Public Accounts

I was very keen to participate in this debate, particularly as our friend the Chairman of the Committee, the hon. Member for Gainsborough (Mr. Leigh), was so heavy in persuading us to take part. The debate is a useful and interesting opportunity to get some sort of summation of the work we have done during the year. Reports come to us so quickly that it is often difficult to fit them into a framework or to keep pace with them. The schedule of reports up for debate today makes fascinating reading. We have had a very successful year with some big subjects and some small, but all of them gave an insight into Government procedures that is not available to any other Committee. This has certainly been the most fascinating Select Committee that I have ever been on. If I may transfer my useful sycophancy from the leader of our party to the Chairman of the Committee, I must say that the Committee has been extremely well led. I very much admire the staccato series of bullets that he fires at officials, which gives us headings under which we do our own rifle work later in the debate. That gives an important lead to the Committee, and he has been an effective Chairman. He is effective in giving a lot of diverse characters—we are a high-powered Committee, and the Committee members here today, including former members, are particularly high powered—our heads and allowing us to do our own thing. I deprecate the kind of wry expression that he sometimes assumes as I launch into another insane attack on some institution—he should keep his feelings to himself—but he has the important skill of leadership. The interesting thing about the Committee is that it is the one I have served on that is most relevant to the needs and interests of ordinary people. After all, it is their money that we are talking about. We produce reports on things that affect their lives, such as the cost of medicine, which hits home to many people, or the state of accommodation for servicemen, and who is responsible for the myriad failures in that area. As part of our inquiries, we have looked at whether people's doctors provide a good service, and we have helped in that area. We have considered the cost and state of our roads as we examined the Highways Agency and the effectiveness of the vehicle licensing agency in Wales. Highlighting the failures to report and deal accurately with evasion by motorcyclists was quite an achievement. I did not realise that it is impossible to photograph on an electronic device the registration plates of motorcyclists. Having seen how easily motorcyclists can evade the speed cameras, I am considering the purchase of a high-powered motorbike for my wife, who is accumulating points in a dangerous fashion. A motorbike might be the only way out. We had an insight into the sort of problems that ordinary people face and we have had a direct impact. People pay taxes and tax will become an increasingly important issue as the election approaches and it becomes a battleground for the parties, and more so, as the economy moves into recession. It will then be essential to see that money is well spent. Tax will become a more important issue, and we are the main agency for seeing that taxes are well and effectively spent, and that people get value for money. The infuriating thing is that our work is, to an extent, post-mortem work. The people we get to grill are usually not the perpetrators—they are not, as the US Securities and Exchange Commission would say, in its examinations of financial fraud in the United States, the people responsible for the decisions and the deficiencies being examined, but their successors. The people who made the mistakes have usually moved on and been rewarded with some kind of honour, as my hon. Friend the Member for Thurrock (Andrew Mackinlay) has pointed out. We deal with the accounting officers and it is appropriate that we should do so. However, it would be nice occasionally to be able to call the perpetrators of the failures and problems that we deal with. We did just that in the case of the Rural Payments Agency and the failure of the European payments, when we examined, after some delay and with some difficulty, the role of the agency's chief executive. We were able to show, essentially, that the failure was not only his, but a failure all round. It was a failure by the civil service—by departmental officials, and those right at the top, too—to stand up to Ministers when asked to do the impossible and say, ““This can't be done, especially not with the staff resources that we have available.”” It is the responsibility of the civil service not only to be a ““can do”” service, but to be a ““can't do”” service when it sees that its work is impossible and when it sees the damage that will be done to the Department and itself. The civil service must have more confidence and speak out. We should call the perpetrators. As my hon. Friend has said, all too often they are rewarded with an honour, just as people in business who fail are rewarded with high monetary compensation—the case of Adam Applegarth at Northern Rock comes to mind. Unfortunately, the civil service has its equivalents. There should be penalties for failure and they should be made clear. I fear that we are occasionally bamboozled. I instance a recent inquiry into Postcomm, which seems to be dedicated to ruining the Royal Mail as a service. The other regulators seem to be concerned to give special concessions and advantages to those with power and money, who can get better prices, the costs of which are then imposed on the vulnerable, who pay more for the services that they receive. Postcomm says that it is protecting a universal service, but that service is deteriorating. We do not get Sunday deliveries now and Saturday deliveries are under threat, and there is only one delivery a day, when there used to be two. However, after Postcomm had appeared before us and defended its procedures, it made an announcement saying not only that it continued to be dedicated to promoting competition and liberalisation, because they were providing a"““far better customer focus and strong incentives for all mail operators””" to serve larger companies, but that it wanted a part-privatisation, which was not mentioned at our hearing. Quite out of the blue, Postcomm admitted a major financial problem, with the pension funds in particular, which it had denied at the hearing. Having admitted that it had reduced the profitability of the Royal Mail, Postcomm went on to advocate making Royal Mail's activities subject to the same rate of VAT as the private operators. None of that was mentioned at our hearing, but it all appeared subsequently. We should have known that that would happen, because it is unreasonable to take one position at a hearing and then announce something totally different the next day. That makes me think. The Chairman justifiably paid credit to Sir John Bourn and to the devoted work of his staff, which I heartily second, but is there not a case for the Committee having a small research staff of its own for the immediate preparation of briefings for Committee members before meetings? It is impossible for us to keep up with commercial developments, consultants, companies' successes and failures and what is happening across Departments. My hon. Friend the Member for South Norfolk (Mr. Bacon)—I shall call him my hon. Friend for Committee purposes—assiduously keeps up with such matters and must have an enormous machine behind him. I hope that all those people have not been transferred to work for Boris in the cucumber. My hon. Friend's sources of information are myriad and enthusiastic. He sits there with a pile of information that I do not have, and I try to peer at his notes so that I can ask some telling questions. The rest of us do not have that capability or support—or, indeed, the passionate enthusiasm that he shows. It would benefit our procedures to have a research staff to bring us up to date on the clippings, at least, and on the latest developments, between the publication of the National Audit Office's report and our examination of it. I should like briefly to follow the Chairman's example—this is another example of my growing sycophantic tendencies—by following certain themes. One thing that emerges from the reports is the constant tendency to overreach, or to try to do too much. That is a political problem that comes from Ministers, who are subject to the temptation of promising certain things. They use tripartite phrases, saying that something will not only satisfy world peace and build up British defence, but will do good for Mrs. Bloggs of 13 Columbus way, Grimsby. We try to do too much, and in many cases Ministers try to impose too much on Departments that are not capable of carrying the load. The RPA has been a disaster. There are now cuts in the British Waterways budget and proposals to sell lock-keepers' houses as a consequence of the failure of the payments scheme. That disaster and the fines from Europe for being naughty stem from the tendency to overreach. Ministers committed themselves to the most complex payment system available on the ground that it was the best way of proceeding. It was a much more complex system than anyone else used, and the results were disastrous. The agency simply was not capable of responding, particularly because it was faced with efficiency requirements that led to the redundancies of large numbers of staff. Its was firing staff and then was suddenly faced with the need to introduce and implement the most complex system of rural payments of any nation in the European Union. That was barmy, and the agency could not cope. Interestingly, civil servants and the agency tried to cope, and did not effectively warn Ministers that things were not going to happen. Ministers continued to get reports that programmes were rolling ahead and that everything was okay until a week before the payments were due, when they were suddenly faced with disaster. That was partly due to the civil servants being too diffident, but it was largely due to Ministers taking on a commitment and overreaching in the way that I have described. A ministerial head rolled: Lord Bach lost his job, although he was personally told by Tony Blair that that was not because of the disaster with rural payments, which makes me absolutely certain that it was. That is just one example. We see the same kind of overstretch, and a tendency to try to do too much, in defence. Our major projects report showed that the budgets were being maintained largely because commitments were being shuffled on to other budgets, and therefore effectively concealed. This has led me to believe that we have too many major projects, and that they are too expensive and too technical for the system to bear. Added to all that is the commitment to update our nuclear deterrent, which is a very expensive project that has been heaped on top of other projects. All these projects are overstretching the Department's resources, and the ability of the taxpayer to finance them. This is incredible. We do not need the nuclear deterrent. The world has changed, and we are no longer in a cold war. We can never use our nuclear deterrent. Who would we use it on? Would we ever use it without the authorisation of the Americans? It is extremely expensive, yet, because of the system of political overreach, we are now placing an obligation on the Ministry of Defence at a time when it is already stretched because we are fighting two wars, in Iraq and Afghanistan, and putting in more effort than any of our NATO allies except the United States. There is already equipment strain, and problems with coping with those who have been wounded and damaged in the war. This is another example of overstretch that emerged in our report. It is a warning to us as politicians, and certainly to Ministers, to think through the commitments before they are made. Another example involves efficiency savings. They are now part of the magic of government. There is a pretence that we can go on making efficiency savings of 2, 3, 4 or 5 per cent. every year, but this amounts to a process of continuous anorexia. My own figure does not testify to this, but I understand that anorexia is eventually fatal, which is why I have managed to avoid it through my own personal eating habits. When it comes to efficiency savings in Government Departments, it is also a myth. Our report on this subject states:"““The Government's Efficiency Programme is designed to achieve ongoing efficiency gains across the public sector of £21.5 billion””." Whenever politicians are told that the tax burden is too heavy, they always say, ““We're going to make efficiency savings, and we'll cut out waste.”” But that never happens. Only two thirds of the £21.5 billion target was expected to release resources for other projects. The efficiency savings involved were often mythical. Our report also rightly pointed out:"““There is evidence that some efficiency projects may be having an adverse impact on service quality.””" It gives an example in the Department of Health, where there has clearly been an impact on service quality. The report goes on to state:"““Improvements in efficiency might not be sustainable.””" For example, the Ministry of Defence's early decommissioning of some of its fast jets gave a one-off financial saving but reduced the capability of the Royal Air Force to deal with certain situations. So I believe that there is a good deal of myth involved in these efficiency savings. A large proportion of them are phoney. Jobcentre Plus made efficiency savings, but as I pointed out in Committee, they are often made by shifting costs on to the clients, who now have to be dealt with by telephone. If they do not have a telephone, too bad; they then have to sponge on the citizens advice bureau or my office in Grimsby or a centre for the homeless and use their telephones to get through to fix up an appointment. It has to be done and dealt with by telephone and personal bonding between the Department and the recipient is damaged. That is one example and, as I have pointed out at some length, the Rural Payment Agency provides another. Another example of overreach applies to consultants. There have been fewer examples this year of overpayments and excessive use of consultants, but whenever a problem arises, there is still a tendency to say ““Bring in the consultants””. The assumption is that the civil service cannot deal with the problem, but that consultants have access to some form of higher wisdom; they are the way, the truth and the light, as far as the Government are concerned, so they bring them in at inordinate expense. What we need is an audit of the efficiency of consultants. Some are bad, some are good, some are brilliant and some are bums. I think the hon. Member for Gainsborough mentioned the role of the Office of Government Commerce. It is not providing effective advice on who to use and it is not auditing performance on a continuous basis so that it can make serious recommendations. It acts as a sort of agency for the employment of consultants rather than providing a critique of their employment. There are certainly problems with the competence of Departments in some areas. I would cite the issue of Icelandic compensation in the fisheries industry as an example. The Department of Trade and Industry, as it was, did not have enough expertise or knowledge of the industry to provide a foolproof system. Some of the mistakes it made were laughable, and I engaged in a long correspondence over this matter. The DTI seemed to think that the Icelandic limits were 200 terrestrial miles rather than 200 nautical miles, which is much more. Indeed, the area extending to 200 nautical miles included large chunks of Faroese waters, so many people should have had compensation accordingly. Because the Department did not understand, it took ages to convince it that this was the case. It did not know the practice of the industry, decreeing that a 12-week break in service precluded people from compensation. In Grimsby, when the fisherman who used to fish in Icelandic waters could no longer do so, he was forced to fish in the North sea. That was deemed as being a break in service, although it was part of the structure of the industry and a Government necessity. A ludicrous situation developed: some fishermen got compensation because although they had had a 12-week break, they had served it in prison and had not been paid; while others who had spent that time on the North sea and consequently had been paid were not entitled to the compensation. Clearly, some Departments make mistakes by not listening enough to the voice of the industry, while other Departments listen too much. I was very worried by the tendency of Her Majesty's Revenue and Customs to schmooze with the big taxpayers in its dealings with big companies. I find it difficult to believe that these companies, some of which are chiselling crooks like the rest of us, comprise honest and honourable people who always rush to pay their taxes. That attitude—of rushing enthusiastically to pay taxes—is associated with no company that I have ever known on the market, yet that is what HMRC appears to believe. I was a bit concerned about that, and also by the small number of staff employed to deal with big-company tax evasion and avoidance in comparison with the number employed to deal with social security fraud, who bring home much smaller sums than are available to those dealing with companies properly. I do not want to go on for much longer, as I have already exceeded my welcome. I sense that from the growing indifference to my jokes as the debate proceeds. However, I want to issue a few more congratulations. We have produced some excellent reports. We have speeded up the dilatory progress of the Thames Gateway scheme, which was plodding along far too slowly.