preventive medicine. Many previously fatal diseases have now been eliminated. Here I take issue with the hon. Member for Argyll and Bute (Mrs. Michie). Glaucoma should be detected by a general practitioner, not necessarily by an optician. That is a small matter of detail.
It is not for me to advise the Committee, but perhaps it should examine the whole structure of the National Health Service. Do we need as many tiers of authority? For 1188 example, I refer to regional health authorities. Health services were probably better administered when there were hospital governors and local administrations. There is only one snag, and that is that the expensive items of equipment that are required in modern medicine can more easily be found in large organisations. Of course, it is much easier for civil servants and Ministers to administer a large organisation. Nevertheless, the structure of the NHS needs to be looked at, in particular the number of people who work on the executive side and not on the practical side of it. It will take a number of years; it cannot be done overnight. We should start to look at it now.
On two occasions, my hon. Friend the Member for Slough (Mr. Watts) drew attention to the police. I shall not enlarge on his remarks, except to say that we need extra manpower. We found that we did not have enough police even to deal with the Hell's Angels problem or the pop festivals.
I now refer to the 50th report dealing with vehicle excise duty. We all walk along streets and see vehicles without licences. What do we do about it? How do we enforce the law? Now that we have centralised computers, it is possible for traffic wardens to see whether a car is licensed. They need not proceed if the licence has been lost or stolen. However, if they find that the vehicle is not licensed, the proper thing is not to wheelclamp the vehicle, because that only serves to block the traffic, but to take it to the pound. If it is then found that the vehicle is not properly licensed, the fine should be increased to £200 or £300. It is no good fining people only £40. They should pay at least £200. Hon. Members of all parties agree that the fines are derisory and should be increased.
The action that would penalise most would be to have the car towed away and for the owner to be unable to redeem it until the fine has been paid. An offender should have to pay the cost incurred in keeping the vehicle while the prosecution procedure takes place. If a person has made a mistake, not having a licence displayed would be an offence, but the fine should not be imposed.
We are losing an enormous amount of revenue by this offence. Furthermore, if one does not have a current licence, insurance is usually involved. Most insurance companies would say that if one does not have a vehicle licence, one cannot be insured. A person who causes an accident and who does not have a licence would not, therefore, be insured, with all the ensuing awful complications.
The penalties for evading vehicle excise licence should be severe, especially now, when the number of road accidents is increasing. The penalty should be made effective and expensive. Mr. Deputy Speaker, I have been watching the clock closely and, with your leave, will conclude my remarks.
§ Mr. Graham Allen (Nottingham, North)
I claim the privilege of being the first Back-Bench Member who has been told to hurry up with his speech so that the Front-Bench spokesmen can have sufficient time. I believe that that has never happened previously in PAC debates. Therefore, I am happy to claim that privilege.
§ Mr. Deputy Speaker (Mr. Harold Walker)
Order. I do not recall having given the hon. Gentleman any such advice or instruction.
§ Mr. Allen
Certainly not, Mr. Deputy Speaker. I refer to advice given by friends and colleagues of all parties.
The debate is a reflection of the growing importance that attaches to expenditure and to the scrutiny of expenditure in this House. For far too long that has been a most unglamorous subject, although it has necessitated hard work by the Chairman of the PAC and his colleagues, which has been unsung but essential. I should like to join my hon. Friends in paying tribute to the work done by the PAC, which performs a great service for the House.
Any comments that I make about the need for change or reform excludes the PAC. Indeed, the light that the PAC has shed has helped to show the areas that need further examination. Its example serves to inspire the demand for even greater change and scrutiny in the House. Parliamentary democracy is dependent on control, or at least on scrutiny, of finances. Without that, any attempts at policy control are limited and an apparition or an illusion. Unless there is oversight of money so that policy priorities can be realised and policy decisions implemented, I am afraid that we are chasing a ghost and deceiving ourselves.
It is unfortunate that, perhaps, there is an unwitting conspiracy between hon. Members who do not regard the control and scrutiny of finance as important and who, therefore, are not present tonight in the numbers that we would wish, and the Government—not this Government, but the Executive in general—who would rather not have the irritation or occasional embarrassment of proper scrutiny on behalf of the House. The work that the Public Accounts Committee has done and the extension of that work with the National Audit Office—and again I pay tribute to colleagues on both sides of the House for the work that they have done—can show the way in terms of extended accountability to this House in the future.
I would like to make several points and float some ideas that I hope could be considered at some time by those who sit on the Treasury Bench or on the PAC itself; perhaps the Select Committee on Procedure could make certain proposals on how the House itself could exercise control over the process of financial accountability and scrutiny. I have in mind, first, the areas that are not at present scrutinised by the House and certainly do not come under the watchful eye of the PAC. Hon. Members have referred in some instances to fairly minor areas, such as the security services, and other, rather larger areas such as the nationalised industries, or even the area of Government loans, for example, which escape effective monitoring by the House. We should extend the scope of the monitoring, even though we are constantly engaged in a battle of vigilance to retain the areas that currently come under review.
Then there is the way in which the House itself finds time to debate particular reports, not just those of the PAC but the reports on Estimates which are considered by departmental Select Committees. The departmental Select Committees themselves, on a wider issue, could perhaps bear scrutiny when it comes to debating reports and the use of parliamentary time: 565 reports have been written by departmental Select Committees since 1979 and only six have been brought to this House for debate on substantive motions. Votes have taken place on only four. A great deal of progress could be made there. But debating time has been eroded. The Consolidated Fund Bill is often suggested not as another opportunity for exercising 1190 financial accountability and scrutiny but as a debate in which one can raise constituency problems—and there are, sadly, a number of hon. Members who have even abused the good will of the Chair tonight in raising particular, specific constituency issues rather than addressing broader PAC matters which would have been of greater benefit to us all.
I would like to reinforce the point made by my hon. Friend the Member for Norwich, South (Mr. Garrett) about correlating the various documents put before the House on public expenditure and Estimates. That ties in with the reporting and debating cycle of the House.
There is a great deal more basic organisation that could be done to bring forward decisions in the House, and that is another area where we could look for improvement and change.
I apologise to the hon. Gentleman the Member for Scarborough (Sir Michael Shaw) for having to leave during his contribution, but I understand that he floated the idea of televising the proceedings of the Public Accounts Committee. My own view is that, while we should indeed televise the Chamber, far more important is that we televise Select Committees and, even more important, that we start, if that is the option, with the PAC. The Congressional committees have proved the effectiveness of that. While it may not be the sort of popular television that rows during Prime Mininster's Question Time might generate, democracy would be greatly assisted if a Minister or a senior civil servant were questioned by the PAC in some detail. That would benefit both the viewer and the House and enhance hon. Members' views of the role and responsibilities of the House.
§ Mr. Allen
I promise you, Mr. Deputy Speaker, that I will not go on until 10 o'clock.
My hon. Friend the Member for Norwich, South (Mr. Garrett) and myself tabled an amendment—unfortunately it was not called—that recommended that three days should be set aside to debate PAC reports. We do not want a general debate on the PAC reports as we have had tonight. Tonight's debate has reminded me of Desert Island Discs—"Pick your seven favourite reports and at the end, if you are stranded, pick the one that you would most like to read." We would prefer an in-depth debate on specific reports that would require the House to make a decision. A debate upon such reports could be decided upon after negotiation with Government Ministers. The debate could be on a substantive motion, perhaps regarding a major financial scandal, Government abuse or some other pertinent, urgent matter. Such debates should take place in the House within three months of the publication of the PAC reports.
My hon. Friend the Member for Norwich, South and I also believe that, rather than taking note of a number of reports as we are tonight, we should put before the House a substantive motion requiring a decision. Again, that should not be considered as an attempt to break down the consensus in the PAC. On the contrary, it would build 1191 upon that consensus. The PAC could put a proposal privately to the Minister, negotiations could take place and a decision could be taken ultimately by the House.
I apologise for rushing through this speech. There are a number of other matters that perhaps will be elaborated on other platforms. I am grateful for the time that I have been allocated at the end of this important debate and I wish to conclude by paying tribute to the work of the Chairman and my colleagues on the PAC for their work. I hope that the House respects that valuable work and I believe that the country is all the better for it.
§ Mr. Nicholas Brown (Newcastle upon Tyne, East)
This has been a decent and good-natured debate and that reflects the approach that the House wishes to adopt to matters of this kind.
As is traditional for the Front Bench spokesmen of both sides, I wish to express my thanks and gratitude to the PAC, and particularly to the Chairman, my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), for his work over the past year and a bit—June 1986 was the last time we were able to discuss these matters in the House. My hon. Friend the Member for Swansea, East (Mr. Anderson) made the nicest point when he said that the best tribute that was paid to my right hon. Friend was when the hon. Member for Scarborough (Sir M. Shaw) almost inadvertently referred to him as "my right hon. Friend". That reflects the approach that we wish to adopt to these matters. After all, we are all concerned with the two main areas of the Committee's responsibilities—its certification work and what its Chairman has described as the "value for money" side of its activities.
My hon. Friends the Members for Norwich, South (Mr. Garrett) and for Nottingham, North (Mr. Allen) both made important points about the functioning of the Committee and the way in which it relates to Parliament. My predecessor in this role, my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis), said in last year's debate that thanking the Committee was not just a matter of form because public audit and public accountability were important to Parliament and to the integrity of our system of government. My hon. Friends repeated that sentiment with considerable force.
The Committee has sought to highlight five reports. If time allows, I should like to refer to a number of the other reports, but it would be discourteous to the Committee not to refer to the five reports that it wishes to highlight. Two of them come within the sphere of the Department of Transport, two within the sphere of the Home Office and one within the sphere of the Department of Health and Social Security.
The 50th report dealing with vehicle excise duty evasion and enforcement makes an easily discerned and straightforward point. The Committee calculated that 2.2 million people—too many—are evading payment of the duty, and methods of enforcement are proving insufficiently effective. The cost of evasion is calculated at £100 million a year, and the Committee makes the simple but telling point that if the tax is £100 and the average fine for non-payment is £47, there are those in our society who will be tempted into taking a chance on evasion.
I acknowledge that the Home Office and the Magistrates Association will be asked to review the present 1192 position. I note that Sir Alan Bailey told the Committee that with about 300 extra staff he could raise another £1.7 million. It might be more effective if the Treasury were asked to review the nature of the tax. My hon. Friend the Member for Swansea, East makes a strong case for his constituents and sets out the disadvantages of alternative ideas. I understand that the alternatives carry with them disadvantages of their own, but the Public Accounts Committee will at least have to return to the problem of evasion. Other methods do not carry that problem with them.
The 19th report deals with expenditure on motorways and trunk roads. I am certain that the Committee's recommendations will command widespread support, particularly for the point—the hon. Member for Scarborough (Sir M. Shaw), among others, mentioned it—about higher standards of new road building to reduce the amount of reconstruction that is necessary. That will strike a chord in the heart of every hon. Member and every motorist who has ever been stuck in a motorway tail-back.
The Committee's recommendations are all based on a fundamental premise:DTp made it clear that the Secretary of State regarded the matter of allocation of responsibilities as settled, and that his decision overtook and overrode earlier discussion and the need for a further review. However, the Secretary of State accepted that the present trunk road system did not fit the changing pattern of traffic in all cases, and the Department were currently examining it at the margins.The Association of Metropolitan Authorities drew our attention to the strength of local authorities' opposition to the Secretary of State's decision. They remained firmly convinced that there were important practical, financial and manpower advantages to be gained from a transfer of executive responsibility for trunk roads to local authorities, and that these could be achieved without diminishing the Secretary of State's strategic role.The conclusion to appendix 1 of the report returns to this issue:The Association's case for the transfer of responsibility for trunk roads rests not only on the policy grounds highlighted in the NAO report, but also on the significant financial and manpower savings which would result. The local authority Associations have been treated in a cavalier fashion in the negotiations on this issue by the Government and the Department of Transport whose position is clearly based on self interest and an entrenched antipathy to local government.Those are harsh things to say, and these are the strategic matters to which the Public Accounts Committee will have to return. I am not convinced—nor is the AMA—that the division of responsibilities is the right one.
Two highlighted reports that concern the Home Office deal with the Metropolitan police and the prison building programme. To take the latter first, my hon. Friend the Member for Durham, North-West (Ms. Armstrong) was right to emphasise an example of the deficiencies in the present improvement programme, which affects her constituency and the whole county of Durham. The report highlights a number of issues—overcrowding, and the mis-match between the type of prison required and the areas most in need of servicing on the one hand, and the buildings that the Home Office intend to construct on the other. The Committee expressed concern, as did my right hon. Friend the Member for Ashton-under-Lyne in his speech, that in 1991 there will still be 20,000 cells without basic sanitation. The Committee also touches on issues of design, manpower and matters involving the Property Services Agency's consultants.
1193 A powerful point with which I agree wholeheartedly was made by my hon. Friend the Member for Workington (Mr. Campbell-Savours). He said that the area of debate on this issue should be widened to include rehabilitation. The Committee's report recommends much closer liaison between the Home Office and the Lord Chancellor's Department and that recommendation may hold the key to a long-term remedy for the problem.
Compared with other European countries, Britain has a surprisingly large prison population. There is much to be gained by examining alternatives to custodial sentences and the probation service and the National Council for the Care and Resettlement of Offenders offers much advice in this respect. The Government should listen to that advice or at least examine it rather than just put it to one side as many of us fear they do. It is also time to examine the issue of cases that have not been brought to trial. Far too many people are in prison for too long before their case is even heard. That in itself is a substantial injustice.
I turn now to what is described in the 45th report as "The unique constitutional and operational position" of the Metropolitan police. The Committee has sought to consider the "patchwork of arrangements"—that is the Home Office's description and not mine—works in practice. The Committee faced a hard job in dealing with that issue. It is a difficult task for a Committee with oversight responsibilities to get to grips with many of the issues that sit alongside the day-to-day control of operational decision making. The issue bedevils the workings of provincial police committees, and I pay tribute to the Public Accounts Committee for having given these issues as good a trawl as could possibly be done.
The overtime issue is one with which it is especially difficult to come to grips, because much depends on operational decisions that are necessarily wholly in the domain of the police. However, we are told that net overtime costs an extra £50 million a year.
I should like to deal with two further issues, the first of which is accounting for expenditure. The report says:We note that accountability to Parliament operates primarily through the Home Office, with little direct accountability by Met P. The existing Accounting Officer arrangements have certain disadvantages and the quality and form of information provided to Parliament on the efficiency, cost-effectiveness and performance of Met P is clearly unsatisfactory. In these circumstances we doubt whether the arrangements for Parliament accountability are adequate, and they should be reviewed…".On the important question whether the Metropolitan police is value for money, the report say:We are concerned that, notwithstanding the progress made in developing improved financial control and management information systems, neither Home Office nor Met P are yet in a position to justify the basic level of Met P expenditure. We regard it as important that these systems should be further developed and refined, and we trust that developments in hand and planned will be pursued with high priority…".The London boroughs have to pay more than £30 million a year to an organisation over which they are able to exercise no real financial control, nor can they be reassured that the Home Office is exercising such control. In a recent report produced by the London Local Authority Associations for the Home Office, the local authorities make this sensible and modest request in their conclusion:The use of income and expenditure accounts would ultimately benefit all parties concerned with the finances of the Metropolitan Police. The Police themselves would possess 1194 a more realistic indication of their true financial position and would, as a consequence, be able to take better informed decisions. London Boroughs would also be in a position to more fully understand the problems faced by the Metropolitan Police which would in turn promote more meaningful and productive consultation procedures.That seems to be a modest demand; it is absolutely right. It is inevitable that the House will return again to the issue. The PAC recommendations are good, but I do not think that of themselves they will its enough.
The final report which the Committee asked us to highlight is the 44th report which deals with preventive medicine; it contains a range of important recommendations. I hope that I do not do them a disservice if I focus on just two. My right hon. Friend the Chairman of the Committee read the opening part of paragraph 23.I think he did the full paragraph a disservice by not reading the last two sentences:This suggests a less than whole-hearted commitment by DHSS and the health authorities. We note that urgent priority is now being given to implementing the new computerised arrangements, and stress the importance of close monitoring to ensure that the deadline of March 1988 is met.That is what the report says about screening for cervical cancer. It is not an endorsement of what has gone before. If anything is said with telling effect, that must be it.
The importance of the immunisation programme is rightly stressed in the report. Immunisation is particularly important against measles, whooping cough and rubella. The uptake of immunisation region by region should be encouraged and closely monitored. Those points are made with considerable effect in the report.
I should have liked to discuss other matters, but that would be unfair to the Minister, so I make just one last point. Throughout the topics covered by the Public Accounts Committee two recur out of all proportion to the scope of our national life. One is economic public investment in Northern Ireland; the other is defence procurement. I am sure that the House will return to those matters next year, the year after and the year after that.
§ The Financial Secretary to the Treasury (Mr. Norman Lamont)
I shall do my best to respond to many of the points in the 18 minutes remaining, though to cover some 50 reports in that time would be difficult. Although time is short, I should, like everyone else, pay tribute to the work of the Committee and of its Chairman, the right hon. Member for Ashton-under-Lyne (Mr. Sheldon). His tour d'horizon was a tour de force which went on for an hour. I am doing no more than complimenting him and remarking on his obvious enjoyment, which made his speech a pleasure to listen to. I think that all hon. Members would wish to congratulate him on the work of the Committee and to pay tribute to the other Members as well.
As has been said several times, there has been a considerable increase in the burden of work on the Committee. The right hon. Gentleman outlined the functions of the Committee as first, tracing where money had gone, and second, obtaining value for money. I thought it interesting and notable that he emphasised the first because at one time it was fashionable to dismiss that. But the right hon. Gentleman gave specific examples of where that had been an important part of the work of the Committee. I agree wholeheartedly with his rubric—efficiency, effectiveness and economy as the three criteria to follow in pursuing value for money.
1195 My hon. Friend the Member for Scarborough (Sir M. Shaw) made the point that inevitably many of the reports have a certain sameness in their conclusions. So in a sense they should. They are bound to be about inputs and outputs, project control and monitoring. As the hon. Member for Norwich, South (Mr. Garrett) said, the science of these matters is evolving and developing and it is not surprising that the Committee finds many different areas of government on which to turn the spotlight and about which to make similar recommendations.
We regard the work as extremely important. The hon. Member for Norwich, South may be sceptical of some of what the Government have done—I pay tribute to his expertise—but the Government, more than any other, attach enormous importance to the business of government and obtaining value for money in things such as the scrutiny programme mentioned by my hon. Friends the Members for Northampton, South (Mr. Morris) and for Rutland and Melton (Mr. Latham), which is very important in the mind of the Government.
It would be remiss of me if I did not pay tribute to the work of the NAO, as other hon. Members have done, in particular to the work of Sir Gordon Downey as Comptroller and Auditor General. I am sorry that the hon. Member for Norwich, South has appeared in the debate only to disappear from the Committee. Years ago, when he and I were on the Select Committee on Procedure, he told me how he would revolutionise Parliament when he got on the Public Accounts Committee. I am sorry that he is going after such a short period, although I see that he has passed the torch to his hon. Friend the Member for Nottingham, North (Mr. Allen). The right hon. Member for Ashton-under-Lyne referred to, among other reports, the eighth report on "Financial Reporting to Parliament", as did other hon. Members. In one sense that report is the most central of those discussed today.
The Government have done much work to improve the ability to read across from the public expenditure White Paper to the Estimates. We intend that the improvements noted by the PAC will be continued. The two documents ought to be brought closer together and we intend to report further on that to the PAC early in 1988.
The hon. Member for Norwich, South referred to targets, inputs and outputs being published across Departments. That is the direction in which the Committee is moving. Last year's public expenditure White Paper was very much a step forward. As a Treasury Minister, with my experience of the Inland Revenue as a department, I know that cannot be achieved overnight. It requires, as I am sure the hon. Gentleman will recognise, a certain amount of time and a lot of work to bring about.
Many hon. Members referred to the report on prison building. My hon. Friend the Member for Scarborough, the right hon. Member for Ashton-under-Lyne, and the hon. Members for Newcastle-upon-Tyne, East (Mr. Brown) and for Durham, North-West (Ms. Armstrong) referred to that report, although the hon. Lady referred to a particular case. I hope she will understand that I cannot comment on it, but I will draw it to the attention of the Home Secretary. The hon. Member for Workington (Mr. Campbell-Savours) made some strong comments about the report and about conditions in prisons. I entirely agree with the strong comments made by many hon. Members and I very much sympathise with what the hon.
1196 Gentleman said about rehabilitation. Speaking for myself, it is nonsense that we put into prison some people who do not have a long criminal record, in conditions that are absolutely appalling, and it is not surprising that those people turn into more hardened criminals. It has always seemed to me that Dr. Johnson got it right all those centuries ago when he said that the trouble with prison is that half the inmates should not be there and half the people who were not in there should be there. The success of penal colony depends on classification.
It is a pity that the hon. Gentleman did not recognise the work of the Government. The scandals of the cells, the absence of sanitation facilities and slopping out are terrible, but the hon. Gentleman might have given a little more recognition to the Government for having done more for prisons than any Government for many years. My right hon. and learned Friend the Member for Richmond, Yorks (Mr. Brittan) deserves enormous credit for what he did when he was Home Secretary. It is a fact that between 1918 and 1958 not a single prison was built in Britain and that is the root of so many of the problems that we face.
The hon. Member for Workington was right to draw attention to the fact that, even after this substantial programme, there will still be a tremendous problem of inadequate sanitation in prisons. Without the tremendous increase in resources that my right hon. and learned Friend has been able to devote to this, the problem would have been much worse. At least the problem will be getting better.
§ Mr. John Garrett
Surely the point is that not only have the Government built more prison places but they have actually put more people in prison. The prison population has grown faster than ever before since the Government came to power.
§ Mr. Lamont
I am not sure that the Government can be blamed for that. The increase in the detection of crime should not necessarily be an object of criticism. However, this is beginning to become more of a party political debate than I had intended. I agree that the balance between custodial and non-custodial sentences will be extremely important in that respect.
I think that the Committee recognised that a tremendous amount of work is being done in the design of new prisons. There will be more prisons, both on the modern, galleried model and on the American triangular model, which will be more economical in the use of staff and a step forward.
§ Mr. Lamont
I cannot give way because an enormous number of points have been made and I should at least attempt to answer them.
My hon. Friend the Member for Slough (Mr. Watts) and others touched on the Metropolitan police. He was particularly concerned about the inadequacy of the rate at which posts were being civilianised in the Metropolitan police. I shall certainly draw what he said to the attention of my right hon. Friend the Home Secretary. I take the point that that has an impact on constituencies such as his, because if the programme were larger, the opportunities for the release of policemen to areas such as his, where he feels that there is a need for them, would be much greater.
This year, in response to the Committee's concern at the pace of civilianisation, the staff ceiling was increased by 1197 250, with a target of releasing 160 police officers. Determined efforts are being made to meet that target. However, the Metropolitan police are now finding it increasingly difficult to recruit and retain suitable staff, especially for operational support duties and technical work, and the Home Office is working with them to see what improvements can be made to attract staff.
I hope that the hon. Member for Workington will allow me to comment briefly on what he said about whistle blowers. I shall certainly pursue that with the Ministry of Defence. I know that the hon. Gentleman spoke with sincerity when he made his points and I know that he believes his case. I hope that he will accept that, although I do not have the information to reply to him at my finger tips, I recall the outline of the case because I was a Minister at the Ministry of Defence for a short time when some of this matter was discussed.
I just remind the hon. Gentleman of a different view that was also taken in all sincerity. First, one must be convinced—I think that this point was also made in a Treasury minute—that any savings made in contracts came about as a result of information that was given and that this was not something that would have arisen anyway.
The second point is one of principle, at which my hon. Friend the Member for Bolton, North-East (Mr. Thurnham) hinted. One must pause before readily accepting the principle that people who inform on companies should automatically be given a pecuniary reward. That poses problems and I know that the Chief of Defence Procurement has devoted much time to thinking about that problem and examining what the hon. Gentleman has said. He came to the conclusions that I conveyed to the hon. Gentleman before. However, I shall certainly undertake to remind the Ministry of Defence about the hon. Gentleman's continuing concern.
Many hon. Members talked about vehicle excise duty and its enforcement—the hon. Members for Argyll and Bute (Mrs. Michie) and for Swansea, East (Mr. Anderson), my hon. Friend the Member for Windsor and Maidenhead (Dr. Glyn) and the right hon. Member for Ashton-under-Lyne, who made it one of the main points in his opening speech. I am afraid that the subject is one that falls foul of the criterion mentioned by my hon. Friend the Member for Rutland and Melton, who said that we should not return to the same subject in another year. This has been a hardy annual with the PAC, I fear. It is a matter of continuing concern. The Committee acknowledged the progress made by the Department of Transport in improving its efforts to combat evasion. Since the Committee examined the subject during the summer of 1986, considerable progress has been made to strengthen enforcement and improve productivity.
During the last financial year, 1986–87, some 345,000 offenders were prosecuted, or made out-of-court settlements with the Department of Transport. The revenue from fines, settlements and back duty exceeded £23 million, an increase of 10 per cent, over the previous year's figure, and some two and a half times the 1982 figure.
The report, and a number of hon. Members who have spoken in the debate, expressed concern at the low average fine imposed by the courts on those convicted of VED evasion. I strongly agree with some of the points that were made. The Government have in the past pointed out the unsatisfactory position to the Magistrates Association.
1198 The average total penalty, including back duty and costs imposed last year, was £91, and I certainly do not feel that that was enough. The right hon. Member for Ashton-under-Lyne made the point that evasion was not going down, but there was a large number of prosecutions. It is difficult to avoid the conclusion that the penalties are indeed too low.
A point was made about more staff for enforcement. The Government's policy is to increase effort by further improving productivity, and, of course, liaison with the police—drives such as those that we have seen in many parts of the country. I am informed that there was one on the Embankment this morning, only a few hundred yards from here. Such things can be done without extra manpower.
The hon. Members for Swansea, East and for Argyll and Bute raised the question of replacing VED with a petrol tax. I have to agree that it would stop evasion, but, as the hon. Lady and others said, the extra cost of petrol—39p—would hit essential high-mileage motorists, business, industry and particularly rural areas. We would still need to maintain a central register for use by the police. The Government would change the system only if the benefits clearly outweighed the drawbacks.
I have about a minute and a half in which to respond to a good many points. The right hon. Member for Ashton-under-Lyne spoke about tackling abuse of mortgage relief, and asked why we did not introduce a system of receipts for building work—the point being, I assume, to ensure that the money was spent on building, rather than on holidays in the south of Spain. We have examined the matter. However, a system of checks would be effective only if it were possible to ensure that it was done in considerable detail. Several million people are involved. We are doing sample checks, which is quite staff-intensive. To carry out complete checks would be very much more costly. We have taken various other measures.
I have missed many of the points that have been made, and I apologise to the House. I have dealt with as many of the points as I could as quickly as possible, and I am very grateful to all those hon. Members who have contributed to the debate.
§ Question put and agreed to.
That this House takes note of the 15th and 19th to 52nd Reports from the Committee of Public Accounts of Session 1985–86, of the 1st to 19th Reports of Session 1986–87 and of the Treasury Minutes on those Reports (Cmnd. 9846, 9859, 9917 and 9924, and Cm. 138, 177, 224 and 236), with particular reference to the following Reports of Session 1985–86—