HC Deb 14 December 2000 vol 359 cc824-65 1.37 pm
Mr. David Davis (Haltemprice and Howden)

I beg to move, That this House takes note of the 39th and 41st Reports of the Committee of Public Accounts of Session 1998–99, of the 1st to 9th and 11th to 37th Reports of Session 1999–2000, and of the Treasury Minutes on these Reports (Cm 4576, 4593, 4656, 4695, 4688, 4732, 4758, 4798, 4822, 4863, 4886 and 4901). Before I get to the substance of the business, and since this will probably be the last public accounts debate before the general election, I want to pay tribute to the man who has probably done more than anyone in living memory to advance the causes of the Public Accounts Committee and accountability to the House of Commons. The profile of the Committee and recognition of the importance of its work are well-established elements of our constitutional process, but the Committee's effectiveness and the respect in which it is held owe much to the robust but balanced approach adopted by my predecessor as Chairman, the right hon. Member for Ashton-under-Lyne (Mr. Sheldon). As the right hon. Gentleman has announced that he intends to retire at the election, this is my last opportunity to pay proper tribute to him.

I hold the right hon. Gentleman in great esteem, admiration and affection. He held the post of Chairman for a record 14 years, and given that it is always held by an Opposition Member, the House will understand that my party has no wish that I should challenge that record. He also played a pivotal role in the creation of the National Audit Office in its current form, which is the most important landmark in improving public accountability since Gladstone established the PAC in 1861. The right hon. Gentleman presided over the publication of 600 reports, every one of them unanimous. Those reports have made a significant contribution to better government and service to the taxpayer. Their implementation has saved the taxpayer many billions of pounds.

Above all, the right hon. Gentleman made the Committee what it is today. There have been numerous highlights. The Committee brought to the public's attention a number of significant cases in which public money had not been spent wisely. They include, most famously, the Pergau dam, Wessex regional health authority and the Welsh development agency.

In 1994, under the right hon. Gentleman's stewardship, the Committee produced its seminal 8th report, "The Proper Conduct of Public Business", which examined the standards of conduct in public life and set out the measures needed to uphold the integrity of public servants and to restore confidence in public service. It was a landmark exercise that I have been keen to emulate, drawing out in specific reports the generic lessons arising from the Committee's work on privatisations, the private finance initiative and information technology.

In recent years, the right hon. Gentleman has continued his interest in the work of the Committee and the National Audit Office as chairman of the Public Accounts Commission, which plays a key role in the accountability process, most notably by setting and protecting the NAO's budget.

The right hon. Gentleman has been an unfailing source of good advice to me. He is a man of unusual wisdom and he will be greatly missed. I know that he cannot be here today, but I nevertheless express thanks and gratitude—I hope, on behalf of the whole House—for all that he has done.

In the past year, the Committee has produced 43 reports on matters as diverse as the "Government on the Web" and "Compensating Victims of Violent Crime". Committee members are diligent and thorough. We have lost some valuable members in recent years, to whom I pay tribute. My hon. Friend the Member for South-West Hertfordshire (Mr. Page) made valuable contributions for 11 years. My hon. Friend the Member for Bexhill and Battle (Mr. Wardle) was a highly effective member for four years, and although the tenure of my right hon. Friend the Member for Skipton and Ripon (Mr. Curry) was brief, it was also distinguished.

In the past year, it has given me great pleasure to welcome to the Committee my hon. Friend the Member for Gainsborough (Mr. Leigh), the hon. Members for Eastwood (Mr. Murphy) and for Edinburgh, South (Mr. Griffiths), and my hon. Friends the Members for West Chelmsford (Mr. Burns) and for Westbury (Mr. Faber), who are recent additions.

In particular, I praise the hard work of and the seamless service provided by Mr. Ken Brown, the Committee Clerk, and his team. We all recognise the pressure that they are under and we are grateful for their help and advice.

The Committee is of course uniquely fortunate in enjoying the services of the National Audit Office under the able and experienced command of Sir John Bourn. The NAO serves Parliament well; indeed, its staff are the unsung heroes of the story that I am about to tell.

The Committee has made a real impact. Between them, the NAO and the PAC have generated substantial savings of some £1.3 billion in the past three years—a sum equivalent to an £8 saving for every £1 spent on running the NAO. In the past 12 months alone, we prompted the bodies that the NAO audits to make more than 2,100 significant changes to their systems. That that work is of practical benefit to the Government is evidenced by the fact that more than 90 per cent. of recommendations that the Committee made last year were accepted.

This has not, however, been a record year in terms of numbers of reports. Like all the Committee's failings, that is the fault of the Chairman. On that point, at least, there is always unanimity. In truth, the passage of the Government Resources and Accounts Bill took up much of the Committee's time, my time, and that of the right hon. Member for Swansea, West (Mr. Williams) and the hon. Member for Newbury (Mr. Rendel). That Bill presented an opportunity to bring up to date the Comptroller and Auditor General's powers of audit and access. To do so is a prerequisite if the NAO is to continue to provide Parliament with a quality service in a changing world with many new forms of public service delivery. The Committee's 4th and 9th reports on the Bill set out the arguments for such reform. Key issues remain unresolved, including the CAG's ability to audit companies set up by public bodies such as the New Millennium Experience Company—the dome company—the auditing of all non-departmental bodies and access to contractors.

In our experience, the existing audit arrangements for such bodies have sometimes shown them to be less than satisfactory and occasionally disastrous. The most obvious example is the quality of auditing in further education, about which the Committee is concerned.

The Bill, now the Government Resources and Accounts Act 2000, also gave the Government and the House the opportunity to look to the future and get a grip on new and independent ways in which to measure performance. Performance measures have a great potential to serve as a lever to improve the delivery of public services and to increase for the public the openness and transparency of the Government's efforts on their behalf. However, those measures need to be independently validated and reported to Parliament if the public is to have confidence in them, and if they are to lever up the standards of public service.

The Government did not grasp those opportunities in the context of the 2000 Act. However, it is fair to say that the Chief Secretary understood our concerns and has set up a review of audit and central Government accountability, which is led by Lord Sharman. I hope that that report will put right that problem.

Our remit is wide and covers many subjects, and I shall dwell on three important threads that run through them. First, there is the Committee's role in initiating improvement in Government; secondly, issues arising from our work on regulation this year; and finally, accountability—a high-profile issue at present.

In prompting improvement in Government, the Committee—perforce, for most of its time—focuses on criticising poor performance, but its purpose in so doing is to draw out the lessons that must be learned. That forward-looking approach is exemplified by our first report this year—on information technology—which drew out lessons learned from 25 previous reports spanning about 10 years.

Our report identified common themes; for example, the need to analyse fully the implications of the introduction of new IT systems for all aspects of the business, and the importance of full senior management involvement in championing the successful development of such systems. The Government responded positively to that report; indeed, I understand that it formed the basis of their White Paper. We hope that they will ensure that the lessons that we identified are implemented throughout Whitehall.

Inevitably, many of our reports highlight cases where matters have not gone well—where a body has failed to deliver value for money or has provided poor service to the public or, in some cases, where there has been a combination of the two. One example is the Committee's examination—in its 29th report this year—of the crisis in the Passport Agency in the summer of 1999. At the peak of the crisis, more than 500,000 people were awaiting passports. Many thousands were forced to queue at passport offices, and many more suffered inconvenience and distress because they were unable to find out about the progress of their application. More than 500 people missed their travel dates. That fiasco represented a deplorable departure from the high standards of service that the public have a right to expect.

The crisis was caused by the Passport Agency's over-optimism about the implementation of a new computerised system for processing passports. Although the agency had transferred the risk associated with design and delivery of the new computer system to its private sector partners, it retained responsibility for ensuring continuity and quality of service. As a result, the agency incurred additional costs of £12.6 million in an effort to maintain services. Only a fraction of that sum—less than £2.5 million—will be recouped from its supplier.

Another example of poor risk management in contingency planning was covered in our 7th report—on the immigration and nationality directorate's casework programme. In April 1996, the directorate let a contract for a privately financed business change initiative, which depended heavily on new information technology. The contract was part of an integrated strategy to achieve a better approach to immigration control. Delivery of the IT system to support the programme slipped, leading to severe disruption to the directorate's services and a large increase in the backlog of cases. By June 1999, a backlog of 219,000 cases awaited processing and decision at the directorate. The Committee concluded that to combine a complex IT project with a major reorganisation was always likely to be a risky venture, yet the Home Office contingency plan was seriously flawed.

The Committee was rightly critical of those cases, but used them to make constructive recommendations on the need for adequate contingency plans in key public services—including both the need to plan for substantial loss of capacity and how to handle rapid rises in public demand when user delays become known.

A further area where we have used examples of weakness to make positive recommendations is that of poor project management. In our 6th report—on the Arts Council of England's monitoring of capital projects—the Committee examined 15 major capital projects funded with lottery money by the Arts Council, totalling about £325 million. We noted that the overwhelming majority had not gone according to plan; 13 of the 15 were over budget and more than half were late. The Arts Council had already found it necessary to make supplementary grants of more than £20 million on those projects alone.

The Committee was concerned that the Arts Council did not have the necessary financial and project management expertise, and that there was a need to strengthen its business monitoring function. The Committee concluded that earlier action to strengthen the council's grant assessment and financial skills would have helped to reduce cost and time over-runs in most cases.

I am pleased that the Committee's recommendations have been accepted and acted on. The Department for Culture, Media and Sport tells us that project monitoring and risk management were central to the management of lottery awards and that it is confident that the Arts Council's new, three-stage assessment process minimises the risk of project cost and time over-runs. The Committee will expect that reform to produce better performance.

Perhaps I might conclude this look at where projects have gone wrong by mentioning our 34th report, which examined probably the most costly example of maladministration in the history of the country: the state earnings-related pension scheme and the failure to inform the public about reduced pension rights for widows and widowers. That case represents an abject failure in a Department's legal responsibility to provide accurate and complete information to the citizen.

For 10 years from 1986, the Department of Social Security did not publicise adequately a very significant change, which was introduced in 1986, but not due to come into force until 2000, to the arrangements for the inheritance of the state earnings-related pension. Nor did it ensure that staff provided the public with correct information on that change between 1986 and 1999. As a result, many thousands of people are likely to have made decisions about their future provision based on an incorrect understanding of the pensions that will be inherited by their spouses after their own deaths. There was a systematic failure of administration in the Department and the Benefits Agency, which illustrates the need for a fundamental improvement in their attitudes to customer service.

I welcome the Secretary of State's announcement of 28 November, which addressed a major concern, flagged by the Committee, regarding the redress package announced in March 2000. We were concerned that many of those affected would not hear about the redress scheme and might find it difficult to understand. We were also concerned that those who had already retired would not be able to make alternative arrangements. The cost of remedying that debacle is estimated at some £12 billion.

The fact that the debacle was remedied properly is to the credit of the Secretary of State for Social Security, but I am sure that he was greatly reinforced in his arguments with the Treasury by the fact that the two most heavily armed Select Committees—the Public Administration Committee, which has the weapon of the ombudsman, and the Public Accounts Committee, which has the weapon of the National Audit Office—were both determined that the pensioners should be treated properly. That is a good example of Select Committees changing the balance of power in Whitehall in favour of democracy and in favour of the good of the public.

On health, we have produced important reports about improving delivery. Our 42nd report, on hospital-acquired infection, highlighted that growing problem. The best estimates suggest that there are some 300,000 cases each year in England, causing more than 5,000 deaths. The cost to the national health service may be as much as £1 billion a year. Not all cases are preventable, but a lot are. A 15 per cent. reduction would save many lives, and could save the NHS about £150 million a year.

We encouraged the NHS executive to take a much firmer grip on the extent of that problem through a root and branch shift towards prevention. We also urged the collection of robust, up-to-date data to enable it to identify the scale of the problem. It is pleasing that the Government have taken forward so many of our recommendations. For example, they have launched a new strategy to address the growing problem of anti-microbial resistance. That includes the establishment and maintenance of surveillance systems, strengthening infection control practices and processes in hospital and the community and the promotion of a co-ordinated programme of research and development of new techniques to detect, prevent and treat infection. They have also announced further money—£31 million—to clean up NHS hospitals.

Lack of data is a common theme in our NHS reports. Effective information is essential for good management and effective health care and central to NHS modernisation. The Committee has taken evidence from the NHS on the ways in which it might improve in-patient admission and bed management procedures. The potential gains to the NHS are enormous. In 1998–99, a record number of people in England—about 5.8 million—were admitted to hospital for at least a night. There is already much good practice in the NHS, but many problems remain. In 1998–99, the operations of 56,000 patients were cancelled at the last minute for non-medical reasons. More than 2 million bed days are lost each year due to delays in discharging people who are fit to leave hospital. That is due to poor management and poor collaboration between NHS agencies, social services departments and other agencies. That costs the NHS £1 million a day, wasting scarce resources that the NHS can ill afford.

The Committee has also taken evidence on hip replacements. The National Audit Office found that, in England, the NHS performs more than 30,000 replacements a year at a cost of £140 million. Most patients receiving hip replacements receive an excellent service from the NHS and enjoy an enhanced quality of life after their operation. However, the Comptroller and Auditor General reported that there were significant variations in performance. For example, there are variations in practice between trusts and orthopaedic consultants on a range of issues, such as the purchase of hip prostheses, supervision of surgery, length of patient stay in hospital and follow-up after operations. The Committee believes that the NHS executive should address any inequalities in access to care wherever they arise and should resolve the uncertainties about the clinical effectiveness of the different prostheses used.

A key theme running through the Comptroller and Auditor General's report, which the NHS executive acknowledged in its evidence to the Committee, was again a lack of management information available to NHS trusts and individual consultants. We shall never have cost-effective health care until we solve that problem. Better use of taxpayers' money means more and better health care. That underlines the importance of the steps that the executive is undertaking to improve information and of the successful delivery of the new NHS management and information technology strategy on which the Committee commented in its 13th report.

In July, the Committee produced a ground-breaking 27th report on joined-up working in the criminal justice system. Every year, the criminal courts in England and Wales deal with almost 2 million defendants. The criminal justice process is complex involving several separate organisations, including the police, the Crown Prosecution Service and the courts. Defendants are usually represented by lawyers who are publicly funded from legal aid. Cases may require work by probation officers, the forensic science service, independent experts, professional witnesses, the Prison Service and the prison escort and custody service.

There has been much impetus in recent years for public services to work better together and the criminal justice system is a key area where such a joined-up approach is essential. We recognise that the independence of the various players is fundamental to justice, but that independence is entirely compatible with the various agencies taking joint responsibility for achieving value for money from the substantial public sums that they spend. In short, it is hard to think of an area where it is more important to adopt effective joint working. The old adage, "Justice delayed is justice denied" obviously applies in this case.

However, the Committee found that the criminal justice system is some way from having the information base needed to enable people to work together and to plan and manage the process effectively. That causes endemic delays in the system, which increase costs and undermine public confidence. I am pleased to note that the pilot programmes to expedite criminal cases show that real benefits can be achieved. The wider application of those programmes should be an urgent priority for everyone working in the criminal justice system.

The Committee, as a matter of course, also draws attention to good practice. For example, our 40th report examined National Savings' public-private partnership with Siemens Business Services. In that deal, Siemens—a company that does not always necessarily receive the PAC's plaudits—took over the day-to-day administration of National Savings' products, and that included responsibility for more than 4,000 staff. The remaining 130 staff of National Savings retained responsibility for overall business performance, including the design, management and marketing of products to customers, liaison with Treasury on funding requirements and managing the relationship with Siemens. It is still early days, but we congratulated National Savings on managing the process so well and concluded that the deal offers very good value for the taxpayer.

The Committee's positive response to that innovative project refutes the concern raised in some quarters that accountability to Parliament through the PAC acts as a disincentive to risk taking and innovation. Let me dispel that notion here and now. In my view, innovation is essential for radical improvement in the quality and value of public services. The freedom to innovate must be balanced against responsibility to those providing the funds. In the commercial world senior staff are accountable to their boards and, beyond that, to shareholders. In the public sector, Parliament and the Public Accounts Committee perform that role. The rewards for success are higher in the commercial world, but so are the personal consequences of failure.

My Committee is not against sensible and reasoned risk taking and innovation. We support such moves provided that the risks are managed well and hold out the prospect of a sizeable reward for the taxpayer. We do not criticise projects per se, but are certainly concerned about projects for which the risks were not properly evaluated or were badly managed, and thus led to an unnecessary waste of taxpayers' money. There is a world of difference between the Committee's criticism of public bodies' failure to get a grip, which unfortunately we see all too frequently, and its criticism of their failure to take well thought through risks, which they generally do not do. Too often, Whitehall seems unable to distinguish between risk management and roulette management—the careless gambling of the public's money on ill thought out, weakly managed projects.

Cultural inhibitions provide a much greater barrier to innovation in public service. The civil service culture has long been risk-averse, and the pace of progress made by the public service has been slow. To say that audit scrutiny is a barrier to innovation is a lame excuse, used by those who do not have the vision to see the potential of new approaches or the capacity to manage risk. No one who has appeared before my Committee was able to say that he took a well-judged risk, managed it tightly as possible, but unfortunately it did not pay off for reasons beyond his control. Should that happen, I would commend, not castigate, such action.

The second theme is regulation. Regulators play a key role in ensuring that the rights of the taxpayer are protected, whether through lower prices, greater choice or improved services. Regulators are the only proxies for pressures of competition in parts of vital industries such as power supply, railways and telecommunications. In competitive markets, regulators have a role in protecting the interests of consumers in society by investigating and acting against abusive practices. Sometimes, the regulator's failure to bring about improvements has been due to shortcomings in the original legislation. In such cases, the regulator should seek to strengthen his powers. In other cases, the legislation has provided the regulator with the appropriate firepower, but he has been slow to act or has not moved with the times.

Let me give four examples: the Office of the Rail Regulator, which is dealt with in our report on ensuring that Railtrack maintains and renews the rail network; the Office of Fair Trading, which is covered in our report on protecting the consumer from unfair trading practices; the Gaming Board, which is the subject of our report on better regulation; and the Office of Gas and Electricity Markets, which is addressed in our report on giving customers a choice after the introduction of competition into the domestic gas market.

In August, we published our 35th report on the Office of the Rail Regulator. It was sadly prescient given the fateful accident at Hatfield in the autumn, because we highlighted the sharp rise in broken rails on the network. In 1998, Railtrack forecast that there would be 450 or fewer broken rails in 1999–2000, but in 1998–99 and 1999–2000 it had more than twice that number—937 and 919. Frankly, that is not good enough. Railtrack made a commercial decision not to replace the track, which last year was in a worse condition than when the railways were privatised. The consequence of delays and inconvenience to the travelling public and for safety are now all too apparent.

Some of the problems can be put down to the inadequate powers made available to the regulator on privatisation in 1996, but at the time of our report the regulator had yet to put in place the right tools—notably, amendments to Railtrack's network licence. We called on the Rail Regulator to take action to ensure that the incidence of broken rails were substantially reduced. We recommended that he should set targets for achieving those improvements within the next two years and apply financial penalties against Railtrack if the targets were not met. I am glad to say that the Government accepted the recommendations but, sadly, the incident at Hatfield occurred before they were implemented.

The situation in that sector is a good example of the need to tailor the powers of the regulator to the circumstances of the industry involved. The risk of fatal injury is low on the railways and that will inevitably influence the actions of rail managers, possibly making them complacent. Accidents are infrequent. They seem to happen in groups about every 10 years, but when they occur, the number of casualties can be very high. The regulatory regime should be designed to shape the industry's behaviour to offset such problems.

Our examination of the Office of Fair Trading found that, although the OFT had been hampered by ineffective legislation, it could still do more within its existing powers to protect consumers from rogue traders. Few consumer credit licences are revoked, even though, in some cases, licensed traders have had serious criminal convictions. It is shocking that the OFT has only once applied to the courts for a contract to be revised under the Unfair Terms in Contracts Regulations 1994. The OFT has consistently failed to take opportunities to show traders that it will not tolerate customers being ripped off: it is a watchdog that rarely comes out of its kennel. A more proactive approach would send a powerful message to rogue traders and restore the public's confidence in the role of the regulator.

The Committee's examination of the introduction of competition into the domestic gas market disclosed that low-income customers who use pre-payment meters were relatively disadvantaged. Furthermore, we were astounded to find that, owing to unscrupulous sales techniques, 100,000 customers were switched to a different supplier without their consent. We were especially concerned about the impact of that on the elderly and other potentially vulnerable groups. As in the railway industry, there was a safety concern—in this case, falling standards in tackling uncontrolled gas escapes. Therefore, while welcoming the benefits resulting from gas competition, we urged the regulator to act to remedy the problems that accompanied it.

Sometimes, regulators have been slow to move with the times and, because of wider socio-economic changes, regimes that were once appropriate become no longer relevant. Our 41st report, "The Gaming Board: Better Regulation", is a case in point. It looked at a body that regulates a substantial industry taking in about £11 billion in stake money—a mainstream industry that is largely free of criminal activity and is becoming increasingly sophisticated with the advent of internet banking and internet gaming.

There is a marked difference between now and the era when the Gaming Board was set up in the late 1960s. One of the board's main aims was to purge gaming of criminal activity and ensure that it was fairly and properly conducted. Then, the board monitored the industry through regular visits by inspectors, many of them retired former policemen. Now, however, there is a high level of compliance in the sector: for example, ownership of many casinos is concentrated in a few limited companies with their own audit, security and compliance departments. Yet, until recently, the board's approach and the frequency of inspections had remained largely unchanged.

The Committee concluded that the board's approach was unfocused and wasteful. We recommended that it should rationalise its regulatory procedures to take greater account of industry developments, such as companies' own compliance procedures, and to assess better the success of its activities through appropriate performance measures. The Committee also considered it important that the board should have the appropriate staff mix to reflect today's environment: more staff with backgrounds in information technology and accountancy and perhaps fewer retired policemen.

We have been able to make important recommendations in the regulatory sector because, in most of the sector, the Comptroller and Auditor General has full access and audit rights. One area of regulation that represents a yawning gap in those rights is that of public housing. The CAG does not audit the Housing Corporation and has no right of access to registered social landlords, formerly housing associations, despite the fact that they will receive more than £800 million this year, rising to £1.2 billion in 2003. The need for effective scrutiny of the sector was clearly demonstrated recently when my Committee discussed the case of fraud at Focus housing association, which was regulated by the Housing Corporation. It took six months of negotiation before the National Audit Office was allowed access to Focus. Such a position is entirely indefensible when such substantial sums of public money are at stake.

In summary, the regulatory regime exists to protect consumers and society from unscrupulous practices. Regulators can be entrusted by Parliament with acting in the interests of consumers, and they need to respond quickly and forcefully when problems arise or circumstances change. The Committee has been keen to ensure that they do so, as the ultimate defender of consumer interests.

My third and final theme, accountability, is central to the history of the Committee and its effectiveness. It is at the core of the relationship between Parliament and the Executive. There are long-established and robust traditions that serve to balance the ability of Government to govern against the ability of Parliament to protect the interests of the taxpayer.

A key feature of the Committee's success is the notion of personal accountability to Parliament of the senior official within a Department or agency. It is not by accident that most senior officials in a Department or other body also have the title "accounting officer". Indeed, until 1981, accounting officers were personally liable for expenditure improperly charged to accounts. If that were true now, I suspect that one or two of them might have £100 million mortgages.

The current arrangements involve periodic appearances by senior officials before the Committee. Normally, we call the incumbent accounting officer, who accepts responsibilities for the actions of his or her predecessors. In most instances, this works well. Sometimes, however, it may be appropriate for past accounting officers—those who were in post when key decisions were taken—to be brought back before the Committee. For example, when the Committee examined witnesses about the problems of the Passport Agency in the summer of 1999, the evidence of the former chief executive was of particular importance to us as we sought to understand events leading up to and during the crisis. For that reason, we shall continue to call witnesses whom we consider to be most appropriate in the circumstances of each case. It is a power that we shall use responsibly, but it is one that should not be open to question.

A particular feature of the special relationship between accounting officers and Parliament is the need for officers to defend their actions to the Committee. There are a few occasions each year when accounting officers consider that they have been asked to take action that they could not defend to the Committee, on grounds of either propriety or value for money. Clear procedures exist for the accounting officer to request a written direction from his or her Minister to take such action. These directions are automatically notified to the Comptroller and Auditor General, who considers the issues and advises the Committee as he thinks fit. Automatic notification where directions were sought on the ground of value for money was a further innovation of my predecessor, as Chairman of the Committee. It was introduced following the then Committee's examination of the Pergau dam case in 1994.

Our recent investigation into the millennium dome is a classic example of the importance of accounting officers using the automatic notification process. Twice, the accounting officer of the Millennium Commission sought and received directions from the chairman of the commission to make additional grants to the New Millennium Experience Company. The process ensured that the procedure was brought to the attention of Parliament, and the CAG launched an investigation. Knowledge of the directions assisted our understanding of the matter when we took evidence on the CAG's report. We have not yet concluded our deliberations on the issue.

Openness between Parliament and the Executive is a further essential—

Mr. David Rendel (Newbury)

As the right hon. Gentleman is talking about letters of direction, has he considered what should happen when the CAG has reported to him about letters of direction that have been notified to him, the CAG? Given the Public Accounts Committee's role in holding the Government to account to Parliament, would it not be appropriate for all such letters immediately to be placed in the Library so that they are available to all Members?

Mr. Davis

I have a great deal of sympathy with that point of view. The hon. Gentleman will remember that when the first letter of direction was brought to the Committee's attention, I asked the Committee to authorise exactly that procedure, but I am not entirely certain that it would be appropriate in every circumstance. Perhaps the right approach would be to make that procedure the norm but not to make it always the case because occasionally there may be occurrences when a degree of Government confidentiality should be respected. In most circumstances, it would be a good innovation in itself.

I shall continue on that note. Openness between Parliament and the Executive is a further essential ingredient of effective accountability. I have been especially disappointed at the deplorable failure to keep Parliament informed of the financial position at the millennium dome. In that instance, the accounting officer of the Department for Culture, Media and Sport provided the board members of NMEC, a quango established as a company with full obligations under company law, with an indemnity, the value of which could have run into hundreds of millions of pounds.

The accounting officer was advised by the Treasury that there was no need to draw the indemnity specifically to the attention of Parliament as it deemed it to be covered by a general indemnity for all board members of all quangos that had been notified to Parliament in 1998. As a consequence of that advice, the Executive committed potentially hundreds of millions of pounds of taxpayers' money, for such costs could not have been met from lottery money without any specific authority from Parliament to do that. That is wrong, and following representations from the Committee, the guidance on when Parliament should be notified of such commitments will be revised. However, it does illustrate the scant regard for the interests of Parliament that is found in some parts of Whitehall.

A further vital tenet of accountability is the conventions that govern the way in which Ministers should respond to the reports of the National Audit Office and Select Committees. Long-established conventions require the Government to consider carefully Committee reports and to provide a formal response to the House when they have had an opportunity to study the conclusions in detail. Immediate comment should be confined to clarification or explanation of the reports, not to snap responses.

The current conventions were reaffirmed in 1990 in the correspondence between the then Lord President of the Council—Geoffrey, now Lord, Howe—and the then Chairman of the Liaison Committee, Terence Higgins. The basic principle of the guidance given was the need for Departments to avoid pre-empting or prejudging the Government's final and considered reply to recommendations from Select Committees and the Public Accounts Committee, which must first be given to the House. However, in recent weeks we have seen Ministers rush to judgment, either misrepresenting the Committee's findings or taking issue with agreed facts. Recently, our estimate of deaths from hospital-acquired infections has been disputed, despite the fact that the Department's accounting officer had already agreed the figure with the National Audit Office.

A similar incident occurred following publication of our recent 45th report on the acceptance into service of the Chinook mark 2 helicopter and the crash of one of those helicopters on the Mull of Kintyre, when Defence Ministers reacted hastily and negatively. That report formed part of our wider study of the MOD's acceptance of equipment off-contract and into service, which formed the 44th report, and both reports were issued simultaneously.

Mrs. Ray Michie (Argyll and Bute)

May I say how much my constituents and I welcomed the 45th report, as the Chinook crashed on the Mull of Kintyre? Does the right hon. Gentleman agree that the MOD could set aside the verdict of gross negligence on the part of the two pilots? The MOD need not admit that it was wrong, but new rules now cover boards of inquiry and it should lay the matter to rest and get rid of the very unfair and unjust verdict, which the report highlighted.

Mr. Davis

I hope that the hon. Lady will forgive me if I return to her question in about 30 seconds, when I have finished the thrust of my current argument.

The Committee deliberated long and hard on the Chinook incident and amassed a significant body of evidence, mostly from the MOD, to support the conclusions that we reached. We aimed not to establish the truth of what happened—which is unknowable—but to point to the severe weaknesses in the processes by which the MOD accepted those helicopters into service and the subsequent procedures by which they concluded that the fault for the crash lay with the pilots. The immediate public response from Ministers was a discourtesy to the Committee, prejudices the Government's considered response and, in my view, flies in the face of the agreed convention.

On the hon. Lady's specific point, we do not seek to lay blame anywhere. It is perfectly possible for the Government to set aside the verdict. Ministers then in the Department accepted that as the right route, and other experts—whether those involved in the fatal accident inquiry or in aeronautics generally—all think that the verdict is unsafe. None of us seeks to score points; we want a matter of honour to be put right and the system corrected for the future. So I agree with what the hon. Lady has said.

One Minister even suggested that the PAC was acting beyond its remit. I have three responses to that suggestion. First, it is for the House of Commons and the Committee to decide our remit, not for Ministers. Ministers are accountable to Parliament, not the other way round. Secondly, the investigation arose from a study of the badly managed introduction into service of the £140 million upgrade that created the mark 2 Chinook. After six years in development and three years in production, that helicopter was still having erratic engine-control software problems during flight testing. As a consequence, its operational capacity was restricted for more than four years after the Mull of Kintyre crash.

Similarly, the Committee concluded that the accident investigation procedure was flawed, and therefore could not guarantee to deliver the lessons necessary to enhance future safety and performance. Those matters clearly all come within the Committee's remit. Finally, in the midst of that assessment of performance, the Committee was faced with what we unanimously thought to be a serious risk of an injustice. In my view, not only is it the right of any parliamentary Committee to bring injustice to the public's attention; it is the duty of any parliamentarian to do so.

I am afraid that some of these trends suggest, in some quarters, a disregard for the rights and responsibilities in Parliament in regard to the process of accountability. The Government have no reason to fear that process, as is demonstrated by careful consideration of the Committee's work over the past 12 months. That and, I hope, what I have said over the last half hour show how valuable we are.

In many instances, we have provided a "tool kit" for improvement that will enable the Government to get better value for each pound that is spent. It is the accountability process that allows us to do that. The pillars of the process—control of the Chairman's rights to examine the report, and the Committee's right to take evidence from officials—are well cast. Most important of all is the concentration on the implementation of policy, rather than its merits. That allows us to rise above the party political fray, and to focus on the scope for improved delivery of public services.

People enter the House for many reasons. Some come to help the weak, some come to protect the vulnerable, and some come to empower the powerless. I doubt that many come to check the accounts. I hope, however, that what I have said today demonstrates that the PAC, a diligent, hard-working and talented Committee—I refer to its other members, not to myself—seeks to do both. I also hope that it does so to the benefit of the country, the taxpayer and, indeed, the Government.

2.21 pm
Mr. Alan Williams (Swansea, West)

First, let me apologise for the fact that I shall probably croak my way through my speech. The Whips seem to wait until I am seen walking around with a packet of tissues before arranging this annual debate.

I congratulate you, Mr. Deputy Speaker, on your good fortune in chairing the most eagerly awaited debate of the year—a debate of such weight and importance that the press literally cannot wait for it to happen.

Mr. Deputy Speaker (Sir Alan Haselhurst)

It is one of those pre-Christmas treats to which one looks forward.

Mr. Williams

It makes even Christmas pudding seem tolerable, does it not?

I thank the right hon. Member for Haltemprice and Howden (Mr. Davis) for his kind comments about his predecessor, my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon). My right hon. Friend entered the House on the same day as me in 1964, and has served it since with great eminence. He was one of the longest-serving Public Accounts Committee Chairmen. He has chaired the Public Accounts Commission and now chairs both the Standards and Privileges Committee and the Liaison Committee.

My right hon. Friend has asked me to apologise for his absence. I know he has already apologised to the right hon. Member for Haltemprice and Howden. He was unable to cancel existing engagements because—as inevitably often happens—we were told of the debate at very short notice.

I join the right hon. Member for Haltemprice and Howden in expressing gratitude to our Clerk, who is something of a parliamentary character himself. His advice is always blunt, clear and sound, and we are lucky to have him.

No one doubts that all the other Select Committees envy us the National Audit Office. That is not surprising, given their impoverishment in terms of support for their work in shadowing Departments; but as other Members have recognised over the years, it is not just a matter of envy. There is no way that a Public Accounts Committee, meeting a limited number of times a year and consisting of members who are effectively part-timers in terms of monitoring—after all, we must all do our constituency work and our other parliamentary work—could monitor expenditure properly, and provide the accountability that Parliament needs, without the NAO.

I also congratulate the Chairman of the Committee on his willingness to embrace change and experimentation, which does not always make one friends. The Committee needs to consider its position because, with an average 50 hearings a year, it is the bottleneck in the scrutiny process. I have put my views on that on the record in many previous debates, and I know that my colleagues pore over those comments regularly as bedtime reading.

In relation to the right hon. Gentleman's willingness to experiment, the Public Accounts Committee tries—we have done so once or twice before, but now do so more regularly—to overcome the continual frustration of holding hearings without the witnesses who were in office at the time that the events occurred. Early retirement seems to be as popular among some accounting officers as it is in the police force. On one occasion, we called back one chairman—who was by then an ex-chairman—for a hearing in May. I asked him when he had first heard the date for the Public Accounts Committee hearing, to which he replied, "Two weeks before Christmas." I then asked him when he had handed in his resignation, to which he replied, "One week before Christmas." That is the problem we have faced.

The right hon. Gentleman or my hon. Friend the Minister may be able to recollect—I cannot for the moment—the identity of one of the ex-accounting officers whom we called back for what appeared to be a very critical hearing. He was very helpful because of his personal perspective on explaining the events surrounding the particular decision-making process, and that changed our perception of what had happened. Although the NAO report was adverse and we had to be critical, our report was substantially less critical because the witness was so clear and helpful, and we congratulated him on his evidence to the Committee. Although it is a cause of discomfort to them, the recalling of accounting officers is essential if we are to establish what happened when things went wrong, if they went wrong. We do not blame when there is no blame. However, if there is blame, it must be discovered and attributed.

The right hon. Gentleman referred to maladministration in the state earnings-related pension scheme, which was a sad case dating back to 1986. In that respect, I congratulate Treasury and other departmental Ministers because although the failing was not of their making, they devoted a massive sum to try to redress the injustice that has been done or could have been done to many people.

Mr. Jim Cousins (Newcastle upon Tyne, Central)

I want to raise the issue of the recall of accounting officers, which struck me as important when it was mentioned by the right hon. Member for Haltemprice and Howden (Mr. Davis). My right hon. Friend will of course realise that the tradition of Select Committees is that one does not bypass the current officers and go to their predecessors, even to deal with a historic matter in a Department. It is, therefore, an interesting innovation. Will my right hon. Friend take that point on board and consider whether scrutiny in Select Committees and in Parliament more generally might go beyond the current officers and lead to the recalling of former departmental officers who are now retired to give an account of their behaviour? I am referring not just to people who have accounting officer responsibilities, but speaking more generally.

Mr. Williams

I am grateful to my hon. Friend for that intervention. In so far as it is a tradition, it is a silly one that is best disposed of. Those who most support it tend to be the permanent secretaries who sometimes encourage their Ministers to intervene. We have had Ministers write to us objecting to the fact that former accounting officers may be called before the Public Accounts Committee and we regard that as extreme impudence. We decide who the relevant witnesses are. I hope that all Select Committees will consider whether the current incumbent is the most appropriate witness to enable them to fulfil their obligations to the House. If Select Committees do not fulfil their obligations to the House, the House will be incapable of carrying out proper scrutiny of the Executive.

May I echo what the Chairman of the Committee said in relation to the Chinook crash? What impressed the Committee unanimously was the fact that pilot error has to be proved without any doubt whatever. We could see nothing in the evidence that was put before us to prove that the pilots were responsible. On the basis of the evidence that we had, they were blamed because no one was willing to admit that anything else could have caused the incident.

One of the flaws in the inquiry system within the armed services is that the final decision about the cause of something going wrong, such as the tragedy involving the Chinook, passes to someone who inevitably has a conflict of interest. It passes to the person who is responsible for keeping his military assets serviceable and available. Therefore there must be a strong temptation to give the benefit of the doubt to the equipment rather than the people manning it. We all felt that the case had not been proved against the officers concerned.

May I now concentrate on just one issue? Before anyone gets too optimistic, let me say that I can speak at great length on single issues when so driven, so I do not want to build up too many hopes, nor a premature appetite. I should like to discuss the private finance initiative. We have considered numerous reports dealing with PH projects over the past couple of years and I should like to review and put before the Minister in a way that I hope is constructively critical—where it is critical—some of the lessons that need to be learned, as the PFI will clearly be a major part of Government practice in future.

Let me make it quite clear that I have no personal opposition to the concept of applying a mortgage to national assets. Although there may be one or two exceptions, would most of own our houses today if we had not been able to buy them through a mortgage? How many of us would be in a house that we could say was ours if we had to wait until we had enough money to buy it outright? It is the same with cars, but I do not see any problem; most taxpayers and most of my constituents would prefer 20 hospitals to be up and running in the next two years than to have to wait for them to come one after another over 20 years, even if we have to pay a mortgage premium.

I do not, therefore, start from a position of opposition. Ministers seem unable to grasp the fact that I do not oppose the passing of risk. Indeed, as a member of the Public Accounts Committee, I can say that no one could be more in favour than I am of passing risk from the public to the private. Again, there is a personal, domestic parallel. Why do we all take out insurance on our houses? We pay a premium against a risk that could be too big if we were unfortunate enough to be struck by it, as has happened recently because of the floods.

I see nothing wrong with passing risk by paying a premium for it to be borne by someone else. That is highly desirable—indeed, it is doubly desirable in respect of high-tech projects that are at the frontier of technology. Over the years, the Public Accounts Committee has seen time and again that Departments get it wrong. Often, they point out why problems arose and provide understandable reasons, but the same risks and errors are nevertheless repeated. In areas of high technology especially, there is enormous benefit to the taxpayer in trying to pass the risk across and I have no objection to that. Where the objection lies is not a PAC issue, but one of political opposition both within and outside the House from people who are concerned about the privatisation of work forces and the effects on conditions of employment and so on.

I should like to consider several problems. As I said, I am in favour of passing risk, but it has become clear during the PAC hearings that we all too often pay the premium without the risk moving. The average PFI rate of return is 16 per cent. It can vary considerably, as I shall go on to explain, but it is usually between 15 and 17 per cent. and we have been told on several occasions that 16 per cent. is the average. One of the witnesses at a recent PAC hearing spoke about assessing the required rate of return and about making it 50 per cent. higher than would usually be expected on a normal contract. The evidence was given by an excellent witness from the private sector, with regard to the Fazakerley prison unit.

The Committee criticised what happened in the Passport Agency, not because we were opposed to the PFI but because the witnesses told us that the Department had incurred about £12.5 million of the cost. We then asked how much of that cost was borne by Siemens. The answer was £2.5 million. The passing of risk was not successful if the taxpayer picked up £4 out of £5 on all the damage costs that were created for the Department.

For those who doubt the PAC, let me point out that its value was further demonstrated by an answer to a subsequent question. I asked when Siemens agreed to pay the £2.5 million, and was told that it did so two weeks previously, shortly before its representatives attended the hearing. One had the feeling that the company paid the money in order to buy peace and quiet, rather than to settle any perceived legal obligation.

There are reasons for that, which I should like to draw to the Financial Secretary's attention. He is probably aware of them, but I should like to get them off my chest. The first reason is sloppy contracts. In some cases, we have found contracts in which only proveable damage imposes any cost on the contractor. In the case of the Passport Agency, most of the cost lies in inconvenience to the public and is not reclaimable. It is essential that it should be, if risk is to be passed.

Siemens is interesting in this respect. It carried out the computer installation for the immigration service, in which a backlog of 165,000 cases built up. The company also installed the Passport Agency computer systems, which led me to chide it because the British could not get out and the foreigners could not get in.

The third Siemens case that came before the Committee, to which the right hon. Member for Haltemprice and Howden referred, was that of National Savings. The contract had 56 performance targets built in, which ensured that, regardless of proveable damage or damage to the Department concerned, failure to meet performance targets that mattered to the public as well as the Department would trigger penalties. That is a lesson that Departments are learning. One understands that there is a learning process involved with innovative contracts, but it is important that the Government ensure that officials are held responsible for allowing any sloppy contracts to be drawn up.

Another reason for not taking action was a fear of legal costs. Some companies might say that they are going to dispute a matter and take it to court. Those companies might have deep purses. Some of the Departments might also have deep purses, but their money is already allocated for use during the year and they could be frightened off by the prospect of the legal costs.

A further reason was a fear that taking legal action could sour the atmosphere for further PFI contracts. Firms in the process of negotiating with the Government over a whole range of potential PFI contracts could be frightened off if they saw one of their predecessors taken to court. I hope that some of this information will show that, properly approached, the PFI is so akin to Christmas for companies that they should be queueing up to take part in it.

We have identified the problem of risk not transferring, and given some reasons why it does not do so—either contractually or in practice because of a lack of follow-up legal action. A further problem is abnormally high rates of return. If all companies work on the basis we have discussed, an average of 50 per cent. above the normal rate of contract is a very high rate of premium to pay, especially when one considers that PFI contracts worth £17.3 billion are already in place. That was the figure at the time of our hearing—it is higher now.

A newer phenomenon is the missed opportunity that arises from the fact that refinancing of contracts is possible. One of the reports concerns the company that undertook the Dartford and Gravesham hospitals PFI and the Fazakerley prison PFI. It intended the return to be 16 to 17 per cent. It was going for about the average, having originally aimed slightly lower. Then, after a relatively short time, it refinanced. Much of its finance was debt—I am not saying that in any critical sense; that is how business works. As a result of refinancing that debt, it turned the 16 to 17 per cent. rate of return into a 39 per cent. rate of return. I asked the witness, "Are you saying that this means you will get a 100 per cent. pay off in two and a half years?" He said yes, and reiterated in subsequent evidence that he agreed with my proposition.

The 39 per cent. rate of return and a two and a half year payback—on a 25-year contract, incidentally—does not include the profit that had been made on the project's construction fees, nor the profit that the company's partner, Group 4, makes in supplying services to the prison. So there was a 39 per cent. rate of return on a £247 million project, with no clawback facility.

The Department eventually got £1 million—that is all. The company threw the odd million in the Department's direction because—eyes glistening—it was already using its mobilised capital, as was said in evidence by a subsequent witness. The money released after the two and a half years was being used to earn profit again, because it was used to go after more PFI projects.

That is why I say that the PFI offer to tender is like Christmas for companies. They should get in while they can, because people are making an enormous amount of money. I do not mind people making money, but I object to taxpayers not getting their fair share of any unforeseen windfall profits.

I have great respect for the young man who gave evidence—he clearly knew his field very well. However, given that most of the PFI contracts could be subject to refunding and there is almost £17 billion worth of them, we can see how much extra windfall profit companies stand to make if clawback is not built into the contract.

In fairness, knowing that the Department was coming before us, the accounting officer said that he would issue to his officials advice that wherever possible they had to build in a 50:50 clawback agreement on refinancing. We are delighted about that. If people make mistakes and then learn from them, at least taxpayers get some benefit out of it because the first mistake alerts people to opportunities. However, the civil servants in the Department said that they could not anticipate that happening. With respect, that argument is difficult to sustain when we bear in mind that, surprisingly, a much earlier contract related to the channel tunnel had clawback arrangements.

It was not a question of such arrangements not being known within Government. Indeed, it was particularly worrying that the Department's advisers, Lazards, said that it was none of the Department's business. It said that it was not up to the Department, but to the company and the contractor. After all, that is the reward for risk. There is already a 50 per cent. premium for taking the risk, so we do not have to give out windfall profits on top of the insurance premiums that we are paying. I have a strong suspicion that Lazards' response was such because it realised that if the response had been anything else, Lazards would have been in the firing line for not having spotted the potential when advising the Department. I am angry about the way in which it failed in its obligations to its customer to provide the best quality of advice.

As I said, what is worrying about the PFI, in terms of finance and recycling, is the fact that there are more than £17 billion—the figure will soon be up to £20 billion—worth of PH contracts. Therefore, scope for a massive recycling windfall must exist. I took an unusual step, but it was in search of information: I thought I would try to alert Ministers by tabling to every Department a question about clawback in relation to PFI contracts. I had answers relating to 105 contracts.

I provided all the information to the National Audit Office, which kindly assessed my replies from Ministers. It said that, with the exception of the channel tunnel, which was an early one-off, by value only 29 per cent. of existing PFI contracts were covered by a clawback arrangement. Credit for that goes to two of our most frequent customers and visitors, the national health service executive and the Ministry of Defence. Both of them have learned a lesson and are building it into more of their contracts.

Unfortunately, some Departments have not been so aware of the situation. Last year, the Department of the Environment, Transport and the Regions—strangely, as it contains the Department that was involved in the channel tunnel—entered into three projects that had no clawback facility, including London Underground Connect. The NAO drew up for me a table of large projects of more than £50 million in capital value without clawback refinancing gains. It showed that there were six road contracts worth £1,078 million, four London Underground projects worth £1,009 million, seven PFI hospitals worth £690 million, five defence projects worth £568 million, and information technology partnership contracts—the responsibility of the Department for Education and Employment—worth £116 million. None had clawback facilities. The A5 in Wales, a much needed arterial road, was worth £110 million, and the Berlin embassy—the responsibility of the Foreign Office—was worth £50 million, but there was no clawback facility for either.

I have enormous regard for the Minister, who does a tremendous job; I do not say that to many Ministers or officials. I hope that he will take on board anything new or of positive value that I have said. There probably was nothing new, because his officials probably report diligently to him on what they hear in the Public Accounts Committee, when we are not berating them—a little side-sport when hearing evidence from witnesses seems singularly dull.

May I be slightly wicked, and observe what seems to be a paradox in prudence? It seems interesting that we concentrate on paying off national debt—I am all for that—to save about 8 per cent. interest a year, and at the same time encourage the spending Departments to enter into PFI debt with rates of return of 16 per cent. a year. That seems slightly inconsistent. I feel that I could make a profit if I were in that situation, by adjusting those figures. The Government would make £22 billion from selling air traffic control—I know what I would have done with the money, which I am afraid is why the Government did not receive my support on that.

Having been an Industry Minister and in economic Departments in the 1960s and 1970s, I understand the advantages to Government and the attraction for Ministers of reducing the public sector borrowing requirement and getting public expenditure off the balance sheet. As someone who is pro-European—although I am not queueing to exchange my money for the euro—I am forced to observe that getting public expenditure off the balance sheet would seem to help us meet the criteria to enter the euro. I am sure that has never crossed anyone's mind in the Government at all.

I do not want to rehearse all the points that I made last year, so I shall be brief in talking about parliamentary accountability, a matter lightly touched on by the Public Accounts Committee Chairman. As the Minister knows from our exchanges last year and from the discussions in the Sharman committee, which was set up as a result of them, the PFI is a source of great anger to the Committee and frustration to the National Audit Office. The National Audit Office has been kept out of the monitoring process.

I have concentrated on the PFI today, perhaps over-dramatically, to highlight some of the shortcomings. I hope that I can persuade the Minister that the NAO, like our Chairman and me, has no problem with passing a risk to the private sector, and that the investigations that it has carried out already—limited as they have had to be, owing to limits imposed on it—have enabled us to pinpoint the factors to which I have alluded today. If it had not been for the NAO, I suspect that most Departments would still not be aware of the problems and opportunities that refinancing makes available.

On the occasion of the valedictory visit of the accounting officer for the Ministry of Agriculture, Fisheries and Food, we had a fascinating exchange. The Ministry has been one of the worst Departments in terms of deliberately precluding the National Audit Office from almost every petty little quango that it has ever set up. There have been all manner of fallacious and often unexplained arguments. As the accounting officer was retiring and after he had finished his questioning in relation to the hearing of the day—he had no further need to get on the right side of the Public Accounts Committee—I told him that I knew that the most senior of permanent secretaries and many of his colleagues were dubious about the PAC, and that I had even heard that past Ministers were aware that the Committee was regarded with less than favour in some circles in the Executive. I am not saying which Departments are involved or trying to play politics.

When I put it to the accounting officer that the PAC had been criticised for being an obstacle—both the right hon. Member for Haltemprice and Howden and the hon. Member for Hertsmere (Mr. Clappison) were present, I think—he said that, on the contrary, the discipline that the PAC and NAO imposed was invaluable. In that case, I asked, why did his Department exclude so many of its silly little quangos from PAC scrutiny. He said that he would have no objection to every quango being subject to PAC inquiry. We have gone 99 per cent. of the way, and all we need is for my hon. Friend the Minister to say that he too sees no reason why every little quango should not be subject to scrutiny by the Public Accounts Committee.

3.1 pm

Mr. David Rendel (Newbury)

I rise aware that no one else seems to be seeking to catch your eye, Mr. Deputy Speaker. Perhaps others will, but no one else has risen so far. Given that the two Front-Bench spokesmen will require about half an hour between them, I seem to have until around 6.30 pm to finish my speech. I shall do my best to come to a conclusion a little before then, just in case one or two other Members wish to join the debate.

I am pleased to be able to speak and honoured to follow the right hon. Members for Haltemprice and Howden (Mr. Davis) and for Swansea, West (Mr. Williams). I have worked a great deal with both of them this year on the Government Resources and Accounts Bill and during the Sharman inquiry. I have enjoyed and been interested in my work with them, and one of the great strengths of the Public Accounts Committee is the way that we work across parties to produce unanimous reports. That process has shown its worth over many years, back into the century before last. It continues to do so today.

I was slightly concerned when the right hon. Member for Swansea, West described me near the start of his speech as his hon. Friend. The conventions of the House give that a special meaning, and as the Conservatives are my only serious opponents in my constituency, being called an hon. Friend by a member of the Labour party is a little worrying. I hope that it does not get back to my local press.

Mr. John Bercow (Buckingham)

It will.

Mr. Rendel

It might lose me quite a few votes.

I was amused to hear the right hon. Member for Haltemprice and Howden say that he hoped that he would not chair the PAC for quite as long—14 years—as his predecessor did. I, too, hope so, but for a slightly different reason. The Chairman is by long tradition a member of the official Opposition, and I hope that the Conservatives will be the third party long before 14 years are up.

It has been an honour to serve for the past year on the PAC. I joined it comparatively recently, although several of its members joined more recently still. Some of the reports being noted by the House today are on hearings that took place before I joined last November. Like the right hon. Members for Haltemprice and Howden and for Swansea, West, I am grateful to the Clerk for all his help. I have probably been on the phone to him and his staff more than any other member of the Committee this year. I have also been on the phone a lot to the Comptroller and Auditor General and his staff, to whom I am also grateful for their help with particular points and with requests to investigate matters that I felt required it.

Membership of the PAC has provided a fascinating insight into Government operations in general. I wish briefly to mention three of the reports before us. First, the report on the Highways Agency and how it deals with surplus property was of particular interest because of the property purchased when the Newbury bypass was being built. Clearly, the agency had, in a number of cases, been unable to run, maintain or look after the property well. A certain amount of money had been lost as a result.

One important lesson lay in the reason for some of those losses. It is difficult for the agency to deal with property without knowing how long it will be in the agency's hands. We have seen a whole series of changes to the transport programme over the past few years. First it went up, then it was cut back, then it went up again and then it was cut again. Those changes in the programme, under which money is taken out and put back in, make the Highways Agency's job difficult, particularly when it comes to knowing how long it should hold on to property, and for what purpose, when it has bought it because a scheme has been proposed.

Secondly, the report on vehicle emission testing considers how effective testing is. Since the report's publication, there has been horrendous change to our weather and huge floods, which have brought home to people the dangers of global warming and extra rainfall. The importance of vehicle emissions testing has become clearer even than it was previously. A large part of the noxious fumes and carbon dioxide produced from the various vehicles on our roads comes from cars that run inefficiently and produce more emissions than they should, often because of poor maintenance. Improving our vehicle emissions testing and driving off the roads vehicles that produce huge emissions would benefit the environment, help to reduce the global warming that rightly worries us all, and benefit the whole country and the world.

Thirdly, the report on irregularities in the handling of visa fees in Calcutta displays a clear failure to interview the culprits appropriately, from which the Foreign and Commonwealth Office must learn lessons. In addition, the whole system of applying for and obtaining visas is coming more frequently to the attention of Members because there are such inefficiencies in the system and such a great backlog. We constantly hear of cases of people who have been kept out of this country wrongly, often because the system itself leads to the loss of important and valuable paperwork.

One of my constituents is going back abroad without the relevant documents for returning to this country because her paperwork has been lost by the office concerned. I am happy to say that I have been able to get for her a full confession of guilt by that office, and that should enable my constituent to return to the United Kingdom. The office has written a long letter indicating that it is entirely its fault that the papers have been lost and that no one should try to stop her. Nevertheless, that sort of problem happens often, and the whole visa system—in our consulates and embassies abroad and here at home—needs a great deal of improvement.

I shall discuss three reports at slightly greater length. The first is the 35th report, on the Office of the Rail Regulator, which was mentioned by the Chairman of the PAC. It was published on 23 August—before the recent east coast main line accident at Hatfield and all the problems that that has caused. The National Audit Office report pointed out that, believe it or not, Railtrack was getting generous bonuses for reducing delays. How ironic that now seems, given what has happened in the past few weeks.

Many rail passengers, including, no doubt, many hon. Members, have suffered intolerable delays. Many of my hon. Friends who represent constituencies in the south-west have found it almost impossible to travel to Westminster. One had to drive the entire way from the far south-west to fulfil his duties in the House. He could not travel by aeroplane because the winds were too strong; he could not travel by rail because the line was down and few trains were running. It took him six and a half hours to drive here and the same again to drive back. That is nonsensical, and it is clear that we must sort out the present problems on the railways as quickly as we can.

Our report, and the NAO report on which it and our hearing were based, pointed to a failure of the entire privatisation process and, as the Chairman noted, a failure of regulation of the railways. During that hearing, we had an interesting discussion on what constitutes a delay in the railway system. The answer may seem obvious to most people, but it is in fact far from obvious.

We discussed whether a passenger who has to get off a train half way through his journey and complete it by bus is in fact delayed. Apparently, if it is known well in advance that it will be necessary to do that, one has not necessarily been delayed, even though the bus must gently travel by road to each station in turn, thereby deviating from the normal direct route and taking much longer. In such circumstances, most passengers would believe that they had been delayed, but as long as advance information is given, such a journey does not count as a delay.

Even where one does not have to get on a bus, as long as advance notice has been published of engineering works on the line—of course, such information may not get through to the passengers concerned—any consequent delay does not count as such.

Mr. Bercow

The hon. Gentleman is not making a narrow point about distinctions between privatisation and nationalisation, so he will accept that, although issues of delay are important, so are those relating to the stated frequency of service. When speaking to the Gracious Speech yesterday evening, his near neighbour, my right hon. Friend the Member for Wokingham (Mr. Redwood), pointed out that—post-privatisation—there used to be a service at 10-minute intervals between Reading and London, but that that promised service no longer exists. I wonder whether the hon. Gentleman is aware of that point, which certainly requires attention, quite apart from the debate on privatisation.

Mr. Rendel

I am grateful to the hon. Gentleman for that intervention, although I was unable to hear his right hon. Friend's comment. I also use that very line and I am aware that the service from Reading to London—indeed, all the way from Newbury to London—has deteriorated in the past few years. Of course, that is partly due to the work to create the new Heathrow link. Nevertheless, I am delighted that the hon. Gentleman supports an improvement in that rail service. I hope that his comments are duly noted by Thames Trains and First Great Western, because we would love a better service on that line.

The third reason why an apparent delay to a passenger may not in practice count as such is changes to the timetable. That is ironic indeed, in view of recent necessary changes. I have in my hand a special timetable that has been produced for week days in the period 11 to 15 December. In other words, a new timetable has been introduced that covers five days alone. As soon as such a timetable has been agreed with the Rail Regulator and introduced, the trains therein no longer count as delayed provided that they run to that new timetable.

Of course, that new temporary timetable—I hope that it will be temporary—shows all the trains taking much longer than they did a few weeks ago. Again, simply by changing the timetable and ensuring that it is agreed, the train operator—or Railtrack—can overcome the difficulty of being charged with delaying passengers.

The condition of the track is also a big problem. That was highlighted during our discussions at the hearing. At that time, 3 per cent. of the track was considered poor. That is also somewhat ironic given what people are now saying about the need to run trains slowly over many miles of track and to repair and replace several hundred miles of it—and to do so virtually immediately, before trains can be allowed to run rapidly over it again.

However, it was not merely the 3 per cent. of track that was known to be poor that was causing the problems. We were also told at the hearing that there were many breaks in the rest of the track. That shows that the regulator has failed to ensure adequate investment since privatisation and that the Government failed to ensure adequate investment before that time. To be fair, the regulator made it clear to us that his powers were extremely limited in that regard. The powers of the regulator, rather than the regulator himself, may well be at fault.

Another problem was highlighted in the report: that of train operating companies that use inadequately designed or maintained rolling stock that is liable to damage the track. Clearly, that is a failure of privatisation. During the hearing, the Rail Regulator said: The access contracts which were put in place between Railtrack and the train operating companies at the time of privatisation in 1994–95 were contracts of a very poor quality indeed. They gave very poor quality specification as to the quality of the work that Railtrack needed to do and indeed the quality of work that the train operating companies had to do in order to prevent the trains causing unnecessary damage to the network. Clearly, there were great difficulties with the privatisation process and they were brought out at the hearing that we held. I hope that the Government will do what they can to put those problems right. As we have seen, the underinvestment is causing real problems for rail travellers.

The second report on which I shall spend time is the 34th, on the state earnings-related pension scheme, SERPS. It is right to concentrate on that report because it is perhaps the most important that the PAC has produced. I will never forget the moment when the Chairman said to me in the Corridor, "I hope you realise that you've just cost the Government £8.5 billion." That does not happen to many Members. He was not being entirely fair to other people in saying that I alone caused the Government to spend an extra £8.5 billion, but I am proud to have played a part in ensuring, first, that the fiasco came to light, and secondly, that something was done about it by asking the NAO to look into and report on the matter, which it duly did. By the time that it reported, I was happy to be a member of the PAC and to be able to take part in the hearing on the report.

Of course, that report examined the Government's original scheme, which was more generous than we had expected—given remarks made at the time by social security spokesmen who have since moved on. The report found that the scheme appeared to be comparatively generous, but that it had certain severe problems, including how people affected by the SERPS fiasco were to be told about the new scheme.

How was that to be done? I and others had suggested that all those concerned should be written to; that seemed only logical, given the fact that the Government had insisted on that course for all those affected by the private pensions fiasco. When we put that suggestion to Ministers and others, they said that it was not possible because they did not have up-to-date addresses for many of the people in question. The matter was raised in the Committee and our report suggested that something should be done; it is not tolerable either that the Government should have large liabilities towards a large number of people of whose whereabouts they are unaware, or that they should rely on those people to get in touch with the Government when they are eligible to claim their pension.

I am delighted that, after the PAC report and the comments of the ombudsman—who was obviously also involved—the Government changed their first response to our complaints on that matter. The PAC and the ombudsman made it clear that they expected to take a long, hard look at the final details of the scheme so as to ensure that it met requirements. Perhaps because of that threat, the Government decided to introduce a more generous scheme; the total—for which some people seem to hold me responsible—rose from £8.5 billion to more than £12 billion. Those are very large sums indeed.

The £12.5 billion cost of the second scheme is almost the same as the original cost—if the Government had moved quickly—of deferring for 14 years the entire reduction in SERPS widows' pensions to 50 per cent. of the original amount, as had been suggested some years ago. That is even more than the Liberal Democrat proposal in an amendment that I was pleased to move to the Welfare Reform and Pensions Bill in spring 1999; we called for deferral for a decade. If the Government had agreed with that proposal, they might have got away with a slightly cheaper scheme. However, I am happy that they found even more money than we proposed, and have chosen a scheme that is, in effect, equivalent to the cost of a 14-year deferral.

It is important to note that that money is not hanging off trees; it is taxpayers' money that is being transferred from one section of society to another—from people who will be in employment during the next 40 or 50 years to those who have already paid their SERPS contributions. The original intention of those contributions should be recognised; it was to store up the right to a pension for the pensioners themselves and for their widows or widowers in future. As those SERPS contributions have been paid, it is correct that the Government have acknowledged the right of the contributors to receive a fair return. The fact that the Government have been forced to implement a more generous scheme than they originally proposed demonstrates clearly the power of the PAC and the ombudsman.

The third PAC report on which I want to focus is the 45th report, although it was not included on the Order Paper. Unusually, the Secretary of State for Defence saw fit to reply in the media to that report—on the sad accident of the Chinook helicopter crash on the Mull of Kintyre—before the relevant Treasury minute had been issued. I was shocked and appalled that he should choose to broadcast it on the radio as soon as the report came out. That is not how such matters have been arranged in the past, and it has caused him great difficulty. It will be much harder for him to change his mind—as he is bound to do—and give a more considered opinion. I do not think he will be able to maintain that on-the-spot view.

The Secretary of State described the report as superficial. The NAO and the Comptroller and Auditor General put hours of work into that report—as did various members of the PAC. We probably studied the NAO report at greater length than any others; we held a second meeting on it. We were briefed on it on two occasions by NAO personnel involved in its production. For the Secretary of State to describe that report as superficial was a damning indictment of his failure to consider it fairly and objectively, not of the Committee itself.

For some months, the Secretary of State and other Defence Ministers based their objections to our findings on the line that there was "no new evidence". That has been their answer to everyone who objected to the original findings, which laid the blame on the pilots. Ministers say that, as there has been no new evidence since the original inquiry, there is no reason to change its outcome.

Mrs. Ray Michie

As my hon. Friend is aware, the report refers to problems with the full authority digital electronic control—FADEC—system as one possibility for the accident. Is he aware of a report in The Herald in Glasgow today, stating that the Ministry of Defence has carried out research into wind shear? That is an atmospheric vortex capable of sending military aircraft out of control where high ground, rain, and sea combine at certain temperatures to create a sudden downdraught. Apparently, helicopters are highly vulnerable to wind shear and are incapable of increasing engine power quickly enough to pull free.

I draw my hon. Friend's attention to that fact because there are so many theories and possibilities, but no definitive evidence to justify blaming the pilots.

Mr. Rendel

I am grateful to my hon. Friend for bringing that new fact to my attention. That could be new evidence that the Secretary of State might want to consider. I had not heard of it before; it is undoubtedly relevant and is a further possibility that should have been discussed. The finding that pilot error was the only possible cause must be highly questionable.

The Criminal Cases Review Commission looks back on past criminal cases where there was a finding of guilt. Such cases can be reconsidered in many circumstances. The Government should use that as a precedent in this case, so that they can reconsider and, if necessary, change the findings of the original board of inquiry.

In relation to the claim that there is no new evidence, I draw the attention of the Financial Secretary to comments made after the board of inquiry. When the original board of inquiry met, Wing Commander A.D. Pulford, its president, Squadron Leader E. J. Gilday and Squadron Leader P. L. Cole stated of Flight Lieutenant Tapper—among other things—that it would be incorrect to criticise him for human failings based on the available evidence … The Board conclude that there were no human failings with respect to Flt Lt Cook— the second of the two pilots.

After that, the board of inquiry report went up through various layers of the Ministry of Defence until it reached Air Vice-Marshal J. R. Day, who said: unlike the Board and the Officer commanding RAF Odiham, I reluctantly conclude that the actions of the crew were the direct cause of this crash … I am … forced to conclude that Flight Lieutenant Tapper was negligent to a gross degree. I cannot avoid the conclusion that Flight Lieutenant Cook was also negligent to a gross degree. When the report finally went to Air Chief Marshal Sir William Wratten, he agreed, concluding that the actions of the two pilots were the direct cause of the crash. I also conclude that this amounted to gross negligence. The important point about the quotes from both the original findings of the board of inquiry and the findings of the Air Vice-Marshal and the Air Chief Marshal is that no new evidence was produced between the two different, completely contradictory findings, which were based on the same evidence, being reached. If anything proves that it is possible to reach two completely different conclusions on the same evidence, surely it is those quotes.

Begging the pardon of my hon. Friend the Member for Argyll and Bute (Mrs. Michie), even if there were no new evidence about other possible causes of the crash, it is absolutely clear that, even based on the original evidence, it is entirely possible to conclude that the two pilots were in no way to blame. Therefore, to my mind it is complete nonsense for the Secretary of State simply to say that, because no new evidence has been produced, he cannot overturn what the Air Chief Marshal and the Air Vice-Marshal said at the time. Since the original findings of the board of inquiry were reached, the verdict has been changed by the MOD itself without any new evidence being produced. So it cannot be beyond the Secretary of State to change that verdict again without any new evidence being produced.

I remind the Minister that Air Vice-Marshal Day, Air Chief Marshal Sir William Wratten and the Secretary of State stand on one side of the argument. The opposite conclusion, based on precisely the same evidence, has been drawn by the board of inquiry, the Scottish courts that looked into the matter, various RAF and aeronautical experts, various computer experts who considered the question of FADEC, the Public Accounts Committee, the public in general and the relatives and friends of the crew, above all others. Virtually everybody else who knows anything about the matter has concluded, on the same evidence, that the two pilots cannot properly be found guilty beyond all reasonable doubt. Just those three people have concluded that the pilots should be found guilty beyond all reasonable doubt.

Surely that must suggest that the matter should be reconsidered and that the Secretary of State was wrong to dismiss the PAC report in the way he did—so quickly and without taking a serious and objective look at the report and why it said what it did. I believe that the PAC will not allow the Secretary of State to get away with his dismissive response to our report. I for one shall not do so.

Mr. Alan Williams

The Chairman of the Defence Committee has attacked our Committee for not calling either of the senior officers concerned. Does the hon. Gentleman think that we should perhaps consider holding a special hearing to which we should call both as witnesses?

Mr. Rendel

As the right hon. Gentleman will know, that would be a question for the Committee and for the Chairman, not just for me. However, I have a lot of sympathy with the view that, if the Secretary of State is entirely determined not to review his response to our report, we may need to hold another hearing at which those people could be called to explain, if they are able to do so, what possible reasons there could be for their having so dramatically overturned the findings of those who took part in the original board of inquiry.

I want to say a few words about the workings of the PAC in general, now that I have a year's experience on the Committee. Although we do excellent work, there is a lot that we do not cover or do not cover adequately. A huge amount of work comes before us and the National Audit Office produces a huge number of reports—no doubt it could produce more. I am sorry that the Chairman has had to leave the debate for the moment, but I hope that he will take the time to read my speech and consider the possibility of suggesting to Parliament that a second Committee or a sub-Committee be set up so that we can increase the frequency and depth of our hearings, although some other method of achieving that might be used. Subjects that could and perhaps should be properly reviewed by the PAC are being missed, although the work load for the members is colossal if we participate fully and properly in each hearing, given all the paperwork that goes with them and the need to read the reports produced subsequently.

There is a need for a more formalised structure for members of the Committee to ask further questions towards the end of a hearing. Under our system, the Chairman usually starts a hearing with a quarter of an hour of his questions, then we take it in turns to ask questions for a quarter of an hour. To ensure that hearings keep to time, the Chairman, rightly, is extremely strict, much to the annoyance of those of us who have just one further question towards the end of the 15 minutes. However, he is very generous in allowing members to return to a particular point at the end of a hearing, although there is no formalised structure under which that can be done.

A lot of members would like to ask questions based on answers given by people who spoke earlier in a hearing, so there is a difficulty for those who are lucky enough to contribute at the beginning. Officially at least, that early contribution could be a member's last chance to speak, even though points raised by other members may seem to have received inadequate answers. Members may want to ask a supplementary question about such answers, so there is a case for establishing a formalised structure under which members could re-enter the debate towards the end of a hearing.

There is a need to establish the possibility of holding a second hearing, perhaps a month after the original one. One such example has just been raised by the right hon. Member for Swansea, West and there might be others. Supplementary evidence might be provided after the event or members of the Committee may realise either that they had not got to the point or, on reading the transcript, that an answer was inadequate and that more questioning was needed. People should have the chance to review the transcript and consider whether further issues need to be aired and further points made. At present, that can be achieved only by asking the NAO to put further questions to the witnesses in writing. That is perhaps less satisfactory than bringing the witnesses before the Committee for a second hearing.

There is a need to establish the possibility to make a formalised input to the recommendations of our reports. I may be inexperienced in these matters, but there are few ways in which one can ensure that a particular recommendation is made, at least before a draft report is produced. Members can talk to the NAO, as I have done, to suggest particular recommendations that it might like to include in a draft report for the Committee, but there might be a case for establishing a more formalised way in which to make such recommendations. Of course, it is possible to change the report after the draft has been produced, but that is a rather more complex matter. After a long hearing, it is often difficult to get many complex and detailed changes made to the recommendations. It might be preferable to make such changes at an earlier stage.

I am proud to have had the chance to serve on the Committee for the past year. I am delighted to have done so, because the Committee does vital work on behalf of Parliament. It involves some of the most important tasks that Opposition Members or Government Back Benchers can perform on behalf of Parliament and the nation. I hope that, with the House's agreement, my party will allow me to continue as a member of the Committee for some time to come.

3.40 pm
Mr. Andrew Love (Edmonton)

I apologise to you, Madam Deputy Speaker, and to the Chairman of the Public Accounts Committee, the right hon. Member for Haltemprice and Howden (Mr. Davis), for arriving after the start of the debate. I am also a little surprised that the hon. Member for Newbury (Mr. Rendel) finished his speech sooner than we might have expected when he started to speak.

Members will be glad to hear that I intend to make only a brief contribution on Government information technology and the lessons that I hope we can learn from many past failures. I do not have a particular interest or expertise in this subject, but it is an important element of the PAC's work.

My comments will draw heavily on the Committee's first report "Improving the Delivery of Government IT Projects". I hope to illustrate my remarks by also referring to the 7th report on the immigration and nationality directorate's casework programme and to the 24th report on the delays in issuing passports in 1999. In one report, my right hon. Friend the Member for Swansea, West (Mr. Williams) pointed out that we seemed to have got it wrong for people who want to get out of the country at the same time as we got it wrong for people trying to get in. That sums up the difficulties that we have had with information technology, and those problems go back a long way.

The problems of the Passport Agency were well documented. Headlines on the front pages in the summer of 1999 told us that a fiasco had turned into farce. I represent a London constituency with a large ethnic minority population, many of whom are refugees. For that reason I echo the Comptroller and Auditor General's comment in the report on the immigration and nationality directorate's casework. He mentioned the enormous personal distress that had been caused by the failures in the directorate.

We can talk about the issues in rather clinical terms, but we should remember the human dimension that is often associated with failures in public services. I illustrate that point by mentioning a constituent who had worked for the previous regime in Afghanistan. If he had been returned to that country, he undoubtedly would have had a well-founded fear of persecution, and statistics show that 95 per cent. of the people who have come to this country from Afghanistan are allowed to remain. However, my constituent could not resolve his status.

My constituent's father, who lived in Germany, fell seriously ill, but my constituent was unable to travel to see his father. When his father died, he was buried with the family present. However, my constituent was unable to attend the funeral and it was a long time after the tragedy before he could travel anywhere in the world or visit close family members. We should remember the impact that such cases have and continue to have.

I visited the immigration and nationality directorate during the summer recess. Although I am the first to admit that significant progress has been made, undoubtedly the casework programme still faces major problems that must be ironed out. The problems of the national insurance recording system have also been documented and people continue to fail to receive the right amount for their pension or other benefits.

Such problems have occurred throughout the development of information technology. In the 1970s and 1980s, we carried out large projects. Although they were much simpler than those carried out today and were carried out in-house, outside experts being brought in, there were still problems. In the 1980s and 1990s, during the next steps and market testing regimes, departmental IT was separated out and sometimes privatised. The Government decided to contract out entirely the provision of IT services, but there were still failures. Now the projects are designed, built and operated mainly under the private finance initiative. Although I do not want to discuss the rights and wrongs of the PFI—other Members have commented on that—it is clear that there are still numerous problems with the provision of IT services.

In their recent modernisation White Paper, the Government have committed themselves to providing better public services, and they have given IT a high-profile role in achieving that aim. It will be at the centre of the renewal of our public services and there will be a massive increase in the electronic delivery of information and services to citizens and, just as important, to businesses. We can fulfil the commitments in the White Paper only if we have better procurement.

The one sign that gives cause for optimism is a consequence of the fact that we have had plenty of experience of bad procurement. Over the past 10 years the Comptroller and Auditor General has brought more than 25 reports to the PAC, cataloguing problems and failures in procurement. We should examine those lessons, and the PAC's first report details four stages in the delivery of IT projects that must be improved if we are to make progress. I shall examine what should happen in each of those stages.

The first stage is inception and design. A cultural change must take place, because IT is often introduced as though it were an isolated part of a departmental structure. However, all the evidence suggests that it cannot be dealt with in isolation from the wider issues with which departments and agencies deal. For example, one part of the Passport Agency did not know what another was doing. The IT system was introduced while other significant changes were being made. The result was the failures that we saw in the summer of 1999.

The scale and complexity of some of the projects being undertaken is another important issue. If the White Paper is implemented, such projects will become more common and it is clear that incremental change can often be more effective than a big bang. Smaller, simpler, more manageable projects that make up the totality of a more complex IT system should deliver better and more effective procurement. The software used for casework by the immigration and nationality directorate was immensely complex and created enormous difficulties for the contractor. When I visited the directorate in the summer, I was pleased to see that the software had been broken down into several projects to be introduced over a period.

The second stage is the way in which IT projects are managed. We should recognise that they are not a marginal technical decision but part of the mainstream business activity of departments, and must be treated as such. We need to manage staff in a way that is appropriate for a project. We must provide training and incentives to keep staff with the project while it is introduced. The status of staff, especially in the public sector, must be appropriate to their responsibilities. Most important, staff must be accountable, not only for their success, but for any failures.

There is also the issue of contingency planning, which the Committee has noted is often missing. Such plans need to be in place if anything goes wrong with the introduction of information technology. There are many examples of that, but I shall concentrate on the immigration and nationality casework programme. It was decided that in some non-IT aspects of the programme, people who dealt with casework would work in teams, but because of software failures it was not possible to back up and provide proper contingency plans to allow the service to continue. If it was not possible to provide the service that was required, it was important that, at the very least, things were not made more difficult, so contingency planning is crucial.

The third stage is the relationship that a department should have with its suppliers. It is a truism to say that the supplier should understand and share the business objectives that a project is trying to achieve. That can be viewed in several ways. The roles and responsibility undertaken by the supplier should be fully defined in the contract that it enters into, but in the immigration and nationality project, Siemens, which was the main supplier, had not entered into a proper arrangement for remuneration when the project started. Not only was that a major failure of the contract, but it put at risk the value for money aspect of the project because it was not clear whether the company would deliver it on time, to specification and on budget. No one could fully know that it would because the contract had not been properly detailed.

My right hon. Friend the Member for Swansea, West commented on late delivery in relation to other reports. The consequences of late delivery of a project must be reflected in the contract. That is relevant to any number of previous projects. The compensation that the Passport Agency received for the inadequacies of the main supplier was nothing to the amounts that it had to pay out to another supplier that was affected by the failures of the first. The Government received little compensation for the project on the national insurance recording system, but all the risk—my right hon. Friend the Member for Swansea, West touched on this matter—was not transferred to the supplier. The Government have been living with the consequences of that ever since.

The fourth stage is post-implementation of projects. There must be an open and constructive review that gets to the bottom of whether a project was delivered on budget and on time. It must find out what was right—and wrong—with a project and, of course, learn the lessons and ensure that they are taken on board. Once a system is introduced, the staff who operate it must be able to function effectively with it. It is necessary to commit time and resources for training, so that staff are brought up to a proper standard. Some people might think that that is obvious, but that is exactly what did not happen with the Passport Agency programme. The staff were not ready to work the system when it was implemented, which resulted in major delays.

The Government responded to the report some time ago and made a commitment to address all the issues that it raised and, on 22 May, the Cabinet Office published the report "Successful IT—Modernising Government in Action". The Cabinet Office works closely with the National Audit Office, which is reflected in many of the report's priorities.

I want to mention three priorities. The first is to improve skills, which is especially relevant to the public sector because it has great difficulty in attracting the sophisticated IT management skills that are needed. The second is to change the culture of the public sector by bringing IT into the main stream. It is no longer a marginal activity, and must be at the centre of everyone's consideration. The third priority is strong leadership when IT is introduced, which must come from the top.

The report made 30 recommendations, many of which have been or are in the process of being implemented. It outlines some notable issues. Permanent secretaries will be responsible for driving forward progress on IT projects. It will be interesting to see how that develops. The e-envoy, who has been introduced into Government service, will be responsible for the overall implementation of all 30 recommendations. That is a major task and I hope that he will receive the support of permanent secretaries in achieving that.

The report also recommends producing an interim report on the progress of the IT programme. I hope that the Minister will share it with the House when it is published this month because it is an important matter and we must get it right. The programme has a major impact on the public services that we provide, such as the delivery of benefits by the national insurance recording system and, indeed, the provision of the information and services that are outlined in the White Paper on modernising government.

The Committee wants to ensure that there is value for money for the public purse, which is its main remit. Parliament has an interest in getting IT matters right and it is crucial that we provide services to the public that represent value for money. Parliament has a specific role to play and I hope that the Government will continue to work with it, and specifically with the NAO and the Committee, to ensure that all the recommendations in the White Paper are implemented and delivered.

3.59 pm
Mr. James Clappison (Hertsmere)

This has been a relatively short but important debate on a significant occasion in the life of the House. I congratulate my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis) and all the members of the Public Accounts Committee on their prodigious hard work in producing the 43 reports. Their work is of a very high quality. I associate myself with the tribute paid by my right hon. Friend to his long-serving predecessor, the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), who made such an important contribution to the Committee's work.

The Committee fulfils an important and historic role on behalf of the House. Among the many other tasks that it performs, it defends Parliament's rights in scrutinising how money is spent. That is plainly evidenced by the conclusions of the Committee which we have heard about today, including those on the millennium dome, and what my right hon. Friend the Member for Haltemprice and Howden described in that instance as a deplorable failure to keep Parliament informed. The Committee also defends a vital public interest as regards the quality of public services and the quality of life. One needs only to consider the 42nd report on the control of hospital-acquired infections to see just how important that work can be.

Governments of any political description need to respond properly to the Committee's conclusions in all its reports. Untimely dismissals or rebuttals of its work are not only a discourtesy to the Committee but work against the public interest by prejudicing the future detailed and careful consideration of its work that is called for on the part of the Government. They need to take the time to learn the lessons arising from the Committee's work. I agree with my right hon. Friend's remarks to that effect.

I congratulate my right hon. Friend on his authoritative opening speech. He gave more than a hint of the diligence and toughness that lie behind his approach to the Committee and the important work that he carries out.

The right hon. Member for Swansea, West (Mr. Williams) made a thoughtful speech, most of which was devoted to the important subject of the private finance initiative. He was right to draw attention to the significance of PFI—there are now over £17 billion worth of contracts. He went on to analyse the benefits and problems of PFI. He recognised that there could be a benefit to taxpayers in passing on risk, but there could also be problems. He was right to bring his experience to bear in analysing those problems, in particular the need carefully to study the terms of PFI contracts and to have robust terms on the public side to ensure that when problems arise, costs and inconvenience are not borne by the taxpayer and members of the public.

The right hon. Gentleman also mentioned clawback facilities, and drew attention to the absence of such facilities in a number of contracts entered into by certain Departments. There are lessons to be learned, and I suspect that the subject may well feature in the future deliberations of the Public Accounts Committee. I am sure that the Minister will want to respond to the right hon. Gentleman's points about particular Departments and the disparity in departmental practices as regards clawback facilities, as well as about the accountability of quangos.

The hon. Member for Newbury (Mr. Rendel) mentioned several of the Committee's reports. I hope that he will not mind if I do not follow him down every avenue of thought. He mentioned what he described as the danger of extra rainfall. As a junior Minister in the Department of the Environment who had to deal with the drought during the previous Government, I find that the danger of extra rainfall has not always been entirely self-evident. I hope that the same quarters who under the previous Government were complaining of too little rainfall are not now going to complain of too much rainfall. [Interruption.] I heard the word "inevitably" suggested. I do not know about that, but the hon. Gentleman's remarks certainly brought back some memories.

Mr. Rendel

The hon. Gentleman may conceivably agree that perhaps the lack of rainfall that we experienced in the past and the surplus of rainfall from which we are now suffering arise from the same basic cause, which is that we are doing terrible things to our environment as a result of the over-use of petrol.

Mr. Clappison

The hon. Gentleman advanced his views at some length in his speech, and I hope that he will not mind if I do not pursue that argument. I hope that he is not going to stand on the manifesto of having just the right amount of rainfall in just the right places—I think that I have heard that one before.

The hon. Member for Edmonton (Mr. Love) made what he described as a brief contribution, on government technology. He modestly said that he did not have a great deal of expertise in that field, but if that is the case, he has clearly done a lot of hard work because he made well-informed and interesting comments on the quality of procurement in information technology contracts.

The hon. Gentleman also mentioned the immigration and nationality directorate casework programme, and drew attention to the fact that not only has it involved a substantial waste of public money, but there is an important human dimension to the matter because it has caused anguish to genuine asylum seekers who are in the queue caused by the backlog, waiting for their cases to be dealt with. The hon. Gentleman mentioned constituency cases; I have had similar cases, and I am sure that other hon. Members have too.

I want to deal with two general points arising out of the debate. I cannot tackle all the subjects covered by the Committee, although they are all important in their own way. My right hon. Friend the Member for Haltemprice and Howden did the House a service at the outset by seeking to draw together some of the Committee's work and the lessons that the Government need to learn. He is right when he says that that is an important part of the Committee's work. Recently the Committee has turned its attention to the importance of improving the delivery of Government IT projects, drawing on published reports and taking an overall view on the subject.

As the Committee made clear, the successful implementation of IT projects can bring many benefits to Governments and citizens. There are also risks involved in that implementation, and all too often those risks have been realised. It is implicit in the Committee's conclusions that more needs to be done to avoid the problems that have arisen in all too many cases. The Government need to be aware of the undesirable consequences of IT failure, including, not least, as the Committee points out, the waste of enormous sums of public money and the cost in terms of inconvenience or hardship because of disruption to public services.

A prime example, which has been mentioned several times, is the Passport Agency. My right hon. Friend used the word "fiasco" to describe that example. The worst feature of the fiasco was that so many members of the public bore the brunt of the consequences. The Committee has performed a singular service to the Government in drawing together those lessons in its report, and we must all hope that the Government will seek to learn them.

Finally, I turn to a subject that almost every Member who has spoken in the debate has mentioned. It is a proper subject for the Committee's consideration. I refer to the 45th report on the acceptance of the Chinook helicopter. The Committee's approach was justified, and it was certainly not straying beyond its remit; it was acting well within its historic role and in the public interest. During its work, the Committee came to consider the tragic case of the crash of Chinook ZD-576 on the Mull of Kintyre.

The conclusions of the Committee, reached after a clearly careful and painstaking inquiry, have important implications for the Royal Air Force board of inquiry findings in respect of the crash. I have not had the advantage of participating in the inquiry or of hearing the witnesses, but I take careful note of the Committee's conclusions, in particular: The finding of the RAF Board of Inquiry into the crash of Chinook ZD-576 does not satisfy the burden of proof required and the broader conclusion: The process for convening and conducting RAF Boards of Inquiry is unsatisfactory. In the light of the Committee's findings about the specific board of inquiry into the crash and the conclusions of the Scottish courts and others, which are reinforced by comments made by right hon. and hon. Members today and on other occasions, one can say only that matters cannot be left as they stand.

The Government have yet to respond formally to the Committee's report, but their early—if not premature—public comments suggested that they were minded to continue to support the findings of the board of inquiry. I understand that it might be difficult for the Financial Secretary to the Treasury to deal fully with the matter today, but the Government more generally need to think again. The Committee's report and everything else we have heard mean that their current position is untenable. The interests of justice must come first. That tragic case must be revisited.

4.11 pm
The Financial Secretary to the Treasury (Mr. Stephen Timms)

In last year's Public Accounts Committee debate, I expressed the hope that, unlike my recent predecessors, I would be able to listen to the following year's debate when it came around. I am happy that my wish has been fulfilled.

I begin by echoing others' words of appreciation for the Committee and its Chairman, the right hon. Member for Haltemprice and Howden (Mr. Davis), and their indefatigable efforts in the past year. In last year's debate, I paid tribute to the right hon. Gentleman's energy, allied to real concern about standards of behaviour and value for money in Government—[Official Report, 25 November 1999; Vol. 339, c. 841.] and he has continued to display those characteristics since then. I also endorse his generous and entirely warranted tribute to his predecessor, my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), which has been echoed by others, including the hon. Member for Hertsmere (Mr. Clappison). The right hon. Member for Haltemprice and Howden is right to say that his predecessor deserves much of the credit for the Committee's current status and reputation. My right hon. Friend will be missed when he retires from the House at the next election.

Those of us who have sometimes been on the receiving end of lobbying by the PAC will know that the Committee's Chairman does not work alone. He is amply supported by other members of the Committee, especially my right hon. Friend the Member for Swansea, West (Mr. Williams), whom I thank for his kind remarks, and the hon. Member for Newbury (Mr. Rendel). I am pleased that all three now serve on the steering group in respect of the Sharman report, which will look into issues that we have debated in the past, in the Committee on the Bill that became the Government Resources and Accounts Act 2000 and elsewhere.

As in last year's debate, there are 40 or so reports before the House. The right hon. Member for Haltemprice and Howden says that the PAC has been less prolific in the past year than in previous years, but I believe that there is roughly the same number of reports on the Order Paper this year as last. It must be in recent months that the Committee's prolific production of reports has abated somewhat. Of course, some of the reports mentioned are not on the Order Paper, because the Treasury response to them has not yet been published.

I am sure that the Committee must be the best informed in Parliament on the workings of Government. I certainly understand why the hon. Member for Newbury says that PAC members pick up fascinating insights into those workings and how they affect the lives of ordinary citizens and taxpayers. The Committee is ably assisted in its work by the diligence of the Comptroller and Auditor General, Sir John Bourn, and his staff at the National Audit Office, and by the Comptroller and Auditor-General for Northern Ireland, Mr. John Dowdall, and his staff at the Northern Ireland Audit Office, to whom I am pleased to pay tribute.

The past year has witnessed the most significant development in Government accounting since Gladstone—he always seems to be the cornerstone of such superlatives. The whole basis on which Parliament provides funds to the Executive and on which the Executive account to Parliament for the use of those funds will be fundamentally changed by the introduction of resource accounting. The Government Resources and Accounts Act 2000 represents the culmination of many years' work on the change by the current Administration and previous ones. I pay tribute to the conscientious work of the NAO and the Chairman and members of the PAC in scrutinising that Bill. The advice of the NAO, the hearings the Committee held, their reports and the contributions made by Members of Parliament in the House were influential in significantly improving the Bill. I am pleased that the Government were able to take on board so many of the suggestions made.

The Act also gives the Treasury powers to incur expenditure to establish Partnerships UK, which is the successor to the Treasury private finance initiative taskforce. Partnerships UK was launched in the summer and has already started work on a number of important public-private partnership projects. It will help to ensure that those partnerships are better structured and more efficiently procured, and that they deliver better value for money to the taxpayer. Last week in South Africa, I was pleased to be able to announce that Partnerships UK is to provide support to the South African Government in the establishment of PPPs to improve public services in that country.

Shortly, we shall make a commencement order to bring into force the majority of the provisions of the Act. Those include the provisions required to replace appropriation accounts and cash-based supply with resource accounts and resource-based supply from 2001–02 onwards, and certain powers relating to the production of whole-of-Government accounts and other powers to improve the way in which Government accounts are prepared and produced.

As well as that Act receiving Royal Assent, this year has seen significant milestones along the road to the full implementation of resource accounting and budgeting. Departments have made significant progress in the preparation of resource accounts and resource-based estimates; Parliament, through the PAC and other Committees, approved the Government's timetable for the introduction of resource accounting and budgeting; and the spending review 2000, which set out spending plans for 2001–02 to 2003–04, was conducted on the basis of resource budgeting.

From the outset, the PAC endorsed the more commercial approach brought about by resource accounting and budgeting. The Committee acknowledges that it should improve the clarity and the quality of the financial information that is available to Parliament and that it will assist departmental management. I am confident that the change to resource accounting and budgeting will bring significant benefits to the overall management of public expenditure and the management of individual departments. With others, I look forward to those benefits being realised.

We plan to introduce consolidated accounts for the central Government sector from 2003–04 and full whole-of-Government accounts covering the full scope of the public sector from 2005–06. Whole-of-Government accounts will provide better quality, more transparent data for the planning of fiscal policy; better management of public services; and more effective distribution of resources. We look forward to the PAC and the NAO contributing to the development of whole-of-Government accounts in the corning months and to working with them on that.

Without doubt, the most intense debates on the Government Resources and Accounts Bill were those relating to the audit and access rights of the Comptroller and Auditor General. I acknowledge again the tenacity with which members of the Committee that considered the Bill pursued the rare opportunity—as they saw it, with some justification—to extend the CAG's rights. The Act contains a new statutory right for the CAG to inspect documents held by contractors that are carrying out financial functions for Departments, and powers for the CAG to be appointed auditor of bodies that he is currently prevented from auditing by statute. It also contains powers for the CAG to be granted access to documents held by third parties. I imagine that those are the measures that constitute the 99 per cent. that was referred to by my right hon. Friend the Member for Swansea, West.

The Government have made it clear that we will implement the powers in the light of the outcome of Lord Sharman's review of audit and accountability in the 21st century, which is expected to be completed early in the new year. It is considering exactly what is public money, what degree of audit and accountability is appropriate to public money and what are the appropriate arrangements for those in receipt of public money to account to Parliament. We shall be receiving conclusions in the fairly near future.

When considering the Bill, we gave an extensive airing to performance validation. This Government have been much more open and transparent about performance monitoring than previous Administrations. In particular, we have published public service agreements, with 160 top-level targets set out in the July spending review announcement. We have also published service delivery agreements, which set out in more detail how the Government will meet their PSA targets. I believe that the targets will help to ensure that there are fewer of the shortcomings in public service delivery which the Committee has identified in a number of the reports that we are considering.

The interest taken by the Committee and the NAO in the progress of modernising government has been helpful. I welcome the PAC's encouragement of joint accountability for the delivery of objectives that do not fit easily into traditional Whitehall structures. I hope that there will be more joint hearings, such as the one to which the right hon. Member for Haltemprice and Howden referred on the criminal justice system, the subject of the Committee's 27th report. I hope that we shall receive further recommendations from the Committee on how joint accountability structures in government might be improved. They can sometimes be difficult to set up successfully.

The modernising government agenda also covers important areas of procurement and project management, to which several right hon. and hon. Members have referred, especially in the context of IT projects. That has been a continuing concern for the Committee, as the reports set out on the Order Paper demonstrate. That is particularly the case of the first report on the improving delivery of the Government IT projects. Subsequent reports have been referred to as well, including those on the Passport Agency—I think that that is the 24th report— and on the immigration casework system, which is the seventh report. Many important lessons have been drawn from all the reports.

My hon. Friend the Member for Edmonton (Mr. Love) illustrated vividly the personal consequences for individuals when things go wrong, and the importance of ensuring that they go wrong as infrequently as possible. It is important also that we learn lessons from the problems of the past.

In April, the Government established the Office of Government Commerce. Its role is to provide a firmer sense of direction in procurement, and to ensure adoption of best-practice approaches in the public sector. I visited the OGC a couple of weeks ago and was impressed by the determined way in which it is setting about its role. It has set an ambitious target of securing £1 billion of value for money gains as a result of its work, and is making progress in a number of ways, of which I shall single out two.

First, the OGC is developing a new and independent review process for all new procurements—the so-called gateway process—which will tackle known weaknesses in handling large projects, especially in IT and construction. This was foreshadowed in the recent Cabinet Office report on improving IT project performance. I am pleased to say that pilot testing of the gateway process has confirmed its capacity for improving value for money, timeliness and cost management of high-risk procurements. Further details of the process will be announced early in the new year.

My hon. Friend the Member for Edmonton referred to the interim report and guidance that is due. I understand that that is already available on the central information technology unit website.

The second initiative is that the OGC is harnessing the Government's collective purchasing power to improve the way in which Departments manage suppliers. For example, it is gathering information about key IT and non-IT suppliers for dissemination to Departments. It has employed a consultancy supplier to develop a mechanism to collect and analyse procurement expenditure across central Government, which will report by July 2001. It is also taking steps to improve the Government's relations with their strategic suppliers, which are being assessed in terms of their criticality to Government business, the value of spend and the availability of substitutes and their strategic influence.

We want to ensure that we understand well the nature of the business that we have across Government with those who supply the Government. In the past, there has often been too much fragmentation. Companies have known much more about their business with Government than the Government have known about their business with them. I hope that the Committee will take some encouragement from these developments. They will provide an opportunity to implement some of the lessons drawn from the work of the Committee.

I shall say more about the private finance initiative and public-private partnerships and pick up the points made by my right hon. Friend the Member for Swansea, West. We have taken a range of measures to improve the PFI and to generate other forms of PPPs, which have brought greater clarity and confidence to the public and private sectors alike. They hold out the promise of significantly better outcomes. We have undoubtedly been helped in that process by the Committee's work.

Since May 1997, PPP contracts have been signed for 259 projects, generating £12.6 billion of private sector capital investment. Another 296 projects are in procurement, with the potential to generate an additional £16.2 billion. That will take us to nearly £30 billion of investment. I welcome the support that my right hon. Friend the Member for Swansea, West expressed for the principle of that approach.

The PFI and other forms of PPP are delivering value for money for the taxpayer and good-quality services for our citizens, and making an increasingly important contribution to modernising government. The Committee has continued to be active in examining PFI projects, and has produced many valuable recommendations. I was reading the Committee's 41st report on the Prime project. Many innovative features negotiated by the Department of Social Security were recognised in what was a large and complex PFI project—possibly the largest ever undertaken by a central Government Department.

I remind the House of the Committee's view of the initiative. The Committee stated: We welcome the risk transfer incorporated in the contract on capital expenditure, particularly with respect to achieving compliance with statutory requirements for disability access. We recommend that future deals of this kind examine the risk transfer achieved in the PRIME case and seek to emulate it where appropriate. I am glad that the Committee has been able to recognise that, in that instance and in others, PFI has worked well, and to draw the attention of others to such examples. I am especially pleased that my hon. Friend the Under-Secretary of State for Social Security is on the Government Front Bench listening to the debate.

My right hon. Friend the Member for Swansea, West also referred to the potential windfall gains from refinancing PFI contracts, which has been a major issue in the recent PAC hearing on Fazakerley prison, and reference was also made to Dartford and Gravesham hospitals. Steps have been taken to reduce the chances of such problems recurring. The standard contractual terms produced in 1999, together with the development of the PFI market under the Government's proposals, make it much less likely that new PFI deals will result in windfall gains for the private sector of the kind to which my right hon. Friend referred. However, if there is evidence that such problems have recurred since 1999, I should be interested to see it.

Guidance to cope with the residue of previously agreed deals has been issued by the Office of Government Commerce. Departments are encouraged to seek an equitable outcome in cases where their consent is required to contractual changes or revised financing arrangements. In practice in such cases, that should result in the sharing of gains with a private sector partner on a 50:50 basis, to which my right hon. Friend the Member for Swansea, West referred, unless sound reasons exist for departmental accounting officers to move from that position. However, some older contracts may not have been changed and the problem could still arise.

As the Committee has noted on more than one occasion, competent risk management is as crucial for the successful management of projects and other operations in government as it is in the private sector. That is why the Government have embarked on an important initiative to support that aim. In line with private sector initiatives to improve corporate governance and the management of risk, we are introducing a new procedure whereby each year accounting officers signing off the accounts of Departments will need to confirm that their Departments have satisfactory systems to review the adequacy of internal control. Moreover, those statements will be reviewed by the CAG. Again, I am delighted to acknowledge the NAO's important contribution in developing those new arrangements, which will be introduced in 2001–02.

The right hon. Member for Haltemprice and Howden and the hon. Member for Newbury spoke particularly about the huge systemic failure in inherited SERPS—the horrifying breakdown in the machinery of Government in the past 10 years, to which the right hon. Gentleman referred. It is vital that no such breakdown recurs. I am pleased that both Members welcome the announcement on those problems made by the Secretary of State for Social Security.

I want to deal with the exchange between the right hon. Gentleman and the hon. Gentleman on whether letters of direction might be placed in the Library. Of course, some directions might relate to commercially confidential matters, but I should like to consider carefully the suggestion that the normal expectation would be that directions issued to accounting officers should be placed in the Library. I shall reflect on that matter.

Mr. David Davis

As the Minister will know, I was thinking on my feet when I responded to that question. Letters of direction might involve commercial confidentiality or security implications, both of which would be inappropriate to be placed in the Library.

Mr. Timms

The right hon. Gentleman is absolutely right about that. He and the hon. Member for Newbury are right to suggest that, in general, such action should be considered, and I shall certainly consider it. Such letters are already copied to the CAG, who may investigate them if he wishes.

Mr. Rendel

I am slightly confused about whether the Minister can choose whether such letters should be placed in the Library. I should have thought that the Chairman of the Committee—or perhaps the whole Committee—would choose whether the letters should be placed in the Library, although the Minister might wish to consult the Chairman.

Mr. Timms

I am grateful to the hon. Gentleman; I shall also reflect on that point, together with the right hon. Gentleman.

As always, this year's debate on public accounts has been reassuring and instructive. It has been reassuring because it shows that the long-established parliamentary scrutiny on which we pride ourselves is as effective and searching as ever. It has been instructive because that scrutiny provides an opportunity to show how procedures can be improved, as well as providing a vehicle for justified criticism when projects are not properly thought through. Of course there will be disagreements from time to time, but such debates help to take forward the wide range of concerns that the Government and Committee share.

I conclude from the debate that the Government need to focus on two matters. First, we must continue to improve the management of the systems by which public money is collected and deployed. Secondly, we must continue to improve the management of projects to deliver public services. The Committee's reports continue to make those priorities clear, and I am happy to endorse them.

Question put and agreed to.

Resolved, That this House takes note of the 39th and 41st Reports of the Committee of Public Accounts of Session 1998–99, of the 1st to 9th and 11th to 37th Reports of Session 1999–2000, and of the Treasury Minutes on these Reports (Cm 4576, 4593, 4656, 4695, 4688, 4732, 4758, 4798, 4822, 4863, 4886 and 4901).