Publicly Appointed Bodies: Financial Mismanagement (Hansard, 26 July 1993)

The Minister of State, Department of Transport (The Earl of Caithness)
My Lords, government departments provide a great deal of guidance which is designed to ensure that financial mismanagement does not take place. New guidance is issued as the need arises.

§ Lord Dean of Beswick
My Lords, I am grateful to the Minister for that Answer. However, following the events in the Welsh Development Agency, the Wessex Regional Health Authority and the West Midlands Regional Health Authority, is it not clear, when one looks at the scale of the money that has gone astray, that those guidelines and advice are not sufficient to protect the public purse?
Will the Government seriously consider introducing new measures based on the code of conduct which governs people elected to local authorities? Does the Minister understand that I find it strange that we are talking of over £100 million in total, yet no appointed person has been brought to book? Will the Minister give us a copper-bottomed guarantee that no Secretary of State is indemnifying against prosecution people who have been involved in wrongdoing?

The Earl of Caithness
My Lords, I know that the noble Lord will be aware of the difference between a local authority, which is an elected body responsible to the electorate, and an appointed body. However, let me make it absolutely clear that, whether it is a local authority or an appointed body, the Government cannot tolerate any form of financial mismanagement.

§ Lord Cledwyn of Penrhos
My Lords, while we all recognise the gravity of the reports of the Public Accounts Committee of another place, does the noble Earl agree that the Welsh Development Agency has an excellent record of service to Wales, especially to those areas which have high unemployment? In view of the allegations made in the report, can he say whether the Government propose to take any further action?

The Earl of Caithness
My Lords, that is being considered at the moment.

§ Lord Ennals
My Lords, has the Minister seen the report on the NHS supplies authority which was 950 published recently? It shows that over £100 million of taxpayers' money has been lost, and refers to inefficient management techniques and 'muddled contracts. Is that not an enormous sum at a time when the National Health Service is clearly under grave pressure?

The Earl of Caithness
My Lords, the National Health Service has been better funded by this Government than by any other government. Notwithstanding that point, any financial mismanagement is a serious offence and is taken seriously by all departments.

§ Baroness Fisher of Rednal
My Lords, is the Minister aware that, according to the press today, at the moment Astra Training Services—a government. agency which has been taken over (if one can use that phrase) by civil servants—has company debts of £10 million? When the Minister replied today he told us that all the appointed people were capable businessmen. I suggest that he would do much better to get people from car boot sales involved.

The Earl of Caithness
My Lords, we look only for the best people. I take into account what the noble Baroness suggested.

§ Lord Richard
My Lords, can the Minister confirm some figures? Is it right that in 1978–79 quangos spent £14 billion; yet by 1990–91, the figure was no less than £41.7 billion? Is the Minister aware that he paused before he completed his answer to my noble friend Lord Dean? He said that my noble friend would be aware that local authorities are different, that they are accountable to their electorate, but that appointed bodies are not. He then moved sharply on to something else. Does he realise that that is precisely the point? In relation to the quangos, there is a distinct feeling in the country that they are non-accountable, out of control and ought to be made more accountable.

The Earl of Caithness
My Lords, the noble Lord will be delighted to know that the number of executive NDPBs has declined since 1979 from 492 to 369 13 years later. Of course, the figure which he quoted of about £42 billion takes into account expenditure by training and enterprise councils which are non-profit-making, private sector bodies and health bodies which are part of central government. So I do not think that his figure is quite accurate.

Viscount Tonypandy
My Lords, is the Minister aware that, in spite of the fact that in Wales we are deeply grateful for the work that has been done under the Welsh Development Agency, there was great unease over the recently published report? Will the Government be making any further statements on the matter?

The Earl of Caithness
My Lords, as I said to the noble Lord, Lord Cledwyn of Penrhos, this matter is being further considered. If there is more to say, of course the Government will say it.

§ Lord Grimond
My Lords, the figures for quangos quoted by the noble Lord the Leader of the Opposition are not accurate. Can the Minister give us the accurate figures for quangos?

The Earl of Caithness
My Lords, I do not have the exact figure with me. I seem to recall that it was a very different figure. It was a figure that I gave the noble Lord on the last occasion. He then queried the figure, and said that it was £42 billion. That is why I had a statistical answer for him, because I thought that he would ask the question again.

§ Lord Dean of Beswick
My Lords, in his Answer to my first supplementary question the Minister referred, as my noble friend Lord Richard said, to the comparisons between local authorities and quangos. Is the Minister aware that some people wear two hats: they are leading councillors or leaders of councils and also chairmen or appointed members of quangos? Is it not strange that, in guarding one sector of the public purse, they are very quickly open to prosecution; whereas in the other case it seems to be within the gift of the Secretary of State, if anything is found to be wrong, whether they are proceeded against or given a knighthood and a golden handshake, and moved on?

The Earl of Caithness
My Lords, the principle is exactly the same. We cannot tolerate any form of financial mismanagement, whether by local authorities or by NDPBs.

§ Lord Elton
My Lords, does my noble friend think that the experience of Lambeth suggests that applying public control methods to the quangos would have any greater success?

The Earl of Caithness
My Lords, I believe that all of us in this House are fully aware of some of the antics that Lambeth Council got up to. My noble friend is right to draw the matter to your Lordships' attention.

§ Lord Richard
My Lords, the Minister is aware that, in relation to Lambeth, the district auditor looked at it, as he is bound to under the Act, and came up with his report, which has led to action. Is that likely to happen with a quango?

The Earl of Caithness
My Lords, as I said to the noble Lord, Lord Cledwyn of Penrhos, my right honourable friend the Secretary of State is looking at that specific point with regard to the Welsh Development Agency. Action will be taken where appropriate.

§ The Countess of Mar
My Lords, can the noble Earl say whether the Government's intolerance will lead to prosecutions in the health service, particularly in Wessex and in the West Midlands?

The Earl of Caithness
My Lords, where there is a case, I am sure that appropriate action will be taken.

Lord Bruce of Donington
My Lords, while the noble Earl seems to concentrate from time to time on Lambeth, will he allow his mind to roam a cog further along the wheel and refer to Westminster?

The Earl of Caithness
My Lords, my mind was drawn to the question of Lambeth as opposed to it being raised at my instigation.