HC Deb 21 February 1994 vol 238 cc14-5
28. Ms Lynne

To ask the Chairman of the Public Accounts Commission what consideration the Commission is giving to the extent to which the Comptroller and Auditor General can check on the use of public money once it has passed into private hands.

Sir Peter Hordern

The CAG's powers to check the use of public money are governed by statute. Where public money passes into private hands, the CAG's statutory powers are normally restricted to examining the activities and papers of the Department or agency issuing the funds. In some cases, the CAG also has rights to inspect the books and records of bodies receiving those funds, to ensure that the money has been spent as Parliament intended. Those inspection rights can be statutory as a condition of grant, or they can be built into contracts for services provided by the private sector. There can be advantages in doing so. The extension of the CAG's statutory powers is, of course, a matter for the House.

Ms. Lynne

I am grateful for that detailed reply. Does the Chairman agree that it would be better if the Comptroller and Auditor General could follow money through to its end use once it has left the Treasury, bearing in mind allegations about the Pergau dam? That would bring us into line with many other countries.

Sir Peter Hordern

There is a strong case for that. The PAC recommended it some years ago and I understand that the PAC and the Treasury and Civil Service Select Committee are now also considering it. It seems rather strange that the Audit Commission can appoint auditors who may follow every penny of public spending through local authorities and that the European Court of Auditors can do the same. I shall draw that point to the attention of my right hon. Friends and, when I have done so, I shall write to the hon. Lady.