Meg Hillier MP

Chair, Committee of Public Accounts

Annual Report 2015-16

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Protecting the Public’s Money

Annual Report by Meg Hillier MP,

Chair of the Public Accounts Committee (PAC)

2015-2016

Chair’s Foreword

Effective scrutiny will uncover problems and mismanagement but also identifies problems

early on in order to save money later.

The Public Accounts Committee is not just reactive but seeks to be proactive to challenge

waste and inefficiency. As a cross-party committee with members from four parties we need

to reach consensus to publish our reports. This consensus has been a hallmark of the

committee.

We measure departments not just on how effectively and efficiently they spend taxpayers’

money but on how well they deliver services for the citizens they serve.

The Department of Health is the standout area of concern. The finances do not stack up.

This was apparent in the trend of deficits increasing in hospital trust budgets for some years

before this year’s set of accounts which came with a hard hitting commentary by the

Comptroller and Auditor General.

The Department of Health is a frequent flyer – whatever the issue we examine, the

overriding concern is how the funding will meet demand. In simple terms: the maths does not

add up and whenever savings are mentioned the focus is on efficiencies which just won’t

deliver the necessary funding.

The Government’s devolution agenda and the vote to leave the EU herald major changes for

the way Government spends money, who is accountable and how the citizen auditor can

follow the pound. Transparency is more important, and in some areas less apparent, than

ever before.

We are also alert to those departments which are attempting to make their way through

major reforms or delivering challenging large scale projects. The Ministry of Justice is one

such department having embarked on major reform programmes across almost every aspect

of its work.

On tax we have built on the work of the previous committee and are seeking to forge

stronger European and international alliances. At the OECD1 last May, there was strong

1 As chair, I attended the High-level Meeting of the Parliamentary Group on Tax in association with the European Parliament Special Committee on Tax Rulings, OECD, Paris, 2- 3 May 2016.

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support to continue to promote greater transparency on tax and this is an agenda that I will

continue to pursue with strong support from the committee and across Parliament.

We are hosting an international tax conference this winter and plan to work more closely with

Congressmen and women and Senators in the United States over the next year.

Meg Hillier MP

Chair of the Public Accounts Committee

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Our findings this year

As a committee looking at all aspects of Government spending, across Whitehall and the

providers contracted in to deliver services we have a responsibility to look at recurrent

themes and problems not just individual programmes.

Time and time again we have raised concerns about the accountability for spending, the

impact of efficiency savings – cuts – on services and the lack of understanding of situation

on the ground when Governments form their policies.

NHS in Crisis

As a cross-party committee we are all acutely aware of the financial crisis facing the NHS.

Putting it starkly, the costs of the NHS are rising fast at the same time as efficiency savings

are being demanded. The future is unsustainable.

Trusts had a net deficit of £2.45 billion in 2015-16, a huge escalation from £843 million in

2014-15, which was already a severe decline from a £91 million deficit in 2013-14 and £592

million surplus in 2012-13.The figure below was published before the 2015-16 year end, but

illustrates the severity of the situation.2

2 HC Committee of Public Accounts, Sustainability and financial performance of acute hospital trusts, Thirtieth Report of Session 2015-16 HC 709, May 2016

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There is now wide acknowledgement that the 4 per cent annual efficiencies demanded in

2011 were unrealistic.3 The target damaged trusts’ financial position and deficits were

predictable. It is a sign of the fractured accountability in the NHS that no-one is ultimately

responsible for ensuring there is an accurate and balanced budget.

Inadequate workforce planning sits at the heart of the NHS’ budgetary pressures,

contributing significantly to trusts’ financial distress. Between 2012-13 and 2014-15, acute

trusts’ spending on temporary staff increased by 24 per cent. NHS Improvement estimates

that the predicted £4 billion expenditure by trusts on agency staff in 2015–16 could be £880

million lower if there were no excessive agency charges.4

Committee members and I accepted that the cost of agency staff is excessive, but we also

note that the use of agency staff in the NHS is not new, and the opportunity for agencies to

take advantage of staff shortages was predictable. Yet the Department, NHS England and

NHS Improvement are only recently making serious attempts to control agency spending.5

The bigger issue is the volume of agency staff rather than the rate of pay.

Further to this, for the last decade problems with recruiting and retaining GPs means there

are simply not enough to meet demand. Best estimates suggest that the number of

consultations has increased by an average of 3.5 per cent between 2004-5 and 2014-15, but

the number of GPs has only increased by 2 per cent.6 Good access to appointments with

GPs is not only important for patients’ health, but also to reduce the financial pressure on

other parts of the NHS.

Add to this the rising costs for NHS specialised services which currently accounts for around

14 per cent of NHS spending7, mental health services which accounts for 12 per cent8 and

the ambitious and important plans to achieve parity of service.

The Government refers again and again to the £10bn of funding they have committed to the

NHS as the answer. My worry is that this funding is viewed as a panacea but that in reality

this money will have been promised several times over.

For NHS staff working in these challenging times morale is suffering. Unless we address the

spiralling costs, the structural issues and ensure that public health is delivering on reducing

demand the NHS will continue to face impossible financial pressures.

3 HC Committee of Public Accounts, Sustainability and financial performance of acute hospital trusts, Thirtieth Report of

Session 2015-16 HC 709, May 2016 4 HC Committee of Public Accounts, Sustainability and financial performance of acute hospital trusts, Thirtieth Report of

Session 2015-16 HC 709, May 2016 5 HC Committee of Public Accounts, Sustainability and financial performance of acute hospital trusts, Thirtieth Report of Session 2015-16 HC 709, May 2016 6 HC Committee of Public Accounts, Access to General Practice in England, Twenty-eighth Report of the Session 2015-16, HC 673, March 2016 7 HC Committee of Public Accounts, NHS specialised services, Tenth Report of Session 2016-17 HC 387, July 2016 8 Comptroller and Auditor General, Mental health services: preparations for improving access, Session 2015-16, HC 492,

National Audit Office, April 2016

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Devolution – following the money

Major changes are afoot in the ways in which public services are delivered for millions of

people in England. The Government’s drive to devolve power to many of the regions of

England, including the city-regions of Liverpool and Greater Manchester which comprise

over five million people are significant changes in the landscape of service delivery. Proper

accountability mechanisms are vital as money and power is devolved to some of the English

regions, whether it’s Cornwall or the West Midlands. This is especially true because each of

the devolution deals will be unique, with differing degrees of devolution and size of budget.

These changes are designed to create all manner of opportunities for local communities and

to enable those with best local know how to create more responsive, efficient local services.

It is vital that the baby is not thrown out with the bathwater. Devolution must not mean that

transparency, accountability and the restless urge for greater value for money is lost in the

establishment of new structures and platforms.

More recently, the Government seems to have slowed down its impetus to push the

devolution agenda forward; but Mayoral elections are planned for 2017 and deals are being

pushed through locally. It is essential that the Government is clear in its strategy for

devolving greater powers whilst ensuring a clear line of sight of local spending. A pound

spent by an elected Mayor, clinical commissioning group or Local Enterprise Partnership

must be a pound that Parliament can trace.

The experience to date is not encouraging. All too often representatives of central

government departments who appear before the committee are unsure and unclear about

who is responsible for what expenditure within new structures such as City Deals, or arms-

length services such as the contracted-out assessments for disability payments. 9

It is clear that as the devolution deals develop, new models for accountability must be

developed alongside the structures for budgeting and delivering services.

For example, we must ensure departmental accountability system statements are refreshed

on an annual basis10 to reflect these more complex delivery chains and more diffused

centres of control.

It is also important that members of the public can act as a citizen auditor: this will require

Government to provide information in a user friendly format. This is an issue that also

concerns our sister committee, the Public Administration and Constitutional Affairs

Committee (PACAC), which is conducting a study into how Government information is

presented. Complicated documents, full of jargon and hidden on a website, are not

substitute for a clear outline of who is in charge of what and how they can be held to

account.

Many MPs have expressed their frustration to me that they cannot track down who is

responsible for aspects of the NHS in their local areas, for example. This is just not good

enough. We could lay the blame at the door of complex or diffuse structures but this is letting

9 HC Committee of Public Accounts, Accountability to Parliament for taxpayer money, Thirty-ninth Report of Session 2015-16 HC 723, May 2016 10 HC Committee of Public Accounts, Accountability to Parliament for taxpayer money, Thirty-ninth Report of Session 2015-

16 HC 723, May 2016

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Government of the hook. Whatever the structural arrangement, the taxpayer should be able

to see who is in charge at a glance. I look forward to the outcome of PACAC’s work.

The modern state is complex. It comprises a bewildering array of organisations, officials,

politicians, parliaments, boards, panels, committees and councils. Even the most diligent

student of constitutional affairs would have difficulty keeping up with the scope and pace of

change. For the normal citizen, focussed on the day-to-day matters of work and home, the

system remains strange, opaque and frustrating. In these circumstances, accountability is a

hard thing to achieve. Under devolution, it becomes even harder. So the committee will

continue to insist that as public money is spent by new layers of public officials in new

structures, value for money remains a guiding principle.

Transparency and accountability

The public demand ever-greater transparency of those who take the decisions, and spend

the money, on their behalf. No longer can public officials escape scrutiny of their actions.

The public has the right to know. Our system is much more open than it was a couple of

decades ago. The Freedom of Information Act (2000) ensures that public bodies publish

more information, and that citizens have the legal right to request information. The digital

revolution makes it easier to publish information in a form every citizen can read.

Yet our committee keeps on finding examples of official stone-walling and deliberate

confusion on the part of officialdom. Despite the policy drive towards greater transparency,

not everyone, it seems, has got the memo.

One issue we’ve grappled with this year is determining exactly who is responsible for

expenditure.

For example, I have a real concern about the disregard that some academies and academy

chains have for their accountability for taxpayers’ money. It is as if some in the sector

consider it an irritation to be asked about use of Government money. Yet the Comptroller

and Auditor General qualified the Department for Education’s Accounts again in 2014-15,

citing concerns over the Department’s financial statements and the complications arising

from consolidating the accounts of the large and increasing number of Academy trusts.11

There are concerning examples that we have highlighted to the Department time and again,

including the Durand Academy Trust, who the Committee said there was “an unacceptable

lack of clarity” over who owned assets held by the Trust.12 The Education Funding Agency

now believes that the Trust has failed to comply with the requirements of the Financial

11 Comptroller and Auditor General on the Department for Education’s 2014-15 financial statements, Session 2015-16, HC 46, April 2016 12 HC Committee of Public Accounts, School oversight and intervention, Thirty-second Report of Session 2014-15, HC 735, January 2015, page 3; HC Committee of Public Accounts, Letter from the Chair of the Committee of Public Accounts to Chris Wormald, Permanent Secretary at the Department for Education, ‘Education Funding Agency and Department for Education Financial Statements – recall’, 12 February 2015; HC Committee of Public Accounts, Department for Education: Managing the expansion of the Academies Programme, Forty-first Report of Session 2012-13, HC 787, April 2013, page 10; HC Committee of Public Accounts, Establishing free schools, Fifty-sixth Report of Session 2013-14, HC 941, May 2014, page 6.

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Notice to Improve, and the Secretary of State for Education has issued a provisional

intension to terminate funding amid serious concerns about governance and financial

management. 13

We are clear that just because Government outsources or devolves a responsibility it cannot

just wash its hands of accountability. Day to day responsibility may have shifted in some of

these cases but once a contract has been let, the relationship with Government does not

end. There needs to be continued scrutiny, and crucially there need to be the capabilities in

the civil service to monitor contracts as well as let them.

As the system develops under the new devolution settlement, and as new contractors are

brought into play, we are convinced that we will need to be even more robust in our scrutiny

and hold the right people to account. Departments and their outsourced services need to be

accountable. In too many instances we have seen a growing detachment by those spending

taxpayers money from any sense that they have a responsibility to be transparent about their

spending.

Too often in committee when we ask who is in charge of an issue we see panel members

look to each other in the hope someone steps forward. As chair, I can often see the

confusion and panic in their eyes. Surely by the time an issue is in front of the PAC civil

servants should be aware that they need to be clear about who is in charge of, and

accountable for, delivery of a particular service.

Progress towards greater accountability is more than an academic question. One of the

greatest failures of accountability in recent times has been the scandal of Kids Company.

Between 2005 and 2015, Kids Company received at least £37 million in public money,

alongside many more millions from public figures and institutions. As the scandal unfolded,

the public could scarcely believe their ears. The charity collapsed amidst stories of

envelopes of cash being distributed to queues of people, with little financial accountability. 14

Civil servants warned ministers that Kids Company’s finances were running into the buffers.

Yet ministers took the rare step of issuing a ‘ministerial direction’ to officials, instructing them

to continue bankrolling the organisation. Kids Company is a clear case of poor value for

money but where accountability arrangements kicked in too late, at great cost to the

taxpayer.15 Accounting Officers across government failed to stand up to ministers until the

bitter end.16

Report of Session 2012-13, HC 787, April 2013, page 10; HC Committee of Public Accounts, Establishing free schools, Fifty-sixth Report of Session 2013-14, HC 941, May 2014, page 6. 13 Available at www.gov.uk/government/uploads/system/uploads/attachment_data/file/559066/Notice_of_intention_to_terminate_to_Durand_Academy_Trust.pdf 14 HC Committee of Public Accounts, The Government’s funding of Kids Company, Eighth Report of Session 2015-16, HC

504, November 2015 15 HC Committee of Public Accounts, Accountability to Parliament for taxpayer money, Thirty-ninth Report of Session 2015-16 HC 723, May 2016 16 HC Committee of Public Accounts, The Government’s funding of Kids Company, Eighth Report of Session 2015-16, HC 504, November 20154

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Tax

As we contemplate scrutiny, transparency and accountability, we cannot ignore the role of

business leaders and international corporations. Private sector organisations are part of our

society, and should behave like good corporate citizens. Where possible, the leaders of such

organisations, taking decisions which affect millions of citizens, should also be held to

account by Parliament. As the public finances become ever more squeezed, and tough

decisions have to be taken, there is no space for companies who use complex structure to

aggressively avoid tax

We expect companies to pay their fair share of the taxes which fund our public services.

According to the HMRC, there is a gap between what we raise in tax and what tax is due of

around £34 billion.17 No company can expect to avoid its duties to wider society without

genuine anger from the public. This is true, not only in the UK, but around the world. The

PAC has forged links with our EU counterparts on Public Accounts Committees, other

members of European national Parliaments and members of the European Parliament to

press our respective ministers to act on tax transparency.

Members of the Public Accounts Committee backed an amendment to the Finance Bill

submitted by a Committee member, Caroline Flint MP, to enable HM Treasury to introduce

country by country reporting of multinational businesses’ profits and the tax that they pay in

each nation. After gaining cross party support, the amendment was unanimously adopted.

I look forward to hosting an international tax conference this December as an opportunity to

push for wider agreement on country by country reporting and greater transparency of big

businesses’ profits and tax. Companies must understand that they cannot get away with

depriving nations of the tax they morally owe.

At home the committee continues to hold HMRC to account for the poor level of customer

service it has provided to British taxpayers. More recently we acknowledged the

improvements HMRC have made, but the reality is every time we’ve seen better service we

see a slip backwards.

When we’ve seen a consistent level of good customer service, reflecting what taxpayers

want rather than what HMRC assumes they want we’ll be convinced that improvements are

bedded in.

The user at the heart of policy

As constituency MPs we are robust in challenging senior civil servants about the impact their

departments’ projects and policies have on our constituents. I want those at the top who are

delivering Government commitments to fully understand the consequences for the end user

and to make decisions with this at the forefront of their planning.

Housing is a huge challenge across the country. As an MP who hears first-hand the heart-

breaking stories of my constituents’ struggles to find affordable, secure homes for their

17 HM Revenue and Customs Annual Report and Accounts 2015-16, HC 338, July 2016

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families I have been appalled by some of the poor working from Government on this critical

area.

One of our most memorable hearings was also one of my first as chair in July last year. We

were examining the effectiveness of the Government’s policy of releasing public land for

housebuilding. The pledges had been bold but the audit of achievements had been

devastating: the policy had intended to release public land to build as many as 100,000 new

homes and support the creation of 25,000 jobs by 2015.18

Our main witness was the Permanent Secretary, in post for only a few weeks at the

Department for Communities and Local Government (DGLC). When asked about the policy,

she said it had been a ‘very successful programme for the DCLG and other government

departments involved in the last Parliament’.19

In reality, the Department had not monitored either the number of houses built or under

construction, nor was it able to say how many jobs had been created. It also did not record

sales proceeds, or the commercial terms agreed for the land disposals and was therefore

unable to assess value for money for the taxpayer.20

This is a stark example of a policy being, on paper, delivered but with no thought about how

this would truly benefit citizens. The department viewed this as huge success but for those

waiting for housing this is far from that. The department itself acknowledges that it may take

20 years for some of the homes to be built.

We recently called the Department back to the Committee to update us of their progress; I

was pleased to see that in response to our scrutiny they have now put in place monitoring

arrangements included to track the actual number of houses built, but there is still a long way

to go.

We also carried out a pre-scrutiny of Ministers’ plans to extend the ‘right to buy’ for housing

association tenants. Despite the implications and complexity of this policy, the Department

has not published a detailed impact assessment of the policy and the Department could only

offer the committee vague assurances as to how this policy will be funded. We as a

committee were also concerned that whether the new homes funded by this policy will be

genuine replacements for those sold and whether there will be sufficient controls to prevent

abuse of the scheme. These are all details for later, it would seem.21

The government’s reaction to the widespread flooding in recent years has also had a

devastating impact on the lives of individuals. The PAC, alongside our sister committee the

Environmental Audit Committee, warned of the dangers of neglecting the upkeep of existing

flood defences whilst investing in new ones. When flooding occurred, the emergency

services reacted swiftly. But the government’s agencies did not react well in the aftermath,

18 Comptroller and Auditor General, Disposal of Public land for new homes, Session 2015-16, HC 87, National Audit Office, June 2015 19 HC Committee of Public Accounts, Disposal of public land for new homes, Second Report of Session 2015-16, HC 289, September 2015, Q1 20 HC Committee of Public Accounts, Disposal of public land for new homes, Second Report of Session 2015-16, HC 289, September 2015 21 HC Committee of Public Accounts, Extending the Right to buy to housing association tenants, Thirty-eighth Report of Session 2015-16, HC 880, April 2016

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with many citizens left financially ruined by flooding. The impact is felt by those unaffected

directly by flooding.

Payment delays by the Rural Payments Agency, well documented by the committee over

several years, led to farmers delaying payments to their suppliers and sub-contractors22,

which put pressure on small businesses.

This is not just an issue for senior civil servants and agencies. This kind of failure of listening

to, understanding or engaging with the ‘end users’ of policy initiatives can translate into a

‘user-blind’ attitude amongst the contractors paid to deliver huge chunks of our public

services.

In spring this year the PAC found that there was an unacceptable level of local and regional

variation in the performance of companies contracted by the Department for Work &

Pensions to carry out health and disability assessments23, a central component of the

government’s welfare reform programme. MIND, Citizens Advice and the Disability Benefits

Consortium all told us that the resulting delays and problems with the assessment process

creates avoidable anxiety for claimants, particularly those with mental health conditions.24

Another theme running through many of our sessions is the levels of variation in public

services that users are forced to contend with. For example, access to GP surgeries is too

dependent on where patients live, mainly because of variations in staffing levels.25 The most

deprived areas had on average nearly five fewer GPs and nurses per 100,000 people than

the least deprived areas.26 This creates one of the main drivers of the ‘inverse care law’,

whereby the people with the greatest health needs have access to the worst services. Even

after seventy years of the NHS, this fundamental inequality is still with us. Similar inequities

between people with differing postcodes can be seen across the public services.

Lastly, we have heard in many of our hearings that the citizen feels that they do not have the

right information to adequately navigate the system and secure the right services. Often it is

not a lack of information that is the barrier, but the opposite: an overload of information,

presented online without filter or focus.

The move to make more data available is mostly a blessing, but it can also be a curse for

those trying to find out specific pieces of information amidst a vast sea of data. There is also

the question of fairness. Those with specific research skills may find it easier to access

information than others. Those with access to technology in their homes including high-

speed broadband may find it more convenient than those without access to technology. This

creates an imbalance in our society between the information haves and have-nots.

22 HC Committee of Public Accounts, The Common Agricultural Policy Delivery Programme, Twenty-sixth Report of Session 2015-16, HC 642, March 2016 23 HC Committee of Public Accounts, Contracted out health and disability assessments, Thirty-third Report of Session 2015-16, HC 727, March 2016 24 HC Committee of Public Accounts, Contracted out health and disability assessments, Thirty-third Report of Session 2015-16, HC 727, March 2016 25 HC Committee of Public Accounts, Access to General Practice in England, Twenty-eighth Report of Session 2015-16 HC 673, March 2016 26 HC Committee of Public Accounts, Access to General Practice in England, Twenty-eighth Report of Session 2015-16 HC 673, March 2016

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The thread running through this theme of protecting the users of services is simple to detect:

where services are designed with the user, not the supplier in mind, and where services can

be designed with the full engagement of the end users, then the services tend to be more

efficient, less likely to fail, and more likely to present value for money. When public policy

experts ignore the public’s wishes and experiences, the resulting policy can cost the

taxpayer more.

Cost shunting

‘Joined-up government’ has been the quest of politicians for many years, but remains

elusive. Our system seems impervious to attempts to break down the walls of the silos from

which public services emanate. One aspect of this ‘silo-isation’ between public services is

observable when it comes to ‘cost shunting’.

Departments look to their own internal accounts, and their own bottom lines, without paying

due regard to the impact of their actions on other parts of the public service. The result is

cost-shunting: whereby savings in one part of the public sector are passed on as costs in

another part of the public sector. One person’s savings becomes another person’s increased

costs.

We found evidence of this on a visit last year by myself and PAC member Kevin Foster MP.

Devon and Cornwall police told us that they had had to place a 16 year old with a mental

health problem in a police cell because there were only two teenage mental health beds

available over the weekend. As the police pledged, rightly, to reduce the number of mentally-

ill young people treated in this way, the impact was felt in the local A&E departments in the

NHS.

The Plymouth Herald in February 2016 reported ‘Police and health bosses in “turf war” over

who should treat Plymouth's mentally ill’. The Devon and Cornwall case hit the headlines but

it highlights a much more widespread problem whereby the scarcity of adequate mental

health facilities for children and adolescents results in mentally-ill young people being locked

up in cells.

In 2013-14, just 22 per cent of the 7.3 million emergency and priority incidences the police

responded to were crime-related. The Home Office told us it was understandably worried

policing will become the ‘social service of first resort’ in areas such as mental health because

other services are not available.27

This is also typified by the criminal justice system, where the individual parts of the system

have strong incentives to work in ways that shunt costs to other parts of the system.28

As Stephen Phillips and I put it to Alison Saunders, the Director of Public Prosecutions in the

Crown Prosecution Service (CPS)29, mistakes made by CPS in preparing cases or briefing

27 HC Committee of Public Accounts, Financial sustainability of police forces in England and Wales, First Report of Session 2015-16, HC 288, September 2015 28 Comptroller and Auditor General, Efficiency in the criminal justice system, Session 2015-16, HC 852, National Audit Office, March 2016 29 Comptroller and Auditor General, Efficiency in the criminal justice system, Session 2015-16, HC 852, National Audit Office, March 2016, Q79, Q85, Q88

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witnesses means the Ministry of Justice and the Courts and Tribunals Service have to foot

the bill.

The illustration below demonstrates how cost-shunting occurs within the criminal justice

system:

It is only too easy to get caught up in processes and miss the bigger picture: inefficiencies

transmitted along the criminal justice system not only push up costs, but directly effects

victims and witnesses. A victim of crime in North Wales has a 70 per cent chance that the

trial will go ahead at Crown Court on the day it is scheduled. That drops to just a 20 per cent

chance in Greater Manchester.30

30 Comptroller and Auditor General, Efficiency in the criminal justice system, Session 2015-16, HC 852, National Audit

Office, March 2016

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Another example of cost-shunting comes from the Government’s approach to further

education (FE). I have serious concerns about the sustainability of our further education

colleges. These are funded by the taxpayer, and most are in buildings which have been built

and maintained by the public purse. There is a danger that some FE colleges will fail, not

only leaving students without facilities, but also large empty buildings in our town and city

centres. There may be savings in the short-term, but the costs of not having a workforce with

the right mix of skills and qualifications are far greater.

The bodies responsible for funding and oversight have been slow to address the problem

and have taken decisions without understanding the cumulative impact it may have on

colleges.31 The Skills Funding Agency (SFA) deemed 34 colleges to be financially

‘inadequate’ in the 2014/15 academic year.

The SFA’s latest estimates, produced in May 2015, suggest that there could be around 70

colleges in this position by the end of 2015/16.32 Oversight arrangements are complex,

sometimes overlapping, and too focused on intervening when financial problems have

already become serious rather than helping to prevent them in the first place.33 While the

introduction of the Further Education Commissioner has been a positive development,

oversight of the sector is overly complex, leading to confusion over who is responsible for

intervening and in what circumstances.34

The Department for Education (DfE), continuing an initiative started by the Department for

Business, Innovation and Skills (BIS), have pressed forward with area based reviews of post

16 education. BIS saw the reviews as a fix all solution to the problems in the sector, but the

reviews do not cover all types of provider and it is not clear how they will deliver a robust and

financially-sustainable FE sector.35

To tackle cost-shunting requires a cultural shift inside the system, so that no-one believes

the universe begins and ends with the walls of his or her office. Each public official must see

their actions as part of a much bigger system. For policy-makers, it means a far more

comprehensive process of policy development, taking into account the possibility of

unintended consequences. This requires far more pre-legislative scrutiny, and more robust

systems of risk analysis and impact assessment.

A commercial civil service

From large scale IT projects to military training contracts we are seeing an issue with the

changing nature of skills required in a modern day civil service.

31 HC Committee of Public Accounts, Overseeing financial sustainability in further education colleges, Thirteenth Report of

Session 2015-16, HC 414, December 2015 32 HC Committee of Public Accounts, Overseeing financial sustainability in further education colleges, Thirteenth Report of Session 2015-16, HC 414, December 2015 33 HC Committee of Public Accounts, Overseeing financial sustainability in further education colleges, Thirteenth Report of Session 2015-16, HC 414, December 2015 34 HC Committee of Public Accounts, Overseeing financial sustainability in further education colleges, Thirteenth Report of Session 2015-16, HC 414, December 2015 35 HC Committee of Public Accounts, Overseeing financial sustainability in further education colleges, Thirteenth Report of Session 2015-16, HC 414, December 2015

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With services outsourced and providers bought in we have highlighted the vital need for

public officials to have expertise in contract management, project planning, risk assessment,

budgeting and accountancy. We have shown that a civil service comprising generalists on

the old Yes Minister model is entirely inadequate to modern needs. The establishment of the

Major Projects Authority (now the Infrastructure and Projects Authority) and the Major

Projects Academy, which is providing world-class skills training for senior civil servants to

manage large projects, is entirely welcome.

Recent debacles concerning the delivery of IT systems prove the need for more specialist

expertise inside the civil service and public bodies. Surrey Police’s SIREN project was

scrapped after costing £15 million.36 Universal Credit is costing about five times the budget

that was announced.37 The NHS Connecting for Health project was budgeted at £2.3 billion,

and ended up costing us all £12 billion before being largely abandoned. This remains one of

the most costly failed projects in recent history.

What irks the public most about these failures apart from the waste of public money is the

lack of accountability and culpability of those responsible. The committee will continue to

scrutinise major IT projects, or IT reliant policies such as the major reforms to the criminal

justice system.

Indeed, as a department the Ministry of Justice (MoJ) is planning the greatest number of

changes of any Government department. There is barely an area of policy in the department

which is left untouched – prison estate, rehabilitation, court buildings and all on top of huge

changes to probation, court interpreters and legal aid. I can confidently predict the

committee will be seeing a great deal of the Ministry of Justice in coming months.

Conclusions

The Public Accounts Committee remains one of the most important platforms for

Parliament’s role in holding the executive to account. Our work hits the headlines when a

major scandal, such as an NHS IT fiasco, is unearthed in all its gory detail. From time to time

the discomfiture of a squirming public official becomes a social media phenomenon, shared

across Twitter and YouTube. But the bulk of our work is patient, painstaking and forensic. It

is non-sensationalist, yet vital to the good stewardship of our country’s finances.

In these challenging times of squeezed budgets and Brexit, the committee will continue to

look back at Government spending to ensure that where funds have been misspent, lessons

are learnt. I also want to undertake even more pre-scrutiny of Government plans and as

chair I will continue to call for departments to be open about their future projects – Hinkley,

Right to Buy, HS2 - and to understand that the committee will pursue their concerns

doggedly.

36 http://www.surrey-pcc.gov.uk/wp-content/uploads/2014/06/Public-QA-PDF1.pdf 37 HC Committee of Public Accounts, Universal Credit – progress report, Nineteenth Report of Session 2015-16, HC 601, February 2016; HC Committee of Public Accounts, Universal Credit – progress update, Forty-second report of Session 2014-15, HC 810, February 2015

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Most of all, I hope, we will continue to raise the questions the public would be most likely to

ask, on the issues that matter the most.