ORDNANCE SURVEY (Hansard, 24 January 1984)

§ The Minister of State, Department of the Environment (Lord Bellwin)

In March of this year Her Majesty's Government sought the views of the Ordnance Survey Advisory Board about the financial structure of the Ordnance Survey, and in particular about the efficacy of a trading fund.

The board gave their report on 27th October and copies were placed in the House of Lords Library on 8th November. I would like to take this opportunity to thank the board for their prompt handling of this difficult matter and for providing their considered advice. I am indeed very grateful to them.

The board agree with and support the Government's view that the Ordnance Survey should be given every incentive to be cost effective and efficient, and to reduce the cost to the taxpayer. The board were not convinced by the arguments put to them that the transfer of operations to a trading fund would necessarily be detrimental to the activities of Ordnance Survey. Fears that a commercial approach would be pursued at the expense of the survey's basic tasks would only be realised if there were bad management of Ordnance Survey activities. The board saw no reason why this should be so. However, the board did see difficulties with the kind of contractual relationship between Ordnance Survey and the Department of the Environment which a trading fund would require. The board's overall conclusion was that the general objectives of strengthening financial and commercial disciplines within the survey might be better pursued by other means. In their view Ordnance Survey should continue to be funded by a Vote. The Ordnance Survey should be given a clear statement of objectives, and a clear remit to be an efficient, business-like operation, with performance measurements against which it would report achievements.

After carefully considering the points made by the board, Her Majesty's Government have decided not to proceed with the proposal for a trading fund and to accept their recommendations for an alternative approach. These are—

(a) that targets for the financial performance of the Ordnance Survey should continue to be set and should in future be reviewed about every three years.
We have confirmed the present targets for 1984–85 and will shortly be discussing their updating for later years with the Ordnance Survey and OSAB;

(b) that the annual trading accounts for the Ordnance Survey, including statements on revenue and expenditure by main product groups, should be published, and that the basis of these 231 accounts might be independently reviewed by commercial auditors.
We propose to accept these recommendations commencing with the financial year 1984–85. From that year Ordnance Survey will publish trading accounts in addition to their normal vote account. The formal audit of these trading accounts will remain a matter for the Exchequer and Audit Department; but we have asked Ordnance Survey to seek external professional advice on the basis used for their preparation. In addition, we intend to publish formal guidelines for Ordnance Survey commercial activities;

(c) that a rolling five-year policy and plan for the Ordnance Survey should be prepared and published after approval by Ministers and consultation with the advisory board.
Work is already in hand on this, and we have asked Ordnance Survey to complete it so that we can publish a rolling plan during 1984. (Ordnance Survey have been asked to consider whether this might be combined with the OS annual report.) The Parliamentary Under-Secretary of State at the Department of the Environment (my honourable friend the Member for Bristol West) has also been asked to exercise a special responsibility for Ordnance Survey matters and to oversee the implementation of these changes; and

(d) that the annual reports from the director general and from the advisory board should be published. We intend that the director general should continue to publish his annual report and that the report from the board should also be published.

The board also suggest that grant-in-aid status might have advantages for Ordnance Survey and that, in the longer term, this should be studied. We have considered the possibility of grant-in-aid status for Ordnance Survey, but believe that the relationship 232WA between Ordnance Survey and the department sponsoring such grant-in-aid would be subject to problems similar to those identified with the previously proposed quasi-contractual relationship with the Department of the Environment. As the board suggests, we would like to end the uncertainty about the future of the Survey. We have therefore decided that the grant-in-aid option will not be pursued and that Ordnance Survey will remain a vote-funded Civil Service department. I would like to pay tribute to the management and staff at the Ordnance Survey who despite the uncertainties have made such excellent progress during these past few years.

Finally the board recommended that the Government should set out their detailed response to the Serpell Committee's recommendations which were made in 1979. We accept tha board's recommendation. The Government accept the main thrust of the Serpell Report, and will be publishing a detailed response to all its recommendations during 1984.