§ Mr. Robert Sheldon (Ashton-under-Lyne)
I beg to move,That this House takes note of the 37th to 40th and 42nd to 52nd Reports of the Committee of Public Accounts of Session 1987–88, of the 1st to 33rd Reports of Session 1988–89 and of the Treasury Minutes and Northern Ireland Department of Finance and Personnel Memorandum on those Reports (Cm. 533, 563, 624, 648, 697, 717, 747, 831 and 850), with particular reference to the following Reports:—1987–88:Forty-fourth, Quality of service to the public at DHSS local offices;Forty-eighth, Sale of Royal Ordnance plc.1988–89:First, Management of the collections of the English national museums and galleries;Twenty-sixth, Coronary heart disease;Twenty-eighth, Backlog of maintenance of motorways and trunk roads;Thirty-first, Reliability and maintainability of defence equipment.The last such debate was on 3 November 1988 when 38 reports were covered by the motion. Now we are dealing with 48 reports and nine Government replies. The motion is in my name and that of the hon. Member for Scarborough (Sir M. Shaw), who is such an assiduous and valuable member of the Committee. As on recent occasions, we have chosen a few reports to highlight, although reference to many of the others will be acceptable in the debate.
I should like to thank the Committee, which is hard-working and meets twice a week. There are many papers to read. The civil servants involved naturally present their case with a great volume of paper. Consequently, the weekends of many of my colleagues on the Committee are taken up with reading them. There is no doubt that in the distant past the Chairman on many occasions did all the work. He read all the papers and the amount of work done by other Committee members varied greatly. However, now we have a hard-working Committee which has provided great advantages to the reports that we produce.
During the time covered by the reports, we have lost four Labour Members from the Committee—my hon. Friends the Members for Normanton (Mr. O'Brien), for Rhondda (Mr. Rogers), for Redcar (Ms. Mowlam) and for Fife, Central (Mr. McLeish), who have all joined the Opposition Front Bench. It looks as if the Opposition Front Bench is looking to the Public Accounts Committee for recruits. It is a measure of the type of ability that we have been able to acquire that, although the Committee has lost the advantage of having those people and their experience on the Committee, the advantage which they bring to the Opposition Front Bench is an understanding of many economic and financial matters.
§ Mr. Sheldon
It is a little more than a Government training scheme. It copies the way in which the Government use their Whips Office. The method that we use is preferable to that.
§ Mr. Graham Allen (Nottingham, North)
It is a valuable experience. There is a vacancy on the Committee and if my hon. Friend the Member for Bolsover (Mr. Skinner) wishes to join us, he would be most welcome.
§ Mr. Sheldon
I shall deal with the issue raised during the statement made by the Secretary of State for Trade and Industry. I regret—as does the Committee—the leaking of confidential memoranda. The Committee receives many confidential memoranda dealing with sensitive matters concerning defence, security and others. If it were felt that those were now in jeopardy, the work of the Committee would be seriously affected. After it receives those confidential memoranda, the Committee decides which of them shall be published and what parts should be available to public scrutiny. With the exception of only a few—and only parts of those—all our investigative sessions are in public since we believe that there is great advantage in letting the public in on our work so as to give them knowledge and understanding of what we do.
The new Financial Secretary to the Treasury is now a member of the Committee. In line with tradition, he does not attend very often but when he does—whenever time and interest allow—we welcome him. We both proceed on similar lines as the Treasury wants to obtain value for money and so does the Committee. Naturally, there are differences between members of the Committee and the Financial Secretary, but on value for money we are at one and we hope that that will long remain. The previous Financial Secretary, the right hon. Member for Kingston upon Thames (Mr. Lamont), understood that well. We have an enormous advantage in that we have unanimity within the Committee. Without exception, all our reports are unanimous.
§ Mr. Sheldon
It is not a problem; it is an advantage. If we were divided, the Government need not take any notice of our reports. Unlike any other Committee, we are there to provide value for money whether it concerns Royal Ordnance factories or the sale of Rover. Many other Committees can decide on questions of policy. We are concerned not with policy but with the taxpayers' interests.
§ Mr. Skinner
Is my right hon. Friend saying that we come to the House to take part in the sloppy consensus which he describes in producing unanimous reports? Is he saying that, after a decade of swindles both by the Government and by private entrepreneurs, Tory Members will connive with Labour Members searching for the truth in order to embarrass the Government? There was a £200 million swindle at Ferranti over defence contracts and now there is another swindle at Rover. Despite those giant swindles, this happy consensus never arrives at a conclusion—because of the lack of conflict—until it is all over.
§ Mr. Sheldon
I do not think that my hon. Friend has read the reports. If he had, he would see that we have made serious criticisms—
§ Mr. Sheldon
Of course it is late but we operate only after the full investigation. We cannot proceed until we obtain full information as to what happened. We then produce the report. As I have said, we have made serious criticisms of the Administration. If my hon. Friend reads 880 the reports he will see those criticisms. Every one of my hon. Friend's points as to the failure to obtain value for money is dealt with in those reports.
§ Mr. Michael Shersby (Uxbridge)
In considering the point made by the hon. Member for Bolsover (Mr. Skinner), does the right hon. Gentleman agree that often the Committee's deliberations are extremely effective? Does he recall the investigation into corruption in the Property Services Agency and the results of that investigation which led to the virtual instant dismissal of the head of that agency? Surely that is action.
§ Mr. Sheldon
That is true and the same applies to defence contracts. When the chairmanship of the Committee was held by Harold Wilson, he understood the importance of the Public Accounts Committee in exposing some of the Ferranti and other defence matters of the time. I pay tribute to him. He was the Chairman who initiated those investigations. There are no fewer investigations today; if anything, there are rather more of them because the National Audit Office finds out about these matters more effectively.
The Committee has an important task in exposing occasions when there has been a failure to obtain value for money for the taxpayer. It is its dislike of the taxpayer being rooked that is the cause of the Committee's unanimity. When we leave the Committee we return to our usual political affiliations. Many of our members are vocal in this House on political matters, but when it comes to value for money we are united in our determination to achieve it.
§ Mr. Allen
My hon. Friend the Member for Bolsover (Mr. Skinner) has made a strong and genuine argument about the role of this House and its Committees, but if this House and its Committees are to hold the Government to account, which is our role, almost by definition we can account only for what has already happened—and the Public Accounts Committee is foremost in that role. It is a retrospective role, but I hope that all hon. Members will agree that it is a valuable one.
§ Mr. Sheldon
I am grateful for that remark. I wish that my hon. Friend the Member for Bolsover would pay a visit to hear some of our deliberations—attendance at the Committee is certainly open to him. I should dearly Like him to see the questioning of those who are responsible for spending the money by members of the Committee. He would hear vigorous questioning by members on both sides of the Committee.
§ Mr. Skinner
I have to tell my right hon. Friend that there is a question of hypocrisy here. I did not agree with the setting up of Select Committees. I do not believe that the combination of Tories and Labour Members in this sort of consensus is valuable—
§ Mr. Skinner
This is a place where conflict between arguments takes place. Having opposed the setting up of Select Committees, I have no intention of being hypocritical and joining them. If my right hon. Friend wants to continue the work that he says is so valuable, that is for him to decide, but I have no wish to be involved. If he wants to connive with the Tories and any other rag, tag 881 and bobtails that is his business. I have not come here to do that: I am here to attack the Tory Government and their supporters day in and day out.
§ Mr. Sheldon
I understand my hon. Friend's position on Select Committees—he does not like them. Most hon. Members disagree with him about that—
§ Mr. Sheldon
Select Committees have produced investigations of enormous value to everyone. Questions may be asked across the Floor of the House, and they are valuable, but they do not pursue the detail. Again and again the truth has been found by such pursuit, and only repeated questioning brings out what happened. If my hon. Friend the Member for Bolsover doubts that, I suggest that he comes along on Monday, when we begin examining the sale of Rover and when we shall discover information which he, despite his great talents for parliamentary procedure, would be unable to obtain for himself.
I turn now to the work that the National Audit Office does. We work closely with it because it provides the information, and we deal with how that information came about. Why was the money spent? How could it have been spent better? How could it have been spent more efficiently and effectively? We and the NAO are a partnership. The Committee depends on the NAO's investigations, which are based on an examination of Government papers. We discuss with the NAO the lines of inquiry that it is pursuing.
I want first briefly to mention the fourth report of the Session 1988–89 which deals with the National Audit Office's estimates and corporate plan. The NAO, using fewer staff, is producing more reports and undertaking more investigations of value for money. That is a tribute to the efficiency with which the NAO, under John Bourn, is progressing. I am pleased that John Bourn's first full year as Comptroller and Auditor General has gone so well. He has complete discretion over which investigations to choose, but we also feed in our views.
John Bourn has slightly fewer than 1,000 staff, whom he needs to keep Government value for money under review. I want to mention David Wyland, who has retired as Deputy Comptroller and Auditor General after 40 years in the NAO. There is now a new head of the Northern Ireland Audit Office—Dr. Bill Jack—and he and his staff play an important role. They were rather poor relations of the NAO in Great Britain, but following Denis Calvert's work on the De Lorean affair the Northern Ireland Office became rather more important; we discovered it had a hidden strength that we had not appreciated and the work it has done has given it a higher profile among members of our Committee.
The accounting officers—the permanent secretaries who are responsible for spending public money and who appear before us—take their responsibility seriously and spend a great deal of time preparing for meetings with the Committee so that they can answer the questions that we put to them. In the previous Session about 220 recommendations were made by the Public Accounts Committee, about 200 of which the Government accepted. The numbers are about the same for this Session.
882 We have the great advantage of hindsight. It is up to the Committee to ensure that we are not overwhelmed by it so that we fail to take into account how the situation appeared at the time to the permanent secretary making his or her decision. Within the bounds of what is humanly possible, we do not do too badly.
Fraud and corruption are the most important matters that we examine. I urge my hon. Friend the Member for Bolsover to acknowledge that that was one of the main reasons why the Committee was set up in the last century. However important value for money is, it must always come second to ensuring that fraud and corruption are kept to a minimum. Our most important task is to come down strongly on cases of fraud and corruption. It is not enough to reflect what happens in the country at large; when dealing with public money we have a much greater responsibility than when dealing with private money. The Committee has always held that to be so and will continue so to do.
The first report with which I shall deal is about the health services. The great advantage now is that we are taking them more seriously than we used to. We used not to examine them in detail, but now we look into them closely and we have produced a number of reports on them. Generally, our task is not difficult—we look at what the Government intend to spend their money on and ask what their objective is. How do they come to decide that they will launch a certain programme? We ask that their objectives be closely defined—it is no good coming up with a general proposition. We want clear objectives, monitoring during the implementation of the programme and an assessment of the ultimate results. We want to be able to compare objective and achievement. That is not difficult, but in practice it fails miserably on a number of occasions.
One case involved administrators in the National Health Service. The laudable aim of reducing the number of top administrators was held to be a matter of Government policy. We do not question Government policy, which is up to the Government. We want to ensure that, once the Government have decided on a policy, they carry it out in the most effective, efficient and economical manner. We found that the Government had no clear plan about how many administrators expected to go or how much it would cost. At the end of the scheme, they did not seem to know how many had actually gone. We suspected that a number of them had been re-employed in other parts of the National Health Service. Those are important matters.
I shall briefly mention the third book of Sir Leo Pliatzky who was a distinguished civil servant, a second permanent secretary to the Treasury and the permanent secretary to the Department of Trade. In the third of his splendid books, which are well worth reading and deal with public expenditure, he mentioned that the National Audit Office advocated the spending of money. With a true Treasury background, he did not agree with that. However, the National Audit Office does not really advocate that.
In a number of our reports, we say that it is worth spending money if, as a result, much more money is saved. An obvious example is the repair of the fabric of buildings. Clearly, we could let a building deteriorate and save money or have a proper system of maintaining the building's fabric which would not be spending money, but 883 an economical use of the building and the way in which it is dealt with. It was that sort of spending that the National Audit Office had in mind.
The auditor's role today is not what it used to be; there has been a fundamental change. Years ago, auditors were civil servants who added up figures to ensure that the money went to the right people for the right purposes. That was splendid and crucial. However, in addition to that, the auditor's role today is to ask whether what is being done is sensible. When a company or finance director has a meeting with the auditors of the company, they tell him or her why they are proposing certain actions. They do not just add up and say that the director has to pay a certain amount of tax, but go into the matter with care. They say, "You can save money if you do it another way" or, "You can make much more effective use of your resources if you handle them in a different way." That is the role of today's auditors. The trouble is that a number of people do not realise the change that has taken place.
In the National Audit Office today, there are auditors with qualifications. One of our problems is that they are tempted away by a number of accountancy firms which want them because they have a level of expertise which will be valuable to them. With rates of pay as they are in Government or associated services, of which we are one, that is one of our problems. However, it shows that those people not only have the advantage of being auditors but, by seeing the other Government Departments, can spread information and understanding between one Department and another and between Government and the private sector about the best practices to be adopted. The relationship between the National Audit Office and the private sector is considerable, and the two are able to have a great deal of cross-fertilisation.
The first point I shall deal with in relation to the National Health Service is coronary heart disease. The twenty-sixth report of the Session 1988–89 showed that 180,000 people of working age died each year from coronary heart disease within their working lives—which is the important aspect. That cost the National Health Service £500 million a year. That is bad. What are the Government and the National Health Service doing about it? They are spending about £10 million. Therefore, the problem is costing £500 million and £10 million is being used to try to reduce the incidence of coronary heart disease.
We could look at the figures and say that they are wrong because there may be other factors involved. There are, but they are all on the same side. Ten years ago, the incidence of coronary heart disease in this country was roughly the same as in many other comparable industrial countries. During those 10 years, a number of those countries have experienced rapidly declining levels of heart disease. Our level has come down a little, but hardly at all, and in Scotland the level is still high. We can forget the money, although that obviously concerns us. Apart from the money, such disease causes misery, anxiety, worry and other problems which arise when the breadwinner, or often another member of the family, fails to make a proper recovery in hospital.
Paragraph 42 of our report states:We acknowledge that the medical profession have a major role to play in the development and introduction of new treatments. However, we are surprised that the Department consider that they do not have a more positive contribution to make in this area. The wider use of cost-effective treatments has major value for money implications and we would expect 884 the Department to keep very closely in touch with possible developments and to take positive action to encourage the introduction of new treatments once these have been shown to be both medically acceptable and cost-effective.We hope that the Department will take a different approach to those problems.
We go on to say that there is a serious mismatch between the resources and the demand for cardiac treatment. We deal with bypass graft operations and the fact that they are in short supply. In the Treasury minute, which is the response of the Government and the National Health Service, the Government accept that many deaths and disabilities caused by the disease can be prevented or reduced. With regard to the value of preventive campaigns, we understand from the minute that the Government accept that they will be given more impetus. The development of quantified targets is also being considered.
We like quantification. We know that there are limitations, and that in some cases quantification is difficult or almost impossible. However, we like the attempt to be made to quantify if only because we can check what is being done. We realise the reasons, difficulties and limitations. We understand the way that the Government are able to work. We strongly emphasise the quantification of achievements and, particularly, targets. The Government accept that there should be more emphasis on prevention rather than treatment, and we look forward to seeing that.
The fiftieth report of the Session 1987–88 deals with the issue of operating theatres and their use in the National Health Service. We looked at this because we knew, as does every hon. Member, that serious problems exist involving bottlenecks when certain surgery is undertaken. We asked where the bottlenecks mainly occurred. The National Audit Office found that they arose essentially in operating theatres in the National Health Service. To our surprise, we found that not much more than half of the operating theatres' available use was utilised. I am talking about not weekends or evenings, but the working day and week.
Some of the reasons why the operating theatres were not available were understandable and due to patients getting better or worse. However, we found that even when this led to cancellations, a system should have been devised so that those lower down the queue could be brought forward. The failure of consultants to turn up to carry out operations was a contributory factor in the failure to make the best possible use of operating theatres.
These were serious matters and accordingly the Committee produced a number of recommendations and submitted them in the report. One recommendation was that a record should be kept of areas in which there had been some improvement as a result of carrying out checks. I was pleased to receive this morning a copy of "Efficiency of Theatre Services", which has been published by the Association of Anaesthetists of Great Britain and Ireland and the Association of Surgeons of Great Britain and Ireland.
I should explain that after the Committee's report was published we ran into much opposition. It was alleged that we were criticising the consultants. I find the summary of their recommendations extremely valuable. They say that there should be close collaboration between surgical teams 885 and admitting officers and a regular revision of waiting lists. They support many recommendations which were opposed initially. I am grateful for their assistance.
We are always concerned about defence expenditure because it involves extremely large sums. I shall begin with the forty-eighth report on the royal ordnance factories. The turnover in 1986 was £550 million. We may differ on privatisations and the value of those operations, but the members of the Committee do not differ—I hope that there is not too much difference among hon. Members in the Chamber—on the need to get value for money for taxpayers.
The royal ordnance factories were sold off to British Aerospace for £190 million. That sum was effectively set off by various expenses amounting to about £50 million. We expressed concern that the Ministry did not explore possible redevelopment at Waltham Abbey or Enfield, and did not obtain a valuation based on redevelopment. The Committee noted that the taxpayer will not benefit from any redevelopment that is carried out by British Aerospace.
Valuation concerns us greatly. It can be taken for granted that it is important in any privatisation operation to obtain value for money. There must, however, be proper valuation. It is said that some privatisations can proceed on the basis that we look for the best price that we can get and accept that as the only price and the only way that the undertakings can be sold off. Another approach is to secure a proper and realistic valuation that is based upon all possible different uses of the undertaking that the Government wish to sell. That is the proper approach. I do not think that any individual would sell anything valuable without obtaining a proper valuation. That applies to a house or an object of great rarity, whatever it may be. Once a proper valuation has been secured, it is possible to compare that with what it is possible to obtain on a sale. If the sale price falls very much below the realistic valuation, it is open to the vendor to delay the sale.
I am worried that there have been few delays of sales while an examination is made of the way in which a sale will go ahead. The Committee has come down again and again in favour of tranches of sales. So often we sell a company or industry in one go, but gilts are sold in bits. They are sold over a period after a study of the market. Sales take place when it is assessed that the market is right, and it is a sophisticated exercise, but that has not been done in the privatisation of public undertakings. If an undertaking is sold in tranches and those who are concerned get it wrong in one instance, only a limited sum is involved. If that is done, it is possible to get a better price or a different price when a reassessment has taken place of the value of that which is being sold.
The Government acknowledged that those who were in control of the royal ordnance factories had been exploring the redevelopment of the Waltham Abbey and Enfield sites. They knew also that they had reached no definite conclusions. There was no proper alternative-use valuation because it was considered that that would produce a lesser figure than the existing use valuation. We have not completed our investigations into the royal ordnance factories, but the factories have been sold. We have had the benefit of an investigative session with the 886 consultants, who told us something about the methods of valuation that were available. It was a most valuable session, and it will form part of our subsequent report.
The forty-seventh report deals with major defence projects for the Session 1987–88. Each year we examine the major projects to ascertain whether we are getting value for money and to compare the actual expenditure with that which was anticipated. We studied a useful production of information entitled "Learning from Experience". We found that, within an equipment budget of £8.5 billion to £9 billion, £3 billion to £4 billion of expenditure was not foreseen when the projects were started. About half of the costs were incurred when the project entered full development, when we would have expected the sums involved to be more clearly understood and confirmed. This dismayed us greatly.
We look forward to considerable improvements in the Ministry of Defence. Sir Peter Levene has impressed the Committee in two respects in particular. The first involves competition. Sir Peter has stated again and again that he is trying to get more competition and that he has obtained it in several areas of production. There are, however, areas where it is not possible to obtain competition when dealing with large-scale projects, although it is possible to get it for some of the subcontracts. Sir Peter has asked for all subcontracts to be available for competition. We hope that in due course this will improve matters considerably. We look forward to evaluating the progress in due course.
A smaller but important matter is that we are paying rather more for some of the articles that are held in stores than we probably should. The Committee had much in mind the experience of the United States. Mr. Bowsher, who is the opposite number of the Comptroller and Auditor General in the United States, will be visiting us next week to give us the benefit of his advice, especially on defence projects and expenditure upon them.
It was found in the United States that they were paying about $1,300 for what appeared to be an ordinary ashtray that could be bought anywhere. The horrifying thought that occurred to me and many of my colleagues was, "How can we be sure that the same sort of thing is not happening here?"
Sir Peter said that the price of each article that is held in store should be made known so that when someone goes to the store and asks for an ashtray, or whatever, there will be an explosion when he finds that it will cost $1,300. That seems to be a simple and effective approach. The difficulty that Sir Peter experienced was in convincing those who supply articles to the Government that it would be in the interests of the Government, and possibly in their own interests, to adopt that approach. The suppliers said that they would not like others to know their prices.
It is easy to become a cynic. The Committee is not cynical—and I hope that it never will be—but it is somewhat sceptical about some of the claims. It is right to enter the discussions with that in mind. I understand that a number of companies have now accepted that idea, and we look forward to the results in due course.
The thirty-first report in the Session 1988–89 deals with the reliability and maintainability of defence equipment. Paragraph 3 states:The Department have for many years been concerned about the reliability and maintainability of equipment purchased from Defence contractors. The Royal Air Force have estimated that unreliability currently costs it £500 887 million, or 20 per cent. of its annual operating budget. Based on this, the Services have estimated that unrealiability adds over £1 billion a year to support costs.I understand that the Department believes that half of that amount is available for saving. That is important because half of the RAF fast jet fleet is not available at any particular time because of maintainability and reliability problems. We must ensure that safeguards are built in when the equipment is ordered. There must be an agreement so that the problems are dealt with then. We were surprised to hear that only 30 specialists are dealing with that matter in a Department with a procurement budget of £9 billion. If reliability cannot be assured at a critical time, there could be serious consequences. We are concerned about the rundown of the planned reliability and maintainability activities by contractors, and we want that to be improved.
In the Government's response, the Department agreed that the annual costs of unreliability at more than £1 billion were too high. It accepted that a sustained programme was needed to produce savings. It undertook to take positive and effective action to implement the recommendations of its management consultants who had investigated the problem. We look forward to an improvement. I am sorry that my hon. Friend the Member for Bolsover is not with us. One of the great advantages is that the Committee does not take anything for granted. It will return again and again to these and other problems, and the Department knows that. It is aware of our interest and that we shall continue to look for improvements and changes.
§ Dr. Norman A. Godman (Greenock and Port Glasgow)
When the Committee returns to an examination of the royal ordnance factories, will it examine the circumstances surrounding ROF Bishopton, in Renfrewshire?
§ Mr. Sheldon
We are examining the whole sale again, with the advantage of the further report from the Comptroller and Auditor General.
The twentieth report of the Session 1988–89 deals with urban development corporations. A number of problems made the Committee feel rather uneasy. On the subject of controls over the disposals of land for development, paragraph 19 states:The Corporation had generally sold land for commercial development by private negotiation rather than by inviting tenders from prospective developers. In 15 of the 16 cases examined, the NAO found that valuers' certificates had been obtained after sale negotiations had been completed, and were therefore less useful and provided less assurance on bids than independent pre-tender valuations.The House will note that the language used in the report was restrained, which is typical of the Public Accounts Committee. We do not like to shout too loudly because there are always some horrors lurking that might demand a louder voice.
The London Docklands development corporation told the Committee that it had revised its valuation procedures and that in future the valuation of its properties for annual accounting purposes would be supplemented by valuation of individual sites before negotiations began and again at their conclusion. One example cited was that of a leaseholder who had sold his lease for about 10 times the amount that he had paid to the corporation two years previously. Although the transaction entailed a greatly increased scale of development, the LDDC was unable to secure any additional premium.
888 We need to be very careful when dealing with public money because it is much more sacrosanct than private money. Inefficiencies are sometimes associated with that—not too many, I hope—but it is important to remember that when people pay their taxes they must feel that they are paying them to incorruptible, sensible people who will be accountable for that money. People can take a flier in private industry, but we cannot do that when we are safeguarding other people's money. It is important that we conduct our affairs accordingly.
Paragraph 28 states:We are concerned that the Department and the Corporation did not pursue the question of profit participation more forcefully with the original consortium; and we believe they should have taken much more positive steps to review the position as part of the negotiations in mid-1987.Paragraph 29 states:we recommend that the Department should require all Urban Development Corporations to take a tough stance in land negotiations, and in particular to seek an equitable return to the taxpayer in any future schemes where developers have the prospects of exceptionally high profits.It is one of the safeguards that, if there are to be some unforeseen advantages, the taxpayer should have the confidence that part of them will come back to him. It is an essential part of the process.
I wish now to deal with another report, in which our language becomes a little more extreme. It is the first report in the Session 1988–89 on the management of the collections of the English national museums and galleries. We are dealing with the nation's historical, cultural and artistic heritage. In the last century we were fortunate to have great wealth, much greater than any other country, with resources available throughout the world to acquire enormously important and valuable collections of works of art and of cultural interest. They were collected at a time when there were a number of wealthy collectors. As we shall never again achieve the sort of world dominance that we achieved in the last century, we must carry out the wishes of those who gave those collections to our national museums and art galleries. The problem is that we are selling them.
I wish to make a personal observation which has nothing to do with the Committee. I apologise for intruding into the debate personal observations. Italy does not allow the export of much of its works of art—and, heaven knows, it has by far the largest proportion of works of art. It does not allow export, but unfortunately we do. It is our duty and responsibility sensibly to look after and cherish our works of art.
Paragraph 4 says:The British Museum and the Victoria and Albert Museum, in common with other national museums, face major concerns in the management of their collections. Over significant areas of the collections the position is deteriorating steadily, and in others it is at best being contained or only very slowly improved.We looked at three institutions, but there are many others where we do not know what is happening, although we have our suspicions. It behoves anyone who has any responsibility in this area to take note of what we say about the three collections that we examined and the importance that we attach to them.
In paragraph 18 on the British museum and the Victoria and Albert museum we said: 889The National Audit Office … examination identified many examples of objects stored in cramped, chaotic and overcrowded conditions, including a lack of temperature or humidity controls or air filtration systems.Paragraph 20 goes on to say:The backlog of conservation work was a particularly disturbing part of the C&AG's Report. There were serious conservation problems in a number of areas and in some respects the position was worsening all the time.It goes on to point out thatfor example, 128 years had elapsed before a comprehensive survey of the National Art Library was carried out in 1985 which revealed serious and extensive problems with damage and deterioration, with major and minor repairs needed to thousands of valuable books and manuscripts. The Victoria and Albert Museum accepted frankly that this 'was a national disaster' and agreed that it"—these are damning words, some of the most serious in our report—'represented lasting and irreparable damage to some of the national heritage.'"—In paragraph 21 on paper conservation at the Victoria and Albert museum we say:On present staffing levels backlog conservation in this area alone was estimated at 200 years.That is unacceptable. We are talking about priceless objects. We shall never have the opportunity to have such objects again. I hear of water pouring through the roof, irreparably damaging part of our national heritage, and of someone knocking over an expensive vase. These things belong to all of us, and it is shameful that we allow them to deteriorate. I was pleased to see that the Minister for the Arts received a substantial increase in funding, but I will be surprised if it is enough.
It must be understood that the PAC is not a spending body. We are urging spending for the purpose of conservation and the conservation or maintenance of what we own as a sensible way to proceed. Anyone who does not look to the roof of his house because he is trying to save money would be rightly condemned, not least by the PAC. If we do not look after our heritage, it will deteriorate. That is a foolish way to proceed and we draw attention to that whenever we see it.
The maintenance of roads is another area where, by failing to carry out repairs, we shall incur more expenditure in the end. The Committee expressed concern about the backlog in 1985–86, and we understood then that the Department's intention was to clear the backlog of maintaining motorways and trunk roads as quickly as possible. The Committee looked at the position again in 1989 and was concerned to find that progress had not continued. In 1988 we found that substantial funds, earmarked for maintenance, had been diverted to sustain new construction. The Committee estimated that the decision to transfer money from maintenance to new construction would lead to extra costs over the next three to four years and we doubted whether the benefits of new construction would outweigh the disadvantages of lost maintenance, but the Government did not agree.
It is much more attractive to open a new road or motorway than it is to start coning off and spending money on repairing the surface of a road. The sad thing is that the original decisions were so awful. Everyone knows that the state of our motorways is a scandal. They have far too short a life, and when they were built we did not even know which was the best method of construction. There were gaps in our knowledge and the main objective seemed 890 to be to cut a new ribbon. However, the Department of Transport says that the elimination of backlogs remains a key objective. Of course it must remain so. But to what extent is the deterioration continuing, and how soon will it be before we have relatively cone-free roads able to take the traffic? That is the argument that we put forward to which we shall return on a number of other occasions.
Allied to that was the fifteenth report on road planning in the 1988–89 Session. That dealt with the way in which roads were being planned. The Department of Transport estimated the benefit to cost ratio as 1.9:1. Traffic flows are central to the appraisal, and the PAC examined those. We felt that back checking had been insufficient. Whenever estimates are made, they should be checked with the end result. That is the real source of knowledge. That is the way in which we can find out what went wrong so that we can learn for the future. We said that back checking is a vital ingredient of planning and control.
The National Audit Office looked at 41 schemes and found that 22 per cent. were within 20 per cent. of traffic forecasts. I will come in a moment to the way in which those figures were calculated. The rest, nearly half, varied from minus 50 per cent.—50 per cent. less traffic on the road than had been expected—to 105 per cent., and that was called reassuring.
In paragraph 14, the Committee did not acceptthat the Department's traffic flow forecasting is as reliable as it could and should be. We find their explanations of the variations that have occurred to be unconvincing; and we are concerned at the Department's reluctance to accept that there is a serious problem, which we feel verges on complacency.We felt that to be a serious matter and regretted the method to calculate the figures. They were calculated on the increased level rather than the reduced one, so that the figures appeared to be almost double what they were. The figures were presented in far too favourable a light, and the Committee wanted to examine that further in due course.
Only one or two sessions a year of the PAC deal with Northern Ireland, but we cover a number of important matters each year. Let me take one to give the flavour of some of the criticisms that we have to make on the way in which public money is being applied. I refer to the twelfth report of the 1988–89 Session.
Up to 1980 the Northern Ireland Housing Executive had private insurance. It found that that was a relatively sensible way to proceed. Then it became a little worried at the size of the premiums, and it made changes. In the eight years from 1972–73 to 1979–80 it paid £1.69 million in insurance premiums. It then decided to terminate its insurance cover, and from April 1980 the executive carried its own risk for public liability claims. The claims increased from £1.6 million to 13.5 million over the next eight years, and there are claims for a further £19.8 million outstanding.
The Committee suspected that there were a number of fraudulent claims. The Department stated thatalthough a number of fraudulent claims had been identified, it was impossible to quantify the size of the problem.The Department also stated that it would contest more than one claim from a household, and that the computer enabled such occurrences to be identified. The Committee commented:We take a most serious view of fraud and we urge the Department and the Executive to do more to quantify the extent of this malpractice and to take all necessary steps to eradicate it.In one instance, we found that claims for injury resulting from inadequate road repairs had been made by every 891 householder on the estate in question. Clearly that suggests the possibility of fraud, and similar examples should be closely examined. We look forward to that being done. The Committee also recommendeda system of inspection … which enables defects to be identified and repairedso that the possibility of claims can be reduced. Certain legal requirements make it more difficult to pursue such claims in England and Wales, and we asked that that aspect be examined with a view to conforming with the practices observed in England and Wales.
The next report to which I refer concerns the quality of service given to the public by Department of Social Security local offices, which is a problem of which members of the Committee have personal knowledge. We know that the 500 local offices deal with about 23 million callers each year. The Committee was told that callers wait for a much shorter time than it found to be the case. I put to Mr. France, the then permanent secretary to the Department, this matter:We have your assessment that waiting times"—that is, the time that elapses before a caller is seen by a counter clerk—averaged 24 minutes for supplementary benefit claimants and 7 minutes for contributory benefit claimants. We know from the Gallup survey"—which the National Audit Office commissioned—that their average waiting time is 70 minutes.Naturally, the Committee was rather more impressed by the Gallup figures than by those of the Department.
We were provided with a fascinating insight into what happens in social security offices. Right hon. and hon. Members will have visited such offices on many occasions and seen the queues there for themselves. So when the members of the Committee were told that the average waiting time is only seven minutes, they knew that the Department's figure could not be right. We know what goes on in this world, and we were subsequently able to give advice on desirable improvements to the system.
§ Mr. D. N. Campbell-Savours (Workington)
Does my right hon. Friend accept that there is a disturbing consistency in the inaccuracy of the Department's statistics? I shall be alluding to that aspect in my contribution, if I am fortunate enough to catch your eye, Madam Deputy Speaker.
§ Mr. Sheldon
I am grateful for my hon. Friend's intervention.
Not only were the Department's statistics wrong, but problems arose in understanding the needs of claimants. There was wide variation between the requests made and the responses. A number of callers at DSS offices require only a little advice, but we found that some offices were very chary about divulging information on the benefits that are available, even though people have a right to ask Government Departments where they stand and how much they are entitled to receive.
Many offices provide a poor service. Piercy recommended four important improvements to help bring about an enhanced performance in offices whose standards fell below those required. It was found that claimants were not being provided with enough help and advice and that offices should play a more positive advisory role. When a person is in real trouble, that is the time when he needs the best possible advice. It is clearly wrong that people should be turned away with a curt dismissal.
892 The Committee suggested that surveys such as that which it had commissioned should be undertaken by all Departments having contact with the public to evaluate the effectiveness of their service. The Public Accounts Committee followed up the original Treasury minute with the third report of 1988–89. As a result of those two reports bearing on the same area of examination, the Department of Social Security implemented most of the recommendations. It accepts that desirable standards of service and delivery should be defined and monitored, is paying particular attention to offices performing below tolerable standards, and is promoting a more positive and consumer-friendly image. Customer opinion surveys will also be used to validate claimants' reactions to the service.
§ Dr. Godman
Did the then permanent secretary to the Department explain why results of test cases by social security commissioners are not conveyed to claimants who may be directly affected by them?
§ Mr. Sheldon
No, we did not examine that aspect—but my hon. Friend makes an important point. The result of test cases is the kind of information that is not being made available to claimants. Government Departments must realise that the people who come to them should be treated as customers. I tell any new agent that, whenever a person comes through the door of my constituency surgery, I am on that person's side—no matter what he says. That is an extreme example of a Member of Parliament having a rather different reaction from someone working in a social security office. Nevertheless, I want that approach to be adopted more widely. I want help to be given and surveys undertaken so that the right help is available to people at a time when they are often in great distress. I appreciate that it will take time for that to happen.
Many people compare the public service with the private sector, but that is not a fair comparison. In the private sector, anyone who comes through the door is treated as a customer from whom profit can be made, so he or she is usually very welcome. But anyone coming through the door of an office wanting help from a public service is viewed as someone who is bringing extra problems. Nevertheless, the approach should be brought more in line one with the other, despite the obvious problems that arise.
That is the final report to which I allude, but I am sure that right hon. and hon. Members will deal with a number of others. I hope that I have illustrated the work of the Committee, which continues at the expense of its members' time and effort but to the advantage of both the House and the country.
§ Sir Michael Shaw (Scarborough)
My first duty—not for the first time, I am glad to say, but I regard it as by no means a routine privilege—is to thank the Chairman of the Public Accounts Committee, the right hon. Member for Ashton-under-Lyne (Mr. Sheldon). He does a tremendous job, bringing a team together, cutting out partisanship and keeping us all to the point, and he does it in a way that allows us all to make a fair contribution. The right hon. Gentleman so organises affairs that the Committee's members take a real interest in their work, and that—as I shall demonstrate later in my speech—has not always been the case in Public Accounts Committees.
893 Not long ago we benefited from the attention of the hon. Member for Bolsover (Mr. Skinner). I must confess that that was the first occasion on which I have known the hon. Gentleman to adopt an entirely "establishment" attitude to Select Committees. Be that as it may, however, I found myself wondering what would happen to Parliament if we merely sat here in the Chamber, with no committees of any kind working outside it. In my view, the power of the Government and the Front Bench would become intolerable—cynics might say, "even more intolerable", but I would not go as far as that.
§ Dr. Godman
May I point out that not all Opposition Members agree with their hon. Friend the Member for Bolsover (Mr. Skinner)? As a Scots Member of Parliament, I deeply deplore the continuing failure to appoint a Select Committee to monitor and oversee the Scottish Office in the way that the PAC performs its important role.
§ Sir Michael Shaw
The hon. Gentleman has made a fair point, but I will not pursue it now.
I agree wholeheartedly with what the right hon. Member for Ashton-under-Lyne said about the Comptroller and Auditor General. His office has taken on great new responsibilities, and is, I think, performing its task very well, making important progress in relation to value for money and benefiting hon. Members generally and PAC members in particular.
Let me take up the right hon. Gentleman's comment about museums. The Committee discovered that a serious problem had arisen: incredibly valuable antiques and works of art, collected from all over the world, had been stored very inadequately here, there and everywhere. Moreover, no one seemed to know much about what was in stock, or—if that was known—where it was stored. That is a sad indictment.
I feel that two factors were responsible for much of the problem. The people who had to draw up demands for money each year, and explain why they wanted it, may have been punch-drunk; I certainly do not think that they spelt out a proper, hard-hitting, detailed demand every year. In a sense, I blame the Treasury: the habit had grown up—or perhaps had been there from the beginning—of simply allocating a bulk sum to the Department, and then leaving the Department to sort it out on the basis of a bit here and a bit there.
Our inquiry revealed a special need for conservation, stock-taking and general presentation of the tremendous fund of museum articles. Surely the needs of famous institutions such as the Victoria and Albert museum should be considered separately by the Treasury. I gained the impression from the Treasury representative, however, that it stuck pretty firmly to its original attitude: "We have heard these 'special case' arguments before; we will simply allocate a sum to the Department, and it can get on with sorting everything out". In such circumstances, the case for special need must be spelt out clearly—as I do not think that it has been in the past—and the Treasury must then respond.
So much for the particular; now let me deal with more general aspects. We have a mass of reports and Treasury replies to discuss. I feel that we must accept that the purpose of this debate should change, for how can we 894 examine so many reports in any worthwhile detail in such a short discussion? Furthermore—and this is the real question—do we need to? In general, I think not.
There have been changes at Westminster. The Select Committees have come into being, and, since the National Audit Act 1983, the status of the Comptroller and Auditor General and the National Audit Office have also changed and developed. The procedure of the PAC has changed, too. When I first joined the Committee—I hope that the House will forgive me for going back such a long time—we all sat around all afternoon and were lucky if we got a question in, as the Chairman seemed to do all the questioning. The reports were tiny, and very insignificant; they were not a patch on those of today.
Our hearings are now public, and both press and radio have access to them. Next will come the intrusion—if that is the right word—of television, which will allow the public to see something of our work. All that means that the effects of our deliberations are felt much earlier than they used to be.
Let us examine the history of a typical report. First, the Comptroller and Auditor General produces his report, along with a press statement. If the contents are newsworthy, they will receive considerable coverage—we need only observe the coverage currently given to the Rover report. Then the PAC meets—not secretly, as it used to, but publicly—and examines the witnesses. If that proves newsworthy there is more press coverage, as the press and the BBC attend if they wish. Then we produce our report. Again, there will probably be a press statement, and the Chairman may consider it appropriate to hold a press conference.
That is the time at which the effect of what we have been doing is felt. It is not felt a year later, when we meet here—and let us be blunt: only PAC members turn up on these occasions, apart from one honourable exception, who is a volunteer, and the Front Benchers, who are pressed men.
The old purpose of the debate is no longer relevant. Its objective was to create discussion. We are not creating discussion today, but I hope that we have shifted and influenced people's opinions because the press and other media have been watching us; therefore, we can have maximum effect. Of course we receive a reply from the Treasury, and if that is not satisfactory we can call back the witnesses and have another go, with the same press coverage. None the less, it is right that we should meet periodically here in the Chamber to discuss the way in which the Public Accounts Committee is working, the effect that it is having, and the various changes that it may seek.
We should also consider how our work affects other Select Committees. We are very careful to act only within our remit, as a form of audit but looking for value for money, without becoming involved in policies. If it is felt that wider discussion in the House is needed on any report, it can be achieved either by moving a motion or by using a supply day. The old title of the debate has gone and we must now look ahead and debate the Public Accounts Committee reports in a different way.
We might consider the conditions under which we work in Committee Room 16. As our proceedings attract greater public interest as television will be coming in from time to time, that room is quite inadequate for our purposes. I suggest, as I have suggested many times before, that the adequacy or otherwise of Select Committee rooms should be considered by the appropriate Committee of the House.
895 I turn to another general topic arising out of two of the reports—the public sector borrowing requirement. I shall refer first to the report on the Commonwealth Development Corporation and then to the report on British Nuclear Fuels.
I believe that the definition of the public sector borrowing requirement needs to be reviewed as it is sometimes a definition of convenience. That does not necessarily mean that it is a bad thing, but it is certainly suspect. People may be using the terms of the PSBR to put something in balk that should not really be in balk. I draw two examples of that from two of the Committee's reports.
Pages 4 and 5 of the evidence in the twenty-ninth report on the Commonwealth Development Corporation refer to a subsidiary company in the Cayman Islands. Its purpose is to borrow and lend money abroad. I asked:Will any borrowings that are made under this system be backed by the Treasury?and I received the reply that effectively they would. I was told:They will effectively be under Government guarantee. That will of course ensure that they are obtained at the keenest interest rate. These borrowings have to be approved by us.—that is the Government. So I asked;Are they included in the PSBR or anything of that nature?I was told:They are not included in the PSBR.I said:Perhaps we might turn straightaway to Mr. Beastall—of the Treasury—and ask him why it should not come under the PSBR.He said:The reason for the classification, as has already been implied, is in the case of money which is borrowed abroad for lending abroad. That transaction, unless the debt becomes bad—and I accept that is a different situation but in the normal situation—would have no impact on the United Kingdom economy",to which I replied:That is very interesting.On pages 4 and 5 of the thirty-third report on monitoring and control of British Nuclear Fuels my hon. Friend the Member for Eastbourne (Mr. Gow), who I am sorry cannot be with us this afternoon, asked:Since all the shares save one are owned by a Government Department, since the whole of the borrowing of the Company is guaranteed by the Government, why is it that it is treated as if it were not a nationalised industry so far as the treatment of being a public sector company is concerned?I shall skip the long answer and read out the short answer:There is a difference between guaranteeing the indebtedness and providing all the finance from Government departments.Apparently, the difference is between guaranteeing indebtedness and providing the money.
Frankly, that shows that if the Government want a Government or local government institution to be outside the PSBR, they can arrange that, but if they do not want such an institution to be outside the PSBR they block it by saying, "I am sorry, but that is within the public sector borrowing requirement and therefore it cannot be done." That is basically wrong. Although it may be convenient, it may be helpful to allow Government bodies or local government bodies to be placed outside the PSBR. Where finance could be arranged by Government or local government bodies, making it clear that capital money is required on commercial grounds rather than on PSBR 896 grounds, that should be allowed. That may not always be the case, but if exceptions can be made in the cases that I have quoted, other exceptions should be made.
I am thinking particularly of housing. The alternative arrangements that we are making for new housing are being blocked by the PSBR. If capital expenditure is limited by the PSBR, it is impossible to achieve any continuity in capital expenditure as one year things may be looking good and the next year they may be looking bad. The PSBR is altered year by year by political needs which are often entirely different from commercial needs. For those reasons, the evidence in various reports shows that the PSBR is not always used in the best possible way.
I do not want to hog the whole evening, but I believe that it is a privilege, although sometimes an onerous privilege, to be on the Public Accounts Committee. We work as a team and, despite what the hon. Member for Bolsover says, manage to work without party strife. If we did not succeed in doing so, we should not be doing our duty by the House or by the country.
§ 7.9 pm
§ Mr. D. N. Campbell-Savours (Workington)
I was interested by the speech of the hon. Member for Scarborough (Sir M. Shaw), which I discussed with my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) as he was making his points.
I wish to refer to the eighteenth report on financial reporting to Parliament, 1988–89, and the twenty-fourth report of the same year on the Department of Social Security's operational strategy.
The report on financial reporting to Parliament deals with the arrangements for the financial reporting to Parliament of public expenditure. The main financial documents are the supply estimates, which are derived from the public expenditure survey and the public expenditure White Paper. They represent the Government's formal request to Parliament for cash to finance the major part of Government expenditure.
The objectives of financial reporting were set out by a previous Public Accounts Committee. They were to provide Parliament systematically with information on performance which is reliable as an assurance of the economy, efficiency and effectiveness with which Departments are operating services, and as the basis for selective inquiries.
The supply estimates, which are published annually, cover almost all Government expenditure, such as on the Foreign Office, the Home Office and defence. They cover all the Departments, but they do not cover two other sectors, about which I should like to say a few words. The first is GCHQ, and the second is Government expenditure on the security services, which comes under the heading of the secret vote.
The supply estimates index lists all the expenditure headings of Departments, but there is no reference to GCHQ. Yet it consumes almost £1,000 million worth of public money, which is a substantial sum. Parliament cannot question the use of those moneys, and there is no reporting to Parliament of how they are used. The money that is needed by that Department is, in effect, laundered through a number of votes for various Departments in such a way that Members of Parliament cannot follow or question the allocation of resources.
897 The second sector is the secret vote. The public should be aware that in the current year the Government propose to spend £125 million on the security services under that classification. Under present arrangements, the service is required only to submit to the Cabinet Office what is in effect an invoice for its expenditure for the following year—the document that I have here and which is published in the supply estimates—and it is awarded that amount. Parliament cannot ask questions about the use of those moneys. It is not that hon. Members might want to interfere or even queston the operational use of those moneys but that they do not know how many people are employed, where they work, what generally they are responsible for doing or what their regional obligations might be. We are unable to question that considerable amount of expenditure, which represents £2.50p for every man, woman and child in the United Kingdom.
§ Mr. Tim Smith (Beaconsfield)
Will the hon. Gentleman say what advantage there would be to Parliament in having that information? By definition, all the operations and details of the secret services' activities must be secret. Can the hon. Gentleman cite any western country where such details are available?
§ Mr. Campbell-Savours
In the United States of America, such material is available to a Congressional committee, which meets in private and is staffed by senior members of Congress. It never leaks and it investigates the facts which are of interest to its members in establishling whether resources are being used effectively. That is all that we need in the United Kingdom. I have never suggested that the security services should report to the Public Accounts Committee. I believe that a Scrutiny Committee of the House should be set up to deal with the financial accountability of the security services. Such a development is inevitable—it is merely a question of when the necessary Government commitment will be made.
The problem is that when the Public Accounts Committee has raised these matters on previous occasions, Departments under successive Governments have felt loth or constrained about whether such information, if given to Parliament, would be properly used. They have questioned the ability of Select Committees to retain that information as private, which is why I wholeheartedly condemn the fact that a document given to the Public Accounts Committee under conditions of confidentiality has been leaked in the past few days to The Guardian. I understand that the press may have found it exciting copy, but in so far as newspapers know that it is inevitable that that information will surface in another form, probably as part of one of our reports at a later stage, they should be far more circumspect about the information that they provide. I am sure that newspapers will always find hon. Members willing to provide such information, but by publishing it they compromise our Committees and make it even more difficult for us to convince Departments that we are reliable and capable of maintaining the confidentiality of documents until there is a need to publish them, and they serve the arguments of those who argue against the accountability for which I am pressing, certainly in relation to GCHQ and the security services generally.
The second report is the twenty-fourth report on the Department of Social Security's operational strategy. The 898 background to the report is that since 1982 the Department has had under development a substantial 1.8 billion programme for the computerisation of the Department, replacing many of the current manual procedures. The aim of the strategy is to provide, through a series of interconnected projects, access to area computer centres by 450 local social security offices and 840 unemployment offices, which entails the use of 33,000 visual units.
The Public Accounts Committee has always been assured, certainly by the Department's accounting officer, that the system will work. The hon. Member for Staffordshire, Moorlands (Mr. Knox) asked the Under-Secretary of State for Social Security about the progress of the computerisation programme. In reply, the Minister said:The Department's highly complex £1.7 billion strategy for the computerisation of the payment of social security benefits is proceeding as planned. The pilot exercise in 23 local offices has been completed and the systems are being introduced nationally office by office."—[Official Report, 27 November 1989; Vol. 162, c. 430.]That reply suggested that everything was going fairly well. When we were discussing such matters earlier this year, in reply to my hon. Friend the Member for Nottingham, North (Mr. Allen), we were given an assurance by Mr. Partridge of the Department. Speaking about the programme of computerisation and the local office projects, he said:The LOP ones will be very fully tested indeed. They go through about six states of testing and they will be tested to death and will work, I am quite confident of that".That was on 1 February this year. His reply was nonsense and I believe that the accounting officer knew that when he gave it.
Several statistics have been produced to substantiate claims about the operational efficiency of the system. I understand that the statistics are available nationwide, but I shall deal with the statistics from the Workington office in my constituency. To measure efficiency, one must take into account the availability of systems to departmental officials. The Department's statistics show that the system was working for 89 per cent. of the time in the week ending 5 November and 87 per cent. of the time in the week ending 12 November. Those are the Department's figures. I suggest that they alone indicate a loss of a great deal of time.
The statistics are also highly inaccurate, as they are based on averages. The programme and the local office projects cover three different areas of calculations—retirement pensions, departmental central index and income support. If we ignore the averages, and consider each area separately, we find different statistics. In the week ending 5 November, the system for retirement pensions in Workington was available for only 74.4 per cent. of the time, the departmental central index was operational 100 per cent. of the time, and the income support system for 91.6 per cent. of the time. In the week ending 12 November, the retirement pension system was available 89.7 per cent. of the time, the departmental central index 93.7 per cent. of the time and the crucial income support system, which represents the main body of the office's work, only 76.3 per cent. of the time. For nearly a quarter of the time in that week, the income support computerised programme was not operational in Workington.
899 Such figures have major implications for the level of service. By averaging all the statistics, the departmental central index—which is the least used and to which there is least access—drags up the average level of availablity, particularly for income support, and completely distorts the statistics.
I understand that in October there were 14 interruptions to the Livingstone mainframe computer service to local offices. For income support, most of the errors in software arise in priority areas such as arrears payments—a highly sensitive area for customers. There are allegedly more than 80 errors in the current software and the mainframe computer on pensions is overloaded. Breakdowns in the system, which when complete will have cost the taxpayer in effect almost £2 billion, are leading to a great reduction in morale among staff in the Department. In Bolton, the position is very bad and morale has almost been destroyed.
It is intended that the programme will be fully operational by October next year on what I call big bang day but the Department refers to as national roll-out. From what I am told, the system will not be working by that date. The Department has many questions to answer on that.
What are the implications of the £1.8 billion investment programme for employment? The Department's figures are a complete fabrication. The Department says, and the National Audit Office report states, that by spending billion 20,186 jobs will be cut. The Department states that job reductions are crucial to the viability of operational strategy. When the Department's officials came before the Committee we were told that staff would indeed be lost. In my view, the projected savings will not arise. Managers in various parts of the country say that it is unlikely that any more than half the savings in staff will be made. However, senior managers say that if savings are not made on staff, cuts will have to he made in other areas of the service to ensure that the Government fulfil their expenditure commitments. That is unrealistic and impracticable because it will lead to a major reduction in service across the country, particularly in offices where there is a heavy workload.
I have looked at the figures for the office in Workington in detail. Like every hon. Member, I occasionally visit my local office and ask questions, but on the most recent occasion, as I asked questions I carefully noted what staff told me as I walked around the office. I was told that in Workington 84 jobs were cut in 1987–88, 79 in 1988–89 and 74 in 1989–90. There has been a steady reduction as computers have come on line and a further 11 are to be cut, leaving a complement of 62 by June next year. I put it to Ministers that that complement will not be sufficient in Workington. The reductions in staff will jeopardise the service and lead to a major reduction in the quality of service to the customer.
I do not question the need for computerisation. I am thoroughly in favour of it if it leads to the faster provision of service, if it works, if it means that people are in and out of the office more quickly, and if it makes access to material data on particular people easier. However, I object to misrepresentation of the facts to Parliament to substantiate the expenditure.
We are told that the computer system is to be fully operational by October 1990. Yet the staff cuts in Workington—I assume that it will be the same in every other part of the country—are to be made by July next 900 year before the computer is fully operational. The same will apply in every hon. Member's constituency. Every office will face the same difficulty. The cuts are based on what I can only describe as doctored statistics to substantiate the repeated claim of Ministers and civil servants that everything is on line.
The system is not working as it should. Departmental officials know the truth and they are telling Members of Parliament because many of us are talking about what is happening in that Department. Action needs to be taken now.
Why have all the problems arisen? My conclusion is that the computer was bought from the wrong firm. I understand that by waving the Union Jack one can invariably land major public-sector contracts. The contract was won by Imperial Chemicals, which I am told produced the equally disastrous Camelot computer 10 years ago. If we are to introduce computerisation affecting many Departments and tens of thousands of people across the country, Departments have a responsibility to buy what is right although it may not necessarily appear to be in the best interests of the country at the time. It has major implications for the operational effectiveness of a Department.
Departmental officials sometimes provide inaccurate information. In February, I questioned the answers given to me on the operations of the social fund microcomputer. I was told that my data from a research project carried out in several offices in the north of England were inaccurate. I checked with my sources, talked to departments and was told that the information was correct. Officials should not treat members of the PAC as though we were idiots. 'We know what is going on because we can ask questions. Responsibility for answers should be more direct, even if the Government find the answers uncomfortable. For example, Mr. Nichol recently gave evidence about the NHS. He is involved in a great deal of controversy about the ambulance dispute. He gave the Committee good, solid evidence based on what I believe to be the most objective assessment of what was happening. He did not hide the truth, but simply put it to the Committee. I pay tribute to him for that, and that is the approach that I shall expect from all departmental officials in the future.
My hon. Friend the Member for Bolsover (Mr. Skinner) is unfortunately no longer present, but I am sure that he is busy elsewhere in the House. He must understand that the House has to have a mechanism which enables Members to probe deeply into a matter and test details, especially when the truth comes out. Hon. Members must have access to officials to question them in detail on matters of great interest. The Floor of the House does not offer us that opportunity. It is good for backchat across the Dispatch Box—once in a while a Minister slips up and we score a point but at the end of the day it is the Select Committees which offer us the only opportunity to inquire in depth into a particular matter.
§ Mr. Michael Shersby (Uxbridge)
Does the hon. Gentleman agree that it is a great pity that the invisible hon. Member for Bolsover is not in his place? If he were to participate in the debate, he would have before him more than 40 reports from the PAC going into great detail which our Chairman, the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), has described so vividly tonight. That would have provided the hon. Gentleman with an 901 admirable opportunity to question Government expenditure in many areas, basing his comments on facts, which would be a nice change for him.
§ Mr. Campbell-Savours
The hon. Gentleman may be surprised to learn that my hon. Friend deals in facts and does his homework on the many issues in which he is involved.
I have had private discussions with my hon. Friend. He does not recognise Select Committees as a forum for such inquiries. He is inclined to go directly to organisations to secure the details which we can obtain in our proceedings. I do not condemn him for his strongly held view that a consensual relationship develops across such Committees, and it is true in this instance. I can defend that because by the nature of our reports inquiring minds are gathered together. We are all dedicated to securing value for money and the most cost-effective use of public resources.
Unfortunately, I shall not be present to hear the replies as I have to return to my constituency on the 8.45 plane from Heathrow. I apologise to the hon. Member who is to speak next. I shall read the hon. Member's speech and also the replies. I ask the House to forgive me for leaving early.
§ Mr. Richard Page (Hertfordshire, South-West)
I have had the privilege to serve on the Public Accounts Committee for two years. If ever I had any doubts about whether our work was worthwhile, they were dispelled by the hon. Member for Bolsover (Mr. Skinner). When in my political life I do anything diametrically opposed to what he recommends, it is a good weather vane, showing that I am making the correct political decisions.
I have a mild confession to make. In Committee yesterday I said that when I started to serve on it I worried about whether the flood of reports, with their varying degrees of horror, would continue indefinitely. There were wry smiles from my colleagues and stifled guffaws from one or two who are battle hardened. The flood of reports has continued unabated. That more than anything else justifies strengthening, supporting and providing more assets to the Committee in its work so that we can produce value for money for taxpayers.
I pay tribute to the National Audit Office for the high quality of its reports. In a debate such as this we are spoilt for choice. If, heaven forbid, I ever wanted to filibuster, PAC reports would give me ample ammunition and would ensure that I did not retrace covered ground.
This evening I have chosen to talk about road planning and coronary heart disease. I am well aware that in choosing coronary heart disease I am following in the footsteps of our worthy Chairman, the right hon. Member for Ashton-under-Lyne (Mr. Sheldon). I join my hon. Friend the Member for Scarborough (Sir M. Shaw) in expressing my appreciation of our Chairman's leadership and the way in which he keeps us away from the pitfalls of policy. I understand that at the weekend he will be given the freedom of Tameside, and I congratulate him on that worthwhile honour.
I have chosen those two subjects because the Treasury and departmental responses to them are different in nature from the response to my chosen subject last year—the Charity Commission. My hon. Friends on the Committee called it a disaster looking for an opportunity. The 902 Treasury response was immediate. It put extra officers on the job to ensure that the Charity Commission was not abused and that the millions of pounds a year given to charities were correctly applied. The responses this year have been described as less than urgent.
The twenty-sixth report reminds us that coronary heart disease kills 180,000 people a year. I am not happy with the speed of introducing and spreading best practice. The Department of Health's response to the number of lives lost is not co-ordinated as it is for the treatment of AIDS and alcohol abuse, for which ministerial committees have been established. An analysis of the 34 health districts in England has shown that a quarter of them did not even mention the prevention of heart disease in their programmes for 1988–89. In international terms, the United Kingdom has one of the highest death rates from this terrible disease. It is 298 per 100,000 in Northern Ireland and Scotland and 243 per 100,000 in England and Wales compared with 230 in the United States, 79 in Spain and 45 in Japan.
As a further example of our laid back approach, I should like to bring in the question of the targets for coronary artery bypass grafts as a case in point. The Welsh Office has decided to adopt a higher figure of 400 to 500 operations per million of population. The response from the Department of Health is that the Royal Colleges of Physicians and Surgeons are preparing a report on the topic. When that advice is available, the Department will no doubt leap into action and consider whether a new target should be set. I suggest that the colleges and the Department of Health should have a view in place at the moment. They have international comparisons to hand, and attention to the spread of best practice could be a little quicker.
Putting aside the present ambulance dispute, another worrying aspect is the wide range and variety of policies adopted by ambulance crews. We must remember that 30,000 people die of heart attacks within the first two hours. Scotland has a policy of fitting its ambulances with defibrillators and of training crews in their use. That is positive thinking. The British Heart Foundation is working to achieve that. It will cost about £2 million, and the foundation is working with the Heart Start Scotland campaign.
Seven of the nine districts in Wales are seeking to introduce extended training for ambulance crews in heart disease. What is the position in England? The accounting officer was not too certain about how many ambulances had defibrillating equipment or about the number of crews trained in its use. The National Audit Office said that it is about 30 per cent. However, we find that some districts ask their ambulance crews to use defibrillators while others positively discourage their use. One of our ex-colleagues died of a heart attack in his 40s. There is a strong view that if a defibrillator and a crew trained in heart resuscitation had been available, he could still be in the House representing his constituency.
I asked Sir Christopher France whether whether there were any regions or districts that did not train ambulance staff in the use of defibrillators, and his answer was yes. Like every other member of the Committee, sometimes when I left the Committee Room I said to myself, "I wish that I had asked another question. I wish that I had asked Sir Christopher whether, if he had a heart attack, he would like the ambulance staff who were picking him up to have 903 a defibrillator and a trained crew or whether he would have been prepared to hang on and wait until the door of the hospital appeared."
§ Mr. Tim Smith
Does my hon. Friend agree that one of the most striking aspects of coronary heart disease is the vast imbalance between the amount that the Department spends on treatment, which is £500 million, and the amount that it spends on prevention, which is £10 million? Does he agree that prevention is better than cure and that there should be a reordering of priorities? Does he also agree that the most effective way to stop smoking is to increase the price of cigarettes? To put it mildly, it is unfortunate that in two of the last three Budgets the duty on cigarettes was not increased at all, which means that the real price has fallen. Would not that be the most effective way to discourage people from smoking?
§ Mr. Page
I agree with my hon. Friend, but I know that at least one of our hon. Friends will speak about that. I ought not to pick the bones completely clean but should leave one or two topics. My hon. Friend the Member for Beaconsfield (Mr. Smith) has swept up some of the other topics that should be acted upon.
As I have said, there is a laid-back approach to introducing the spread of best practice. Each year 180,000 people die from heart disease and, as my hon. Friend says, prevention is better than cure. The Department of Health and the Treasury should allocate funds to saving lives rather than trying to treat people after the disaster has occurred.
The fifteenth report deals with road planning. That is a euphemism for what sometimes happens because I freely admit to the House, as I admitted to the Committee, that I and my constituents are scarred by the experiences of the M25, part of which passes through my constituency. I know that my hon. Friend the Member for Beaconsfield feels equal pain over the large number of holdups and congestion.
My first objection relates to the misleading way in which the figures about the relative success or failure of the forecasts are presented. We see from the report that about 18 of the 58 schemes are 20 to 40 per cent. above or below the forecast level and that in seven of the schemes the error exceeded 40 per cent. Anybody hearing that would say that, while it is not too good, it is not too bad either. The forecast is for 100 cars a day, and with an error of 40 per cent. there will be 140 cars.
Of course, that is not the way that the Department works. Its forecasting error is expressed as a percentage of the outturn. In my constituency it is not 50,000 cars that use the road but more than 100,000. That means that for every one car that was forecast to use the road there are more than two, and somehow the Department thinks that the increase represents 0.4 of a car. It is certainly more than double. The Department says that it will make clear the method that it uses. Its forecast should be used as the base line and not as a percentage of the outturn.
I hope that forecasting will be improved, as is suggested in the Treasury response. However, that response is an 904 amalgam of reasons and excuses about why the forecasts have turned out in the way that they have. They are a history of underestimates. It says that in future things will be better and that the sun will shine. I remember the M1 when it had just two lanes, but then it had to be extended. There is an explanation offered about the M25, especially where it passes through my constituency. The response says:For example, for the Micklefield Green-South Mimms section, objectors argued that traffic could be accommodated for some years ahead by minor improvements to the existing road network.The response said that the forecasts had to be vigorously defended at the inquiry against the constant criticism that they were too high. Of course the objectors said, "Do we need the motorway? Do we need all this disruption?", and thought that the existing road network could possibly accommodate the traffic. They would say that, because they based their objections on Department of Transport figures that were at least 100 per cent. out. Of course there will be chaos and confusion. While reading the reasons, excuses and promises for the future, I wonder whether there has been any real change in the nature of the beast.
The other thing that riles me about that section of the M25 is that during the inquiry we had already had the experience of the Chertsey to Staines section, which was open, and within months was oversubscribed and had exceeded the forecast figures. Some 100,000 vehicles were travelling through that section per day, and as it is only 10 or 11 miles from my constituency, surely it would have been realised that those cars had to go somewhere. They would not all flood on to roads in the constituency of my hon. Friend the Member for Beaconsfield or to Heathrow airport but would continue to the beginning of the M1. It is peculiar that no one recognised that.
I take some comfort from the remarks in the Treasury's response, particularly the comment that it is more optimistic about future economic growth. I also take comfort from the response in the White Paper entitled "Roads for Prosperity". I hope that those responses will allow for a more realistic roads provision for the future. Good communications, whether through information technology, or physically through roads or rail services, are necessary if Britain is to be a successful industrial country.
I hope that my hon. Friend the Financial Secretary will make sure that forecasts err on the side of growth and prosperity rather than on the negative side of reduction. I also hope that my constituents will have a better level of environmental protection, and that the traffic will keep moving when the motorway is widened.
§ Dr. Norman A. Godman (Greenock and Port Glasgow)
Earlier this evening the hon. Member for Scarborough (Sir M. Shaw) described me as a volunteer attendant at this debate. I am pleased to take part in what has been, and hope will continue to be, a civilised debate. The only unfortunate thing about the debate has been its attendance, which is on a parallel with attendance levels late at night when we debate European Community affairs. That is a matter for regret.
The forty-fourth report from the PAC—an estimable Committee—is entitled "Quality of Service to the Public at 905 DHSS Local Offices". I wish to focus on the importance of test case decisions to the public, to the DSS and to the Treasury and the Government's response to the report.
Earlier today I asked my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) whether the senior official from the DSS, during cross-examination by the Committee, had offered an explanation of why the DSS had failed to publicise decisions taken by social security commissioners, which might have profound consequences for the Department and their clients—or claimants as they are traditionally known—and for the Treasury. The Treasury may be delighted by the apparent failure or unwillingness to publicise test case decisions. However, I am concerned for the claimants.
In paragraph 3 of the report, the Committee talks about the poor standard of service obtaining in some local offices. I shall defend the two offices in Greenock and Port Glasgow, as the two managers there—Mr. Derek Andrews and Mr. Brian Bryceland—run tight ships. I have always told them that I will not tolerate any of my constituents being treated in a discourteous or ill-mannered way by officials, who are also my constituents. I am pleased to say that complaints about discourteous or ill-mannered behaviour can be counted on the fingers of one hand over a period of some six years. I am sure that hon. Members of the Committee were not criticising the officers in my constituency.
I disagree with the Committee when it states, in paragraph 3(e), that it accepts that the staff levels in local offices are at a level appropriate for the work that they have to undertake. I do not believe that that is so. In some local offices the problem is exacerbated by a high level of staff turnover. Some new companies are beginning to come to Greenock and Port Glasgow, and one of those new companies recruited nine members of staff from the local DSS office. They were among the first 14 people employed by that company.
I agree entirely with the Committee when the Chairman and his colleagues say in paragraph 3(i) of the report:We accept that in providing information and advice local offices must respond to the circumstances in which they operate. But we are not satisfied that all offices are adequately fulfilling the Department's role".That is true of test case decisions.
I am pleased to see, in paragraph 28 on page ix, that the Committee members have taken note of the effects of the Department's efforts in Scotland to influence the content and timing of take-up campaigns. In the Strathclyde region there is a high level of co-operation between local DSS offices and the social work departments of the regional council. However, it is precisely at such moments that DSS officers do not have the facilities or staff to deal with the effects of take-up campaigns.
The Government seem to be somewhat complacent and I am less than satisfied with their response to a fine report.
Paragraph 14 on page 4 of the Government's response, entitled "Complementing Local Offices", claims that there is a new complementing system for local officers, based upon performance as well as work measurements, and it says:It will seek to deploy staff to meet agreed standards of service".That is not always the case. There is much more to be done in regard to the quality of the service provided by officials.
906 The example that I want to pursue follows a test case in August this year involving a commissioner and a Mr. Potts from Sunderland, who suffers from a common industrial disease called vibration white finger which is well known to my constituents and to those of my hon. Friend the Member for Newcastle upon Tyne, East (Mr. Brown). It is brought on by the constant use of vibratory percussive tools. In the shipyards, the man most susceptible to this peculiarly painful industrial disease would be the caulker burner, but it affects many thousands of former employees in shipbuilding, mining, forestry and construction.
On appeal, the commissioner decided that Mr. Potts was in a state of justifiable ignorance of his right to claim backdated disablement benefit in respect of his illness. If other claims based on that test case are made, payments may in some cases exceed £6,000. Hence, perhaps, the Treasury's response to the DSS's failure to publicise the test case, especially in shipbuilding constituencies. I believe that there are thousands of men who have suffered from this disabling industrial disease.
Following the test case, several take-up campaigns have been conducted—on Merseyside, the north-east, Northern Ireland and the west of Scotland. As I represent a shipbuilding constituency, hon. Members will not be surprised to hear that I am deeply involved in the latter.
In response to the campaign, the Government, advised by DSS officials, introduced a deadline of 1 November 1989 for claims. A group of Labour Members, including my hon. Friend the Member for Newcastle upon Tyne, East, went to see the Minister of State at the DSS on 30 October and secured a significant concession from him and his officials. The Minister agreed to re-examine the decision to revoke regulation 13 of the Social Security (Industrial Injuries and Diseases) Miscellaneous Provisions Regulations 1986, which enables sufferers of industrial diseases to submit back-dated claims for benefit.
The Minister displayed his usual civility and courtesy. He also behaved with compassion. I just wish that his officials would show the same compassion when publicising the test case. We had to look for it ourselves. The Minister reinforced his decision by tabling a statutory instrument which enables late claims for industrial injuries and diseases to be determined in certain circumstances as though they had been made on 30 September 1986.
I am very happy to say that the Minister behaved with compassion. We offer our compliments to him. This is a victory for natural justice and common sense. The campaign is being conducted with expediency. The trade unions are playing an important role in it. The General, Municipal, Boilermakers and Allied Trades Union was instrumental in taking the test case to appeal. I am delighted to work with Robert Thompson, the Scottish secretary of that union, Duncan McNeil and other trade unionists in the local campaign.
The two DSS offices in Sunderland—Phoenix house and Dunn house—have received more than 20,000 applications for back-dated disablement benefit. Not all of them will be successful, and for some of those that are payments will be quite small, but they still impose something of a financial burden on the DSS, which is recognised honourably by the Minister, and on the Treasury.
By and large, applications in Sunderland are for white finger, although I understand that they call it dead finger in the north-east. I am told that a fellow went to see my hon. Friend the Member for Birkenhead (Mr. Field) 907 claiming that he had vibration white bum because he had sat on machinery which vibrated. He claimed that that had given him the disease in his posterior.
The two DSS offices in Sunderland have co-operated with the local take-up campaign. I have been assured by my hon. Friends the Members for Sunderland, North (Mr. Clay) and for Sunderland, South (Mr. Mullin), and by David Towler, Brenda Fulton and Brian Chapman of the Sunderland Trades Union Congress unemployment centre, that local DSS officials have been extremely helpful and co-operative in the take-up campaign. They, and officials in Greenock and Port Glasgow, Belfast, Newcastle, Liverpool and elsewhere, confront considerable difficulties when dealing with such a torrent of claims. The two offices in my constituency have received more than 800 back-dated claims in the past three or four weeks.
My hon. Friend the Member for Workington (Mr. Campbell-Savours) talked about delays that people experience when they go to DSS offices. My worry, when there are take-up campaigns such as these that involve disablement claims, is that the procedure is so long-winded. A clerical assessment is made of the claim. That involves contacting the applicant's former employer, who may have disappeared or gone out of business, to assess the nature of the claimant's work. When a response is obtained, the adjudication officer makes a decision, yea or nay. If his decision goes against the claimant, the claimant has a right of appeal to a local appeals tribunal. That may lead to the claimant having to undergo a medical examination. A second adjudication officer assesses the medical opinion delivered by the medical practitioner. That may lead to the claimant having to appeal to a medical appeals tribunal, which may take several months. That appeals tribunal decision is given to the adjudication officer. That is a tiresome, cumbersome and time-consuming procedure.
There are few hon. Members here tonight, and few other than my hon. Friend the Member for Newcastle upon Tyne, East represent shipbuilding constituencies. Many of the men with whom we are concerned are unemployed and some of them will never work again because of the extent of their disabilities. Some of them are pensioners who have been denied their legitimate rights as a result of the failure of the Department of Social Security to alert them to this test case.
The Government must seek to eliminate or at least to reduce those delays. Even at this late date, I want Ministers at the Department of Social Security to instruct local officers at Lady Lawson street in Edinburgh, on Tyneside, on Merseyside and in Ulster to initiate comprehensive local advertising campaigns which will reach out to such people.
I held a public meeting the other day. I paid for a fairly large advertisement in my local paper the Greenock Telegraph, and as it was a legitimate parliamentary expense, I shall ask the Fees Office to pay for the advertisement. Over 200 men turned up at the public meeting in Port Glasgow last Friday. My hon. Friends from the north-east of England and from Merseyside will confirm that in their areas too the advertising and publicity is being carried out by voluntary organisations such as unemployment centres which are, to put it bluntly, strapped for cash. It is the responsibility of the Department of Social Security to give some much needed assistance to men in those unpleasant circumstances.
908 In a constituency such as mine—and you have heard me say this before, Mr. Deputy Speaker—there has been a decline in the shipbuilding industry. Unemployment, according to the Government's statistics, is still at 14.8 per cent., which is way over the United Kingdom average. Thousands of my constituents are in receipt, directly or indirectly, of social welfare incomes, so they have a direct interest in the quality of service that is provided by the two local Department of Social Security offices. In the main, they receive a good service from hard-pressed officials. Senior officials at the Department of Social Security should not be cutting the number of employees at the Greenock and Port Glasgow local offices; they should be recruiting staff rather than running down staff numbers. Ministers and senior officials at the Department of Social Security must also treat claimants as clients.
I am deeply grateful to all the members of the Public Accounts Committee for examining the quality of performance of staff at local Department of Social Security offices and for enabling me to respond to their excellent forty-fourth report.
§ Mr. Michael Shersby (Uxbridge)
I am glad to follow the hon. Member for Greenock and Port Glasgow (Dr. Godman). It is a refreshing change for an hon. Member who is not also a member of the Public Accounts Committee to speak in this debate. I listened to him with great interest and I hope that he will contribute to future debates. It is also good to hear a Scottish voice in these debates.
Our debate this Session, like all previous debates, is concerned with the endless task of the Public Accounts Committee in searching for value for money, ensuring that the taxpayer receives value for money and, if not, discovering the reasons why and reporting them to Parliament. On Monday morning, when I was considering how I might contribute to this debate, my eye lighted on an article in The Times. The headline read:Former Whitehall chief's criticism. Police `do not give value for money' ".As the House knows, I am parliamentary adviser to the Police Federation. I put down my cup of tea to see who had written the article and who was being quoted. I was especially interested to see that the report concerned an article in the Municipal Journal of 24 November, commenting on the views of that endless searcher after value for money, Sir Brian Cubbon, the former permanent secretary at the Home Office, who before his recent retirement was a frequent witness at sessions of the Public. Accounts Committee.
I shall quote from this important article by Sir Brian. The headline read:Treat 'em mean: keep 'em keen!I thought that the article would be worth reading because I remembered so many occasions on which we had had such helpful discussions with Sir Brian on the importance of value for money at the Department of which he had the distinction of being the head for so many years. I hope that the House will forgive me if I quote briefly one or two interesting passages in the article.
Sir Brian wrote:Lack of money is a powerful incentive for officials to prioritise and get the same results with less money. 'Treat 'em mean and keep 'em keen'. The Home Office's local services have been largely immune from this top-down pressure. Expenditure on law, order and protective services in the 909 United Kingdom has risen in real terms from £5 billion in 1978/79 to £8.4 billion in 1989–90… .A further factor has been the split in financial control, between the Home Office and local authorities. In the case of the police, probation and magistrates' court services, the specific grant from Central Government (51 per cent., 80 per cent., and 80 per cent., respectively) increased the onus on the Home Office to secure value for money in these services, but the main effort had still to come from local control and initiatives.… .In the case of the police, the Audit Commission paper Adminstrative Support to Operational Police Officers records the good progress made by the police, with Home Office and HM Inspectorate support, in streamlining procedures, reducing paperwork and using civilian support units. The scrutiny technique has been introduced. HM Inspectorate use statistical data, which records police activities in a uniform way, enabling trends to be monitored from year to year and amoung groups of forces. Financial information is being added.It remains difficult to find measures, and recording systems, which reliably link increased police manpower with increased effectiveness and efficiency. It remains an open question whether we are getting value for money for all the extra inputs of recent years.… Police civilians have increased by 11 per cent. or more than 5,000 since 1985. Why is it that the number of police officers on patrol or operational duties has increased more slowly?That was an interesting question for Sir Brian to ask. The Times expressed some surprise in reporting the article. It said:The former Permanent Secretary at the Home Office has publicly criticized his former colleagues for failing to secure adequate value for the billions they spend on the police.I thought that it was very interesting to have Sir Brian's views and we so much enjoyed listening to him when he came before the Public Accounts Committee that I thought that it might be helpful for the House tonight if I commented briefly on the forty-second report on financial control and accountability of the Metropolitan police and the courts and prison building programmes for which Sir Brian, while at the Home Office, was responsible.
I should first like to deal with the financial control and accountability of the Metropolitan police, that gallant body of men who keep our capital free of crime to such an extent and who serve us selflessly day and night. In our report we said:Following our Forty-fifth Report, the Government accepted that the arrangements for securing the accountability of the Metropolitan Police needed 'further development' and said that 'a substantial programme of work to that end is in train.' We have not received the outcome of the work, and would welcome details as soon as possible, so that we can consider the matter further as necessary.Some time has elapsed since that was said.
Paragraph 62 of the Treasury minute to the 42nd report —Home Office, Lord Chancellor's Department and Property Services Agency—responds to the Committee's comments and observations on that topic. It was published one year ago and says:The Home Office will submit shortly to the Committee a memorandum giving a detailed report of the programme of work, mentioned in the Treasury Minute of October 1986 … which has been undertaken to improve the accountability and financial control of the Metropolitan Police and to review the information provided to Parliament.We are still waiting. We are now in November 1989 and we still have not had from the Home Office the memorandum that we require on that important subject. I hope that Sir Brian's successor, Sir Clive Whitmore, will give some thought to that matter at an early date.
910 The court building programme is another splendid example of the need for value for money, efficiency and control of which Sir Brian Cubbon talks. The Committee said of the court building programme:At the end of 1986, there still remained a backlog of 21,600 cases awaiting trial in England and Wales with waits between committal and trial as high as 25 weeks. These are matters of considerable concern to us, demonstrating how much more the departments need to do.That is not a good example of value for money, efficiency or economy, and those are the things about which we need to be concerned. It is unacceptable to me—and, I am sure, to all hon. Members—that there are such long waits between trial and committal.
The report also covered the prison building programme, a matter to which I attach considerable importance. I am sure that I speak for most hon. Members when I say that none of us is proud of our prisons. I pay tribute to my right hon. and noble Friend Viscount Whitelaw who as Home Secretary took urgent steps to put that terrible problem right. [Interruption.] As my hon. Friend the Member for Scarborough (Sir M. Shaw) said, progress has been slow.
The report went on to say:We are surprised that the Home Office no longer have a target date for matching total available places with the average prison population and we consider it important that a new target is set.We are concerned that the recurring and apparently unforeseen surges cast serious doubt on the Home Office's ability to project accurately future prison populations.That is a pretty tough comment on the efficiency of the Home Office.The report also said:By 1999 some 14,500 prison places, about one quarter of the total, will still be without access to night sanitation. We consider this to be unacceptable and urge the Home Office to find ways of bringing about a faster improvement in conditions.In paragraph 26 of the report the Home Office makes the point that progress is being made towards dealing with the difficult problem of night sanitation. It is totally unacceptable in 1989 for men and women to be confined to prisons and for a large percentage of them still to be required to slop out, which means having no access to night sanitation and being obliged to use a bucket.
I hope that when my hon. Friend the Financial Secretary replies he will have something to say about what is being done to improve the efficiency of the prison service and to bring about the much-needed improvements in our Victorian prisons.
Another aspect of Home Office responsibility referred to in the report is a matter on which we had the privilege of listening to evidence from Sir Brian Cubbon while he was still in office. Paragraph 8 refers toserious over-loading of the courts, 'intolerable' delays in bringing cases to trial.We went on to say thatthe Committee concluded that insufficient progress had been made towards meeting the objectives of the programme.We also said:Measures taken by the Lord Chancellor's Department to reduce the backlog of cases and waiting times in the Crown Court—especially in London and the South East—had produced no more than a marginal … improvement…Bearing in mind also the consequent deleterious effects of the huge backlog on overcrowding in local prisons and remand centres … recommended that the Lord Chancellor's Department and the Property Services Agency—bringing in the Home Office, as necessary—should take stock at the highest level of the programme's objectives, achievements and problems.911 I am sure that when Sir Brian wrote the splendid article under the headingTreat 'em mean: keep 'em keenhe was not referring to people slopping out in prisons or to those who have to wait for an intolerable time before their cases are heard. He may, however, have been referring to something that was mentioned in The Times the efficiency of his colleagues in the Home Office in dealing with those important matters which have caused us such great concern. We know that a crash programme has been initiated to provide a minimum of 12 temporary court rooms in London, but they will have a limited life expectancy and there is still a serious backlog.
I hope that when Home Office officials look at the report of today's debate and think about what we have said in the light of the comments of that distinguished public servant, Sir Brian Cubbon, there will be rapid progress towards dealing with those serious problems. They are not problems that can be left. They need to be dealt with now. It is unsatisfactory to have the system operating as it is with so many delays and so many people confined in appalling conditions.
In the article in the Municipal Journal Sir Brian was quoted as saying:Police civilians have increased by 11 per cent. or more than 5,000 since 1985. Why is it that the number of police officers on patrol or operational duties has increased more slowly?One of the reasons is that many police officers are today employed in investigating each other. One force is investigating another to find out what went wrong in a particular set of circumstances. As we all know, the West Midlands police force is being investigated by west Yorkshire and the Surrey force is being investigated by Somerset and Avon. I could go on but hon. Members on both sides of the House know about the problem. Many officers are deployed in dealing with investigations into complaints, some of which will turn out to be trivial. A great deal of public money is being spent. Some of these cases, of course, will turn out to be serious—I am not trying to cover that up—but it is important, when considering Sir Brian's strictures, to consider the alternative.
The Police Federation of England and Wales takes the view that there should be an independent police complaints authority with its own investigative branch, which could spend its time carrying out necessary investigations and leaving police officers in forces throughout the country to get on with the important job of policing. I hope that the PAC will turn to that matter when the time is right.
The forty-fourth report is on the quality of service to the public at DSS local offices. It is a particularly good report and it was welcomed by staff at social security offices throughout the country, who felt that a Committee of Parliament was at last taking an interest in the appalling conditions in which many of them have to work. Those conditions are especially acute not just in inner London but in parts of outer London.
I have discussed these matters with the staff at my local DSS office in Uxbridge and I know of their anxiety. Happily, the increased expenditure on improving offices in London and other parts of the country has greatly improved them and working conditions in them—but there is another problem.
912 In the borough of Hillingdon, in which my constituency lies, there is great competition for competent staff to do the jobs that officers in the DSS offices have to do. During the course of the evidence that the Committee took from the permanent secretary, Mr. France, I asked what consideration the Department was giving to the introduction of geographically related pay, and whether consideration had been given to the precedent set by the nurses' pay award, under which a supplement is payable over and above London weighting. Mr. France told the Committee that his Department, in common with other Departments, was introducing local pay additions for areas around London, amounting to £600. That is a welcome step in the right direction, but it is not a very large sum.
I asked Mr. France whether consideration could be given to geographically related pay throughout the country. He replied:Geographical pay is gradually beginning to appear.That is welcome and I hope that further progress will be made.
There is another problem. There is great competition in Uxbridge between the Department of Social Security and the London borough of Hillingdon for exactly the same sort of staff. Local authorities such as Hillingdon borough council can pay whatever they judge the appropriate rate for the job. Consequently, the DSS is battling to retain staff who are frequently siphoned off by local authorities. That also applies in many other parts of London and, for all I know, in other parts of the country.
Thus there are differing rates of pay in the DSS, which is an agency of national Government, and a London borough council, which is an agency of local government. That is making it difficult for DSS offices to retain local staff who have worked there for many years and who are experts in their field. They are tempted to go and work for the borough council. As £600 per year, welcome though it is, is not much these days, I hope that my hon. Friend the Minister will give some thought to this.
Before I took part in this session of the PAC I made a number of inquiries among my friends in the Department of the Environment to discover whether overall strategic consideration was being given to the problem of the pull by local government away from the offices of a Department of State. No such consideration is being given, so the problem will persist unless something is done about it. I mention this matter on the Floor of the House because I hope that some thought will be given to it. It is not an easy matter to solve, but perhaps the PAC could deal with it at an appropriate time.
It is a privilege to take part in this debate and to have served on the PAC under our distinguished Chairman. I look forward to many more good reports. Like the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), no doubt, I firmly believe that they are one of our best protections for ensuring value for money for the taxpayer.
§ Mr. Tim Smith (Beaconsfield)
I start by endorsing what my hon. Friend the Member for Uxbridge (Mr, Shersby) has just said. I, too, regard it as a privilege to serve as a member of the Public Accounts Committee. It is one of the most effective Select Committees because it can draw on the services of 900 staff. Most Select Committees have perhaps two or three special advisers. We are fortunate because we rely so heavily on the staff of the 913 National Audit Office, who produce the reports on which our inquiries are based. Of course, those reports are not being investigated today, but they form the basis of our inquiries.
We are also fortunate to have the calibre of staff that the NAO employs. I know that it has plans not only to maintain but to improve the quality of its staff and to increase the number of value-for-money reports that it makes.
Although I have said that we are effective, perhaps we should have some independent assessment of our effectiveness; perhaps we could do a little more to blow our own trumpet. The Audit Commission is good at making regular pronouncements about the total value of the savings that it has recommended could be made if local government adopted its proposals. We could do more to quantify the savings that have been recommended by the PAC.
In this respect the Treasury should regard the Committee as an ally. We have a common objective; I am sure that my hon. Friend the Financial Secretary would agree that it is to improve value for money. I should like to make a proposal: my hon. Friend should try to see what can be done to improve the quality of Treasury minutes. Although I am sure that there is no deliberate attempt to obfuscate the issues, the way in which Treasury minutes are set out could be greatly improved. If the PAC first clearly tabulated what its recommendations were, the Treasury could then follow the practice of other Departments when replying to Select Committee reports. For instance, I have just read the Trade and Industry Select Committee report on financial services in the European market. Each recommendation is set out, followed by the Government response to it. That would be a useful way of proceeding. Will my hon. Friend consider that proposal?
I want to refer to four reports which form a representative sample that well illustrates the value of the different aspects of the Committee's work. The first is one to which hon. Members have already referred—the twenty-sixth report on coronary disease. It was an interesting report because it was the first time that the NAO had examined the output of the National Health Service, rather than the input. It had previously examined estate management and the way in which operating theatres are used, for example, but this report inquires into the objectives of the NHS. What is it in business for? The obvious answer is: to ensure that we all enjoy better health. What is one of the main killers in Britain? The answer is: coronary disease. How effective is Government policy in tackling it? Compared with some other countries it is not very good, and there is much room for improvement.
I referred earlier to the strikingly disproportionate amount spent on treating the problem as opposed to trying to prevent it. I shall not repeat the figures that I gave, but this needs examination. Curing heart disease is an expensive business, so we should devote more resources to trying to prevent it in the first place.
There is also a case for better ministerial co-ordination. When we asked questions about it in the Committee we were told that it was a matter for Ministers, so it seems right to mention it to my hon. Friend now. There are ministerial committees that deal with drugs and AIDS, so 914 there seems to be a strong case for a ministerial committee to deal with coronary disease, because trying to prevent it is clearly the responsibility of more than one Department—although the Department of Health has a major responsibility.
The example of tobacco taxation immediately demonstrates that the Treasury has a major responsibility. I know that when Treasury Ministers consider the Budget, many other considerations are regarded as more important than the nation's health. However, Treasury Ministers would surely agree that the price mechanism is the most efficient way of influencing people's behaviour. All the evidence shows that if we increase the price of cigarettes, we curb demand.
§ Mr. Roy Beggs (Antrim, East)
I thank the hon. Gentleman for giving way. Does he agree that, as the price of tobacco products has increased in the past, we have disadvantaged our own people because jobs have been lost in production in the United Kingdom and laid open the opportunity for cheap imports to this country without achieving a reduction in the use of tobacco products?
§ Mr. Smith
The hon. Gentleman puts the argument which has been put to me many times by the tobacco industry and of which I am well aware. There are always different considerations, but I have no doubt that price is an extremely effective way of influencing people's behaviour. The report shows that three principal factors determine whether people suffer coronary heart disease, and smoking is one of them. That is an important consideration.
The thirty-second report on the financial management of the Welsh Office is interesting. It is the first time that the National Audit Office has examined a whole Department. It looked at the financial management of the entire Department. The Welsh Office is a relatively small Department and spends only—perhaps I should not say only—£3,500 million and therefore it was possible to subject it to such scrutiny.
When the permanent secretary attended, I asked him whether he had a job description. He told me that he had not. I asked him how much of his time he spent on policy advice rather than managing the Department. He estimated that he spent more time managing the Department than on policy advice, which I thought was interesting. I asked him whether he regarded senior officials in the Department as a management board. There has been a change in Civil Service culture during the past few years as a result of financial management initiatives and other initiatives taken by the Government. There are more officials in Government who see themselves as managers. I am still clear that giving good quality advice to Ministers is probably seen as the priority.
Another factor in this context is the lack of accountants working in line management positions in Government. One might think that financial controllers in Government would be accountants; they are not. Such is the generalist philosophy and culture of the Civil Service that accountants are thought of as people to be put at the end of the corridor and consulted on financial matters. They are not placed in positions with a degree of financial responsibility. There are very few accountants working in line management positions. The other day I was talking to an internal auditor from the DTI who told me that there were as few as 300 throughout central Government.
§ Dr. Godman
Given the Committee's practice of comparing different Departments, does the hon. Gentleman agree that, in the absence of a Scottish Affairs Select Committee, this Committee could perform a useful, nay, a valuable, function in examining some aspects of the financial management of the Scottish Office?
§ Mr. Smith
I am sure that the hon. Gentleman appreciates that we regularly look at matters relating to Scotland. We recently looked at the operation of the procurators fiscal and aspects of the Health Service in Scotland. If the hon. Gentleman is saying that we should look at the overall financial management of the Scottish Office, that is an interesting idea that we might well put to the National Audit Office.
The third report to which I shall refer is the ninth report on the Overseas Development Administration and multilateral aid. I do so because the Committee has not always criticised every Government Department. In this case, we gave the ODA good marks for what it was doing. Our general conclusion in paragraph 18 was:we saw the C & AG's Report as providing Parliament with assurance that the Overseas Development Administration have adopted a generally sound approach to monitoring and controlling the Multilateral Aid Programme.We had some reservations, as we always have. It is our job to criticise and we always look for the weak points. But when a Department is well run, and managing itself in a satisfactory way, it is important to say so and in that case we did.
The forty-sixth report in the last Session, 1987–88, on the management of the family practitioner services is one of many reports on the National Health Service produced by the Committee. Obviously, we made detailed proposals for improving the management of family practitioner committees and have made many other detailed proposals in other reports on the NHS. Many of our recommendations have found their way into the Government's White Paper, the NHS review. That may come as a surprise to some people who apparently think that the White Paper is designed to undermine the National Health Service. However, its simple objective is to improve the efficiency and effectiveness with which the taxpayer's money is spent in the Health Service.
In the Public Accounts Committee, we see examples almost every month of where savings could be made and more money devoted to improved patient care. I am pleased that many of the Committee's proposals have found their way into the White Paper and are being, or will be, implemented when the National Health Service and Community Care Bill is enacted. That is an important point.
I congratulate the Committee's Chairman, the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), on his work. His is a most onerous task which he has carried out with great distinction.
§ Mr. Nicholas Brown (Newcastle upon Tyne, East)
I identify myself and the Opposition with the remarks of the hon. Member for Scarborough (Sir M. Shaw), who congratulated my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) on the way in which he chaired the Public Accounts Committee during the past year. My right hon. Friend does an enormous amount of hard work, and I know that he commands the respect of the rest of the Committee and the House. I thank him and 916 the other members of the Public Accounts Committee for the work that they do and for the bipartisan spirit in which they do it. It is important to the authority which the reports carry when they come before the House that they are produced in a bipartisan spirit and reflect a consensus among the Committee members. That unanimity gives them enormous authority. The House takes the Committee's views seriously.
Therefore, it is all the more damning that the substantial losses to the Exchequer which have been identified in some of the reports relate not to failures in public administration, but to losses sustained as a direct result of the Government's ideological commitment. The bill for dogma is now being presented to the nation. In some of the reports the Public Accounts Committee has identified a separate matter: where public expenditure has been foolishly forgone, resulting in long-term inefficiencies and losses to the Exchequer. I shall deal first with this issue before referring to the reports which identify losses to the Exchequer due to political decision making rather than administrative inefficiencies.
When the House debated public expenditure in February, we found a new word for public expenditure foolishly forgone. We introduced to the English language "Lamontable" and the concept of Lamontable spending decisions. Of the Lamontables now under consideration, the twenty-sixth PAC report on coronary heart disease makes important reading, and it has been referred to by several hon. Members. It is not the first time that the PAC has considered the issue, but it still feels that it is necessary to express its concern at the failure of the Department of Health to evaluate the full potential of spending on prevention to save on treatment costs.
As the hon. Member for Beaconsfield (Mr. Smith) said" factors such as heredity and age are unavoidable. None the less, the Committee draws attention to the three principal risk factors, which are smoking, blood pressure and cholesterol levels. These factors are all avoidable, and the Department must do more than admit that more needs to be done in heart disease prevention. The Committee highlights the obvious point that more resources devoted to prevention would result in long-term savings for the Department and to better lifestyles for many of our citizens.
Several hon. Members have referred to the administration of national museums, galleries and collections. The Committee noted that the Treasury expressed the view that there was scope within the arts budget to meet urgent priorities, but the museum service claims that it is seriously under-funded to meet its needs. The result is an inability of the service properly to account for the care and maintenance of, in some instances, priceless collections that are in its charge. The Committee noted the lack of reliable quantified information on the extent of the problems faced by the service and the resource consequences of that. It is an issue to which the Committee will no doubt have to return when better information is available.
It is right that the House should assert now that it is in the national interest that these matters are brought to a satisfactory conclusion before the poor storage conditions and the backlog of conservation to which the Committee refers in the case of some national collections reach their logical conclusion and important collections are irretrievably damaged or lost to the nation for ever. I was as horrified as the Chairman of the PAC, my right hon. 917 Friend the Member for Ashton-under-Lyne, when the Victoria and Albert museum stated that it was running the risk of irreparable damage to some parts of the national heritage. I am sure that the House considers that to be unacceptable. If it is the consequence of public expenditure foolishly forgone, it is Lamontable that we must pay the price for it.
Exactly the same point is made by the PAC, although in a different context, in its twenty-eighth report on road maintenance. Several hon. Members, especially those with constituency interests, spoke on the issue with considerable feeling. The Department of Transport is criticised for continuing uncertainty, for failing to budget, for having an irregular maintenance programme and for taking money from that programme to be used in the new-build programme instead. The report highlights the long-term public expenditure consequences of neglecting maintenance and refers to the Department's estimates of the long-term cost of a decision to defer the spending of about £28 million in 1988–89. It is estimated that this decision could lead to on-costs of about £60 million to £120 million over the next three to four years.
The Committee rightly doubts whether the benefits lost by postponing part of the maintenance programme will ever be recovered by spending the money on new build instead. It considers this to be a striking example of short-sightedness in saving now but spending later. This is an example of public expenditure foolishly forgone, and the decision will cost the taxpayer more in the long run. It is another Lamontable decision. The report was published at the end of June and the Committee was able to take note of the new spending commitments which were announced in April-May for the Department of Transport.
The announcement was heralded by a speech delivered by the then Chief Secretary to the Treasury. There were those who suggested cynically that that was because the Chief Secretary expected to be moved to the Department of Transport in the forthcoming Government reshuffle. I consider that to be an unworthy and cynical view. It was always my opinion that the then Chief Secretary was destined for higher things. Now that he has moved up a rung, as it were, the previous Financial Secretary has moved to fill his job and the previous Economic Secretary is now the Financial Secretary. It is surely an appropriate moment for me to welcome the Financial Secretary to his new job and to say that I look forward to winding up these debates with him for the rest of the Parliament, and in the same spirit that I did with his Lamontable predecessor.
§ The Financial Secretary to the Treasury (Mr. Peter Lilley)
The hon. Gentleman will have to find a new pun now.
§ Mr. Brown
My other pun, as fans of our consideration of Finance Bills will know, is to refer to brief gaps in our consideration of them as lacunas. He who was the Economic Secretary is now the Lilley of lacuna. Perhaps that will not fit into the spirit of the debate, and that may explain why the Opposition seem unable to retain Members to serve on Finance Bill Committees.
It would not be a PAC debate without mention of the Ministry of Defence. The three recurring themes in these debates are the misdeeds of the Northern Ireland Office, the misdeeds of the Ministry of Defence, and the 918 Government's lack of enthusiasm to clamp down on a wide range of serious fraud. This year the Ministry of Defence, even by its own standards, has managed to secure a substantial amount of the Committee's fully justified attention. No fewer than 10 of its reports refer to matters that concern the Ministry.
The thirty-first report deals with the reliability and maintenance of defence equipment. It builds on the consideration that the Committee gave to the issue way back in 1979. In that year, it was noted that an improvement in the reliability and maintenance of defence equipment was potentially the most cost-effective measure directly open to the Ministry in that sector. The PAC was therefore right—it was a reasonable thing for it to do—to return to the matter about 10 years on to ascertain what progress had been made. According to the Committee, there had not been very much progress.
The Ministry accepts that unreliability probably costs as much as £1 billion a year. It considers 50 per cent. to be a fair goal for justifiable savings. As Sir Peter Levene rightly said, reliability costs money but that the more we spend on it the more we shall save. It is fair to observe, as the Committee does, that not much of a start seems to have been made 10 years on. The PAC drily observes that it looks to the Ministry to make early progress. This is another example of public expenditure forgone leading to greater cost to the taxpayer in the long term.
If the Ministry ever begins to take notice of the PAC's reports or of these debates, I hope that it will consider these matters and make a start to improve the quality of the type 23 frigate programme. My right hon. Friend the Member for Ashton-under-Lyne has said that there are only 30 reliability and maintenance specialists in the Ministry. As the report states, however, the Ministry has a procurement budget of about £9 billion.
The Ministry of Defence provides a good example of the Committee's work in the second of the two areas to which I referred at the beginning of my speech, and that is the loss of moneys to the Exchequer as a result of Government dogma, not maladministration.
It would be amazing if this debate were to reach a conclusion without reference to the Committee's forty-eighth report on the sale of Royal Ordnance plc. The Committee rightly makes the point that, prior to the sale of Royal Ordnance, the MOD did not explore the possibility of redevelopment at Waltham Abbey or Enfield and nor did it obtain alternative valuations of those sites on the assumption that redevelopment might be approved in future. The Government sold Royal Ordnance, including all its sites, in April 1987. It was bought by British Aerospace for £190 million. The Waltham Abbey and Enfield sites were bought for £3.5 million, but a subsequent valuation by the City firm of Warburg suggested that the sites could be worth up to £462 million when they had been redeveloped for industry and housing.
The PAC said:We note that BAe could make a substantial gain on their sale or development without benefits accruing to the taxpayer beyond the sale price paid by BAe.Of course, British Aerospace has also purchased the Rover Group. It is not the first PAC report to bring privatisation issues to our attention. Hon. Members who recall last year's debate will remember the unhappy report on the Rolls-Royce privatisation. They will also remember the last-minute debt write-offs and the pressure from the management of Rolls-Royce just before it was due to go 919 into the private sector. There is no doubt that next year we shall again consider a PAC report on the Rover Group, which will inevitably make similar points.
Substantial sums of public money have been unnecessarily given away to pursue the Government's ideological commitment to privatisation and with no consideration of the public purse or even of issues of common sense. If it had happened just once, it could be understood, but to have a debate on this matter last year, this year and probably again next year shows substantial Government contempt for the public purse.
§ Mr. Shersby
I do not wish to be controversial, but surely it is necessary to balance the decision on the Rover Group with the substantial sums of taxpayers' money that have been used to shore up the Rover Group for many years. I think that the figure is about £3.5 billion. Without being controversial, I wish to point out that that is also a substantial sum of money and that many taxpayers were heartily sick of it.
§ Mr. Brown
I am content to await the eventual PAC report on these matters. No doubt we will return to them next year. My understanding is that those taxpayers were about to realise a return on their investment in Rover. Perhaps the PAC will say that, perhaps it will not, but one thing is certain—that the PAC cannot avoid the issue of the potential speculative gain on the land owned by Rover and by Royal Ordnance. That point was emphasised in the report on Royal Ordnance, and I expect that it will be emphasised again in the report on Rover. I may be wrong, and I do not wish to prejudge the issue, but that is what I expect. Whatever one's political view of privatisation, and I am opposed to it, it is possible to carry out a privatisation programme and preserve the legitimate interests of the taxpayer on land sales—land set at a certain value, but which also has a substantially increased and enhanced speculative value. I wish that the Government had taken that point on board before transferring substantial assets to the private sector.
Again, it would not be a PAC debate without some mention of unacceptable levels of fraud and the Government's failure to deal with them. Their reluctance to take firm action across a whole range of areas was a major feature of last year's debate. This year, the Committee is concerned at the level of fraud on the second regional development grants scheme. It regards it as a unacceptable that the majority of cases to date have not been detected by officers of the Department of Trade and Industry. The Committee makes the important recommendation that there should be independent accountants' reports on the number of jobs created as a simple, effective and straightforward safeguard against fraud.
It seems appropriate to move on from independent accountants' reports and independent monitoring to the report on the urban development corporations. Systematic monitoring of performance is recommended for the urban development corporations, and the implementation of that recommendation is long overdue. The Committee has so far looked only at the London Docklands and the Merseyside development corporations, but it will at some stage have to turn its attention to other more recent urban development corporations. There is no evidence that the Department of the Environment is making any serious 920 effort to control or restrain those undemocratic and unaccountable institutions which are spending significant sums of public money.
In its twentieth report on the London Docklands and Merseyside development corporations the Committee identified four issues—first, again, the lack of control over land valuations and sales; secondly, the misuse of consultants, a matter that my hon. Friend the Member for Workington (Mr. Campbell-Savours) raised in last year's debate; thirdly, the failure to protect the public purse in profit-sharing arrangements; and, fourthly, and most significantly, poor management. I strongly suspect that variations on those four items would be discovered if scrutiny were extended to the other urban development corporations. I hope that at an appropriate time the Public Accounts Committee will undertake that task.
In trying to do justice to the Committee's reports I have drawn two themes from them—public expenditure foolishly forgone, the failure to spend 1p now costing £1 later; and the losses that have been suffered by the Exchequer as a result of political decision making rather than maladministration, most noticeably through the Government's privatisation programme. I hope that at some stage the Public Accounts Committee will be able to take an overview of the cost-effectiveness of the Government's privatisation programme. Then the point made by the hon. Member for Uxbridge (Mr. Shersby) could be weighed against the fears, some of them confirmed, some yet to be confirmed, of Opposition Members.
The Public Accounts Committee published two reports on the services offered by the Department of Social Security. In its forty-fourth report the Committee considers the quality of service to the public in what were then local Department of Health and Social Security offices. After making a number of points about the organisation of local offices, manpower levels, high staff turnover and the direct relationship between dissatisfaction with facilities and expenditure on local offices, the Committee expressed its concern about the image of the social security system and the narrow interpretation of the DSS of its responsibility for advising and encouraging claimants. The Committee returned to some of those matters in its thirtieth report, noting an estimated level of incorrect payments of between £34 million and £89 million, stating that that was clearly unacceptable. The Committee expressed concern at the number of errors in the social fund account and the frank admission that what was disclosed was unsatisfactory and unacceptable.
My hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) was right to raise the question of claimants suffering from the industrial disease vibration white finger. That does not affect all areas equally; it is confined to constituencies where heavy industry dominates, particularly heavy engineering and shipbuilding, but that industrial illness and the way in which the Department of Social Security is dealing with it deeply concern those communities that are affected.
My hon. Friend referred to a figure of 20,000 claims submitted in Sunderland alone. They will not all be substantial but a great number of them will be. I am reminded of the deluge of industrial deafness claims that occurred when I was an official of the General Municipal Boilmakers and Allied Trades Union before I was elected to this House. At the peak of those submissions, the union's solicitors had an office with filing cabinets all 921 around the walls labelled from A to Z, and each file was visited once every three months. Ultimately there were about 4,000 successful claims in the Newcastle area alone. That is a prime example of people suffering industrial injury as a consequence of the community in which they live and of a traditional form of employment in that community. Vibration white finger is a similar issue, and my hon. Friend was right to raise it in the context of the report.
The Public Accounts Committee made the point that the Department is taking steps to improve the service provided by local offices and intends to increase its targets year by year. However, the PAC comments also that the Department's services are provided to 23 million callers each year and that, in the main, they are citizens who are least able to turn to any other form of advice and who rely on the state to treat them fairly. It is important that the state treats those citizens fairly and does not send them somewhere else for the information that should be provided by a Government Department. The reports also present some stark contrasts in providing an overview of what is happening in this country. They tell of the transfer of public assets from public control to wealthy, private companies and of the generous arrangements made to facilitate such transfers. Other PAC reports tell of the neglect of public services, inadequate funding of the arts, lack of road maintenance, and failure to spend money also on preventive medicine. Two of the reports reveal the mean and squalid treatment received by the least well off in our society in respect of services delivered by the DSS. The Public Accounts Committee presents a snapshot and an indictment of Tory Britain.
§ The Financial Secretary to the Treasury (Mr. Peter Lilley)
This is the first occasion that I have had the privilege to reply to a debate on the work of the Public Accounts Committee. In preparing for it, I came to realise what a daunting responsibility it is—not only because of the enormous volume of reports involved but because of their scope, range, quality and value. I join with other hon. Members in paying tribute to the Committee's Chairman, the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), who brings to it both his personal authority and considerable experience, which enhances the work of what probably has always been the most powerful and important Committee in this House.
It is not just officers in the public service but Ministers who take seriously the views of the Committee and of its Chairman—and not just what it says but what it might say. The hon. Member for Nottingham, North (Mr. Allen) made a valid point when he remarked that the Committee could refer only to things that had happened, but it also casts its shadow ahead of it and makes everyone very aware of, and more cautious about, their own actions. I pay tribute also to the Comptroller and Auditor General, as well as to the staff of the National Audit Office, for their excellent work in preparing the reports.
The hon. Member for Bolsover (Mr. Skinner), with whom I am often in agreement on constitutional matters, was wrong to suggest that the Committee's practice of reaching unanimous agreement is detrimental and open to criticism. Whatever our views on the precise role and scope 922 of the public sector, we can surely all agree that it should carry out that role by providing value for money and maintaining the highest standards of integrity in the way in which that money is spent. Through its reports, the Committee does a great deal to achieve that aim.
Inevitably, I cannot respond to all the many points that have been made—which themselves are but the tip of an iceberg whose bulk, in the form of the reports themselves, lies below the Dispatch Box. Let me deal first with the report on the quality of service provided in DSS offices.
It is, I agree, very important for clients of the social services, who are often among the most needy and vulnerable members of society, to receive the best, most rapid and most courteous service that we can reasonably provide. The social security reforms that we introduced some years ago have made the system easier for clients to understand and simpler for the authorities to administer, and that is already showing in the improved clearance times for—among others—income support claimants. In 1987–88, they had to wait for an average of 6.3 days for their claims to be cleared; last year, they had to wait for an average of 4.9 days. The time that they spend in the office —including waiting time—has been reduced in that period from 26 minutes to just under 20.
Hon. Members have expressed doubts about the DSS's survey figures as compared with those provided by Gallup's survey. Let me point out, particularly to the right hon. Member for Ashton-under-Lyne, that the Gallup report was retrospective—it asked people to think back to their visits—whereas the DSS figures are collected at the time of the visits. Early in the new year, however, the DSS is to carry out the first external and independent poll of customers' opinions, which will be made available to the House and which will, I believe, be of value.
I may respond in more detail to the hon. Member for Greenock and Port Glasgow (Dr. Godman) in writing, although his contribution was most welcome. Let me tell him now, however, that the new complementing system will take effect in April 1990. It will be performance-based —that is, it will make staffing levels fit agreed performance levels in each office. The Government do not accept that staffing levels are wrong, but we hope in time to improve the precise allocation and complement of staff.
§ Dr. Godman
I am obliged to the Minister. May I point out, however, that considerable anxiety is felt by many of my constituents who have made claims in respect of white finger disease? Their fear centres on the likelihood of the Treasury forcing the DSS to close down the take-up campaign by bringing forward a closure date for such claims. Will the Minister give me an assurance that that anxiety is misplaced, and that the Treasury would do no such dreadful thing?
§ Mr. Lilley
The Treasury never does dreadful things. I will, however, give the hon. Gentleman an assurance that I will look into the matter and write to him—and, if he wishes, that response can be made public. I am grateful to him for raising an issue that is plainly important both to many of his constituents and, more widely, to the industries affected.
The next report refers to the sale of the royal ordnance factories. We are satisfied that the arrangements for the sale of Royal Ordnance were designed to ensure that the competition was as wide-ranging as possible and open to bidders. Care was taken to ensure that the pressure on the 923 bidders was maintained until the final decision. We are confident that the price received for Royal Ordnance—£190 million—was a true reflection of its market value. It was twice the value that we were advised could have been obtained the previous year.
The media claims about the site values of the two main sites that have been mentioned in the debate have been demonstrated to be enormously exaggerated. The professional valuations were in the range of £25 million to £37.5 million—only 8 per cent. of the figure extensively quoted in the media. Quite clearly it was a mistaken report.
§ Mr. Lilley
It was produced by an analyst and as I used to be one I know how unreliable analysts' reports can be. The valuation report was reasonably reliable.
The right hon. Member for Ashton-under-Lyne mentioned the importance of valuing sites on an alternative-use basis. Valuations of the two sites were made on an alternative-use basis, but they were found to be lower than those made on a current-use basis and for that reason they were not made public. However, they demonstrated that the current-use valuations were the highest and the most relevant.
The right hon. Gentleman also mentioned the possibility of selling off in tranches. That is obviously much easier to do in respect of a public company than in the case of a private treaty sale, but occasionally we have sold off public companies in tranches as in the case of Cable and Wireless.
The right hon. Gentleman and a number of others, including my hon. Friend the Member for Scarborough (Sir M. Shaw), expressed concern about the report on museums and galleries. I am not sure whether the report fully recognised that the Committee's concerns are already being addressed.
Improved corporate planning is being required of all the main museums and galleries. In 1987 we introduced three-year planning which makes it easier for them to plan ahead. In 1988 we announced a major increase in grant-in-aid for building and maintenance work, and the funding emphasis on conservation, storage and documentation has been enhanced. The total provision for museums and galleries has risen from £158 million in 1988–89 to £182 million in 1990–91—a 15 per cent. increase —and will reach £200 million in 1992–93—a 27 per cent. increase. That will provide a considerable increase in resources available to museums and galleries to carry out the work which the Committee rightly recognised is so important.
I must tell my hon. Friend the Member for Scarborough that record-keeping will be an important aspect of corporate planning required of museums and galleries and I understand that many museums are using computerised records which will give them a much better ability to identify what they have in their collections.
The report mentioned by the greatest number of right hon. and hon. Members was that dealing with coronary heart disease. The right hon. Member for Ashton-under-Lyne and my hon. Friend the Member for Hertfordshire, South-West (Mr. Page) were disappointed in the fall in the United Kingdom rate of coronary heart disease. I understand that the fall has been greatest in countries where the level of disease initially was the highest. It is not 924 as high in the United Kingdom as in a number of other countries. It has declined here, particularly among younger groups, among which it fell 30 per cent. between 1970 and 1985. Those younger groups seem to be maintaining a more healthy lifestyle as they move into the older age groups, along with me.
My hon. Friend the Member for Beaconsfield (Mr. Smith) and other hon. Members emphasised what they saw as the disproportion between expenditure on prevention and on treatment. It would not be sensible to expect the numbers to bear any mechanical or arithmetical relationship. We recognise the importance of prevention, and in England we are introducing the "Look After Your Heart" campaign, which I understand is the first multifaceted campaign in the world directed at coronary heart disease. It recognises the many aspects that render people liable to the disease. Quite considerable sums are being spent, not only from the public purse but by private companies, which are being encouraged to participate in the campaign.
My hon. Friend the Member for Beaconsfield mentioned the importance of tobacco taxes. They are a crucial way of discouraging smoking, which is a major cause of heart disease. In my previous capacity—Lilley of lacuna—I was the guilty man responsible for not raising tobacco taxes as much as my hon. Friend and other hon. Members would wish. I assure the House that the Treasury discusses this issue closely with the Department of Health and takes health considerations into account. It is in part because of that, and apart from our insatiable desire for money, that we have such a high tax on tobacco. As I recall, it has increased in real terms by about 40 per cent. since 1979. The main decline in the use of tobacco over the years resulted from cultural changes, undoubtedly helped by the rise in tobacco tax.
My hon. Friend the Member for Hertfordshire, South-West mentioned the importance of defibrillators and training for ambulance personnel. The voluntary extended training of ambulance staff is new; 1988–89 was the first full year of the National Health Service training authority's package. It is not therefore surprising that some doctors and consultants find it difficult to accept that a sea change is taking place and that ambulance staff are now capable of being trained for, and able to supply, advanced resuscitation and life-saving skills. The Department of Health is convinced that paramedic training and practice will form an increasingly important element within the accident and emergency ambulance service, which is why the proposal for increased salary to paramedics was made. We are taking action on that front.
§ Mr. Page
I appreciate the advances that are being made, but does not my hon. Friend find it frightening that only last year we began to get our act together on this vital matter? The spread of best practice and the introduction of defibrillators should have been done by the National Health Service through the Department of Health years ago, not last year. Does my hon. Friend share my concern?
§ Mr. Lilley
I understand my hon. Friend's concern, but many of those better qualified than he or I believed until quite recently that it was not desirable for treatment to be carried out by ambulance personnel. Who are we to ignore medical advice? My hon. Friend's attitude is much more in tune with the majority of the medical profession than it was in the past.
925 The other medical report that we debated was on the use of operating theatres in the National Health Service. I agree with the right hon. Member for Ashton-under-Lyne that it is a matter of concern that such important pieces of plant and equipment are not fully utilised. He said that only half the available theatre time was fully employed. That is significant. The report gives a figure of 20 per cent. spare capacity. That demonstrates that there is scope for improving value for money in the Health Service. I noted a comment in the report that:Traditional practices and habits, framed for the convenience of consultants and staff, must be revised as necessary".That is in line with the Government's attitude and probably with the attitude of the whole House. Indeed, it is part of the philosophy of our planned National Health Service reforms, although they will not necessarily have universal support.
The NHS reforms wil help make better use of operating theatres within the NHS by making two changes. First, contractual arrangements for health care will become more widespread. Hospitals will have a direct incentive to use their facilities efficiently, attract patients and use theatres more fully because cash will follow the patient. That is a vital and important reform of the NHS which will encourage greater efficiency. The other change will be in capital accounting. Until now, there has been no proper capital accounting in the NHS so it is not surprising that proper use is not always made of the large amount of capital resources in the NHS.
I now come to the report on the highway maintenance backlogs, which was mentioned by several right hon. and hon. Members. The right hon. Member for Ashton-under-Lyne who is Chairman of the PAC said that roads were not built to last long enough and that the Department of Transport would prefer to press on with building roads rather than fill gaps in knowledge about road design. The United Kingdom is a leader in road design backed by major research programmes. Over the years, national roads have usually performed better than expected by carrying more traffic than they were designed for before having to be rebuilt. Designs were substantially upgraded in 1985 and roads are now being built to last 40 years before they need to be rebuilt.
Over £670 million was spent on the capital maintenance of national roads and bridges over the past three years. That is a 220 per cent. increase in real terms over the 1978–79 budget.
The Autumn Statement prepared by my right hon. Friend the Chief Secretary to the Treasury showed that we would spend £1.3 billion on capital maintenance on roads over the next three years which is a further real increase of 40 per cent. Planned spending over the next three years should be enough to eliminate backlogs of road maintenance as currently estimated. That will be welcomed by members of the Committee, both in their capacity as guardians of the public purse and as frequent users of the motorways.
The next report is on the reliability and maintainability of defence equipment. The Ministry of Defence is in full accord with the Public Accounts Committee's recommendations about improved procurement procedures. A director of reliability was appointed in July 1989. The Ministry is reviewing the future requirement for reliability 926 and maintenance specialists both within the directorate of reliability and in the service departments and other parts of the procurement executive to support that increased emphasis. The services defect reporting systems are being reviewed to see how they can be adapted to provide information for statistical analysis to support the plans for improvement. Greater attention will be paid to life cycle costs at all stages of projects and the new emphasis has been widely publicised within the services. The Ministry of Defence and the industry are being made aware of it by meetings, seminars and video presentations, all of which have attracted considerable interest.
The right hon. Member for Ashton-under-Lyne commented on the report on urban development corporations. The report was a little out of date when it was published because it was overtaken by other developments. Many of the suggestions for tighter control and monitoring have been implemented since the Comptroller and Auditor General's report was published. The new urban development corporations have been set up, taking into account his criticisms of earlier guidance, and a comprehensive guidebook has been issued to all UDCs together with a revised financial memorandum.
My hon. Friend the Member for Hertfordshire, South-West made several points about the road planning report. The Department of Transport has studied the PAC report carefully. It is not complacent about traffic forecasting methods and there is no evidence that the methods are fundamentally flawed. It has a system of checking forecasts against actual traffic, as the Committee recommended. Of the 41 road schemes cited, 60 per cent. had forecasts with an accuracy within plus or minus 20 per cent.—that is within the level of accuracy determined by the technique. Those checks show that there is no systematic bias. Forecasting errors at the extreme of minus 50 per cent. up to 105 per cent. were quoted. They were largely due to planned changes in land use not taking place. Traffic forecasting is inherently uncertain. The methods have been and will continue to be improved. The new national road traffic forecast provides a more up-to-date basis for appraising road schemes. I am pleased to note that my hon. Friend was encouraged by the Treasury response to the report and by the White Paper "Roads for Prosperity".
My hon. Friend mentioned his anxiety about the environment associated with the future widening of the M25. The consultants' report has been published and the standing advisory committee on trunk road assessment has been expanded and asked to examine the evaluation of environmental effects.
The hon. Member for Workington (Mr. Campbell-Savours) apologised to the House for leaving early and we are grateful for that apology. We welcome his speech. He is an hon. Member for whom I have great respect when he is not muck-raking. He commented on information in reports to Parliament, particularly about the secret services and GCHQ. The House has long accepted that it is not in the public interest to reveal details of the security and intelligence services, but the NAO has full access to expenditure on GCHQ. Given the nature of the expenditure on the secret vote, there are long-standing conventions that Parliament has accepted that there should not be detailed external examination of that expenditure, but obviously the PAC can examine it in private session.
927 My hon. Friend the Member for Scarborough raised an important point about the public sector borrowing requirement and its arcane definition. I can well understand that he may be puzzled by it. It has perplexed me in the past. It is a complicated matter, but there is logic behind the definition. As he said, if a subsidiary of the Commonwealth development corporation borrows abroad to lend abroad, it does not count against the PSBR for the good reason that it has no impact on the British economy. Borrowing by British Nuclear Fuels plc does not count against the PSBR because it is a Companies Act company borrowing on the ordinary markets. The Government's guarantee of that borrowing does not involve any expenditure unless the guarantee is called, in which case any Government payment would count as public expenditure.
§ Sir Michael Shaw
Government agencies or local government could often adopt the same policies as those of British Nuclear Fuels. The arguments are more or less the same. That would allow it to compete in the open market for genuine, commercial objectives that are necessary. I cannot help but feel that from time to time the Government use the PSBR definition to stop developments. Certainly the variations due to Government changes in policy on PSBR make continuous planning in some areas uncertain.
§ Mr. Lilley
I understand what my hon. Friend says. What is surely not in doubt is that the Government must exercise control over public sector borrowing. I can understand the difficulties of comprehension to which companies such as BNFL give rise. Plainly, the solution to all our problems of definition is to privatise as much as possible and have a much smaller public sector to which the definition will apply.
My hon. Friend the Member for Uxbridge (Mr. Shersby) spoke in telling terms of his concern about prisons and law and order and I recognise the importance of the matters that he raised. The Treasury minute responds to some of them, notably on prison building where the programme is on target to yield an additional 928 7,000 places at new establishments by March 1993 and a further 2,500 new places at existing establishments somewhat earlier, in March 1991. In addition, there is a new programme of integral sanitation which should provide 6,500 cells with access to it within the next seven years. Ways of expanding that programme are being considered. However, I will draw to the attention of my right hon. Friend the Home Secretary the matters that my hon. Friend has raised and I am sure that he will be influenced by them. If my hon. Friend permits, I shall write to him about some of the more detailed aspects that he drew to the attention of the House.
My hon. Friend the Member for Beaconsfield appealed for a change in the format of the Treasury minutes. The Treasury is happy to redraft the form of those minutes in order to meet the wishes of the Committee and I hope that the next minute, which will be presented to the House early in the new year, will be in a form that better meets my hon. Friend's wishes and those of the Committee as a whole.
On that happy note I shall end my contribution to the debate. I renew the debt of gratitude that the whole House owes to the members of the Committee and to hon. Members who have taken part in this interesting debate.
§ Question put and agreed to.
That this House takes note of the 37th to 40th and 42nd to 52nd Reports of the Committee of Public Accounts of Session 1987–88, of the 1st to 33rd Reports of Session 1988–89 and of the Treasury Minutes and Northern Ireland Department of Finance and Personnel Memorandum on those Reports (Cm. 533, 563, 624, 648, 697, 717, 747, 831 and 850), with particular reference to the following Reports:—
Forty-fourth, Quality of service to the public at DHSS local offices;
Forty-eighth, Sale of Royal Ordnance plc.
First, Management of the collections of the English national museums and galleries;
Twenty-sixth, Coronary heart disease;
Twenty-eighth, Backlog of maintenance of motorways and trunk roads;
Thirty-first, Reliability and maintainability of defence equipment.