Public Accounts

My hon. Friend will have to think of something more useful to buy his wife for Christmas. The hon. Member for South Norfolk (Mr. Bacon) asked a series of, as always, relevant questions. He spoke of ending the ban on what can be debated under the motion so that our debates could become more contemporary. The Government do not have a particular view on that; it is a matter for the House. If the House decides that it wants to change the way in which we debate PAC reports, I shall do my best—or whoever succeeds me in my post will do their best—to respond in a timely fashion. The hon. Gentleman asked about the following up of Treasury guidance. Such guidance takes a number of forms. A recent example is the ““Dear auditor”” letter which was sent to all Departments after I had been in correspondence with the hon. Member for Gainsborough about the follow-up to a PAC report in a certain non-departmental public body. It instructed Departments to follow up and publish in their annual reports what they are doing about the recommendations agreed in PAC reports. The NAO often alerts the Treasury to emerging problems in particular areas, and there is a great deal of constructive discussion and debate between them. We do not like anything to slip through our fingers, and we are trying to establish programmes that will ensure that no recommendations issued either to Departments or to other bodies slip through the net in future. Every Department has a team in the Treasury that has its ear to the ground and tries to keep an eye on things. It is obviously regrettable if something slips through the net, but we try to minimise that. My hon. Friend the Member for Thurrock (Andrew Mackinlay) made an extremely good contribution on landfill, and on the prospect of a new Thames barrier to mitigate flooding risks. He also spoke about the Thames Gateway in principle, as well as about his local shopping centre. He clearly has views on the way in which the gateway has been set up, but I cannot stray into them because they are not in my ministerial area. I will say, however, that major progress has been made in the development of the Thames Gateway. More than 42,000 new homes were built in the Gateway between 2001 and 2007. The number of jobs created in the Gateway has grown by 10 per cent. between 2001 and 2006, compared with an average 4 per cent. increase in England as a whole. The Government have never believed that a top-down centralised structure is right for the Gateway, which is an area 40 miles in length with a population of 1.5 million and dozens of different towns and communities. However, my hon. Friend has robust views on the matter and I am sure he will continue to express them to the appropriate Ministers. I undertake to write to the appropriate Minister about his retail park, which is clearly bugging him greatly; I would like to find out whether I can do anything to assist him in that. The hon. Member for Ludlow (Mr. Dunne) has during his parliamentary career been involved in some of the same Select Committees on which I have, as a Back-Bench Member, had the privilege to serve: the Treasury Committee and the Public Accounts Committee. He is clearly enjoying himself, and he made an extremely good speech on some of the reports he has been particularly involved in. I hope he continues to enjoy his membership of the Committee as much as I did. The hon. Gentleman made a point about hindsight and looking at things retrospectively—after the horse has bolted, so to speak. That is because the Committee looks at value-for-money issues. If the PAC wishes to change its remit, that is a matter for the House. The Committee would have to develop its views on that, and the House would then have to decide whether to agree to the change. I agree with the hon. Gentleman that it is important that accounting officers are questioned—my hon. Friend the Member for Great Grimsby made this point, too—as the Committee has never concerned itself with policy, but deals with value for money and efficiency. That is an extremely important part of its focus. The hon. Member for Putney (Justine Greening) was right to highlight the strengths of the Committee's cross-party structure and the holistic approach it takes, and the importance of the focus on value for money and efficiency savings, which are at the heart of its work. The Chairman, the hon. Member for Gainsborough, drew our attention to the tax credits system. Tax credits provide support for 6 million families and take-up is now at unprecedented levels. The system has helped lift 600,000 people out of poverty since 1998-99. Figures published in March 2008 show that in 2005-06 take-up of the child tax credit was 82 per cent. with more than 90 per cent. of allocated money being claimed. Importantly, for those on incomes of less than £10,000, take-up is now at 96 per cent. For lone parents, it is now up to 95 per cent. Furthermore, Her Majesty's Revenue and Customs has established the tax credits transformation programme to improve the services that families receive. That includes a new service that allows couples whose relationship has broken down to initiate a new single claim by making a single telephone call. We have also improved performance, so that far fewer overpayments are caused by processing or software error. Accuracy in processing and calculating awards has risen from 78.6 per cent. in 2003-04 to about 97 per cent. in 2006-07. HMRC has revised its code of practice on recovering overpayments, replacing the reasonable belief test with a clearer test that will set out customers' responsibilities for checking factual information. In effect, there is a contract of responsibility. For instance, the recipient is expected to check that the amount going into their bank account matches the amount in the award notice. As before, they will not be expected to check the calculation; that will be a relief to all Members in terms of our constituency surgery work. If there is an official error and customers meet their responsibilities, the overpayment should be written off. The change will mean a fairer balance of responsibilities between the customer and HMRC. The Government regret the amount of error and fraud. The clear intention is for them to be reduced. HMRC will set targets to reflect that intention during this year. Officials are working hard to publish at the earliest opportunity the Treasury minutes on tax credits that Members are awaiting. Although the delay is regrettable, I should add in mitigation that the record for meeting deadlines for such minutes is extremely good. Various hon. Members have mentioned the Government's efficiency programme. The Committee has, on several occasions, rightly focused on this ambitious programme and I welcome its support for what we are trying to achieve. I am, of course, aware of the Committee's concerns about the robustness of the efficiency gains identified by the Government. Hon. Members are of course right that the savings claimed need to be genuine and credible. However, we should not overlook the National Audit Office's view that"““projects across the public sector are making significant improvements to the efficiency of public services””." I hope that hon. Members on both sides of the House will welcome that view. Nor should we ignore the fact that the programme is the largest concerted and continuous efficiency drive embarked upon by any Government in modern times. By December last year, we had achieved some £23 billion of efficiency gains. Our target for the current comprehensive spending review period up to 2010-11 is to achieve another £30 billion of savings. We have already seen some 78,000 net reductions in staff numbers as well as 12,600 posts reallocated to the front line. We are incredibly proud of the dedication and professionalism shown by civil servants across the country who have accepted the message that the Government need to work smarter and faster to deliver public services. We are determined to seize opportunities to provide taxpayers with genuine value for money wherever possible. We are also on target to reach our target of relocating some 20,000 jobs from London and the south-east by 2010 and, by the end of last year, had already moved 15,700 posts to the rest of the United Kingdom. That good progress has strengthened local economies and enabled the civil service to tap into a broader pool of talented recruits from across our country. All nations and regions in the UK have benefited from these moves, with 3,275 posts moving to the north-west, 3,259 posts moving to Wales and 3,268 posts moving to Yorkshire and the Humber. Thirdly, I shall turn to financial accountability. Full and open financial transparency is an essential and defining characteristic of a modern parliamentary democracy. The PAC, supported by the NAO, continues to be at the heart of the scrutiny process in our democracy and its unstinting and challenging examination of the use of scarce public resources contributes to our story of accountability in the United Kingdom. The hon. Member for South Norfolk gave a dizzying list of PAC equivalents that he had managed to visit the world over on his travels, but pointed out that the UK version is still a world leader. However, Parliament and Government cannot afford to be complacent about financial scrutiny. This point was clearly recognised in the Liaison Committee's report, ““Parliament and Government Finance—Financial Scrutiny””, which was published just over three weeks ago, on 21 April, and which the Government welcome. We are particularly grateful for the Liaison Committee's support for what has become known as our alignment project, which the Prime Minister announced last July. The project aims to bring all the Government's publication of information about public spending into a common format. This comprises public spending plans, parliamentary estimates and published resource accounts. Implementation of the alignment project will make a significant contribution to greater transparency and accountability and will allow Parliament and the public to track more readily Government spending from planning and budgeting stages right through to actual out-turn. As a result, Parliament will enjoy greater financial control over departmental budgets and, at the same time, have clearer and better financial information on the efficacy of planned public spending. The PAC must share some of the credit for these reforms, as is evidenced in its welcome paper, ““Improving Financial Scrutiny””, published as far back as July 2006. Hon. Members will recall that my predecessor as Financial Secretary promised to work with Parliament in bringing about change in the public interest. The alignment project clearly demonstrates our commitment to this worthy ambition and the Government continue to look forward to working with Parliament to achieve our common goals. Turning from projects, I should like to reflect on the developments under way to modernise the NAO's governance structures—another matter referred to by the hon. Member for Gainsborough. Members have already welcomed the Public Accounts Commission's 15th report on the governance of the NAO. I should like to restate the Government's support for those reforms. We support the Public Accounts Commission's objective in establishing systems of governance and internal control at the NAO that are consistent with best practice but that do not fetter its ability to form completely independent judgments. The current governance arrangements for the NAO and the Comptroller and Auditor General give priority to independence at the expense of good governance. The Government believe that the Public Accounts Commission's report strikes the right balance between the Comptroller and Auditor General's independence and the governance expected of an organisation that operates in the 21st century, rather than perhaps the 18th or 19th centuries. The new governance arrangements will give the Comptroller and Auditor General and the NAO the authority that they need for the important work that they do and spur them to improved performance. As hon. Members will know, the Prime Minister agreed that such provisions would be included in the Constitutional Renewal Bill, which has now started its pre-legislative scrutiny under a Joint Committee. It is important that Parliament and the Government work in harmony towards our shared objectives. I understand the hon. Gentleman's enthusiasm for bringing about the agreed new governance arrangements at the NAO—a point that he made very powerfully in his speech today. However, the important thing is to settle on a robust governance structure and to ensure that it commands the public support that it must have for credibility. I should like to thank Tim Burr not only for agreeing to serve as the Comptroller and Auditor General until the reforms are completed and in place, but also for presiding over a seamless transition from the previous regime. That reflects his outstanding ability as a public servant. He is clearly demonstrating his ability to preside over the NAO in these times and to prepare it for the new governance arrangements. It has been a pleasure to listen to the debate today, and I congratulate all hon. Members on their contributions. Before I sit down, I should like to add my voice to those who have wished the outgoing Comptroller and Auditor General, Sir John Bourn, under whom I served two terms as a Back-Bench member of the Public Accounts Committee, a long and happy retirement.