Queen of select committees: the role of the Public Accounts Committee
PAC has a history of carpeting witnesses and grabbing headlines, but how does the House of Commons deploy its weight more effectively?
I wrote recently of the role of select committees in the House of Commons, looking particularly at the profile of chairs and the resources behind them. A former colleague, complimenting what I’d written, coughed politely and noted that I hadn’t mentioned the Public Accounts Committee (PAC), one of the strongest and most influential committees of the House but one which operates in a different way from any other.
PAC is a very old institution. It was formed by resolution of the House in 1862 at the instigation of the then-Chancellor of the Exchequer, William Gladstone, and its explicit purpose was “for the examination of the Accounts showing the appropriation of sums granted by Parliament to meet the Public Expenditure.” This is one of the simplest remits a committee could have. It scrutinises how the government spends its money, and therefore can examine more or less any area of policy it chooses.
A few years later, in 1866, the Exchequer and Audit Departments Act gave PAC the job of overseeing the work of the Comptroller and Auditor-General, the senior independent official who, in his twin roles, authorises the issue of money to government departments and examines departmental accounts. The C&AG is an officer of the House of Commons, appointed by Letters Patent on the recommendation of the Prime Minister and with the agreement of the chair of PAC. The current C&AG is Gareth Davies, who took on the job in June 2019 after a career with the Audit Commission and then at Mazars, the global audit and accounting firm. He serves at His Majesty’s pleasure but his predecessor, Amyas Morse, was at the helm for 10 years.
The C&AG is supported by, and oversees, the National Audit Office (NAO). It grew out of the old Exchequer and Audit Department in 1983 and is based in Imperial Airways’ former Empire Terminal on Buckingham Palace Road, an extraordinary Art Deco building, with another major hub in Newcastle-upon-Tyne. With nearly 800 staff, it essentially audits government spending, looking at regularity, propriety and value for money, and has separate directorates for each government department.
All of this activity flows upwards to support the political work of PAC. The committee has a small secretariat by the standards of Commons select committees, but can draw on the resources of the NAO, and selects for particular attention issues identified by the NAO as of importance. A realist will recognise that these are more often matters where something has gone wrong than where money has been spent particularly prudently and effectively.
The chair of PAC is always a member of the official opposition party, sometimes a former Treasury minister. Previous chairs include David Davis, Harold Wilson and Walter Elliot, all of whom went on to hold cabinet office, and the last chair, Dame Margaret Hodge, won considerable publicity for her tenacious and determined cross-examination of witnesses. The committee, and the House more widely, recognises the media power it wields, and it regularly tops the rankings of select committees for publicity.
Although auditing and value for money can seem rather dry subjects, the political elbows of PAC can highlight problems in government policy in an accessible way. After all, taxpayers care how their money is spent, and hate the idea of waste or profligate expenditure. In 2013, it looked at the ill-fated NHS National Programme for IT, a massive and ambitious plan for putting clinical records online which dated back to 2003. NPfIT was the thought to be the world’s largest civilian information technology project and its head, Richard Granger, brought in from the private sector where he had worked for Andersen and Deloitte, was at one point the highest-paid official in the civil service, out-earning the Cabinet Secretary and his own permanent secretary.
(Granger did not last long: by 2007 he had decided to return to the private sector, and in 2008 he joined KPMG as a partner.)
NPfIT had always been a hostage to fortune, its scope mushrooming in a way stereotypical of bureaucracies. The Commons Health Committee was scoping an inquiry into it when I left in 2006, but the more we examined the idea, the bigger and more unmanageable it became. Perhaps the committee should have pressed ahead; by 2013, PAC described it as one of the “worst and most expensive contracting fiascos in the history of the public sector”. It had been effectively disbanded in 2011, its objectives simply unachievable, and the Department of Health estimated that it had cost £9.8 billion (though some argued that was a low guess).
This is the sort of thing at which PAC is good. The NAO produces thorough and diligent work, but its reports are not required reading outside a small specialist circle: a committee of MPs highlighting the waste of nearly £10 billion of taxpayers’ money for little to no return, however, caught the eye of the media, and its members were savvy enough to exploit that. Richard Bacon, the senior Conservative on PAC at the time and its reliable attack dog, made no secret of the horror with which they regarded the project, eased, perhaps, by the knowledge that its genesis was under the previous Labour government.
I think I know what some of you are thinking. If we’ve had the NAO for nearly 40 years, and a Committee of Public Accounts for 160, why isn’t our government expenditure a model for probity and prudence worldwide? Why do departments still make expensive mistakes? Why, for example, had the Ministry of Defence recently “suspended” the Ajax armoured fighting vehicle programme, which has its origins in the 1990s, at a point when 12 test vehicles have been delivered (and are encountering a vast array of challenges) at a cost of £3.2 billion?
(I make no apologies for choosing Ajax as an example of failure. It is the worst example of the MoD incompetence in procurement, there has been no individual responsibility taken by anyone, ministers “cannot be 100% certain that [the programme] can be achieved” and PAC has indeed looked at the disaster, identifying a “litany of failures” and recommending that Ajax is either scrapped or the problems addressed with the utmost urgency. As of September 2022, none of these hard choices has been made and the outcome of a legal examination within the MoD is yet to appear.)
There are a number of explanations, beyond the nihilistic but not unreasonable reflection that such is the nature of human fallibility. One is the disconnect between short-term public interest and long-term scrutiny which is a bedevilling feature of British politics, and perhaps more broadly. PAC can provide gripping theatre by publicly shredding a senior official or even a minister; the media will latch on to this drama; attention-grabbing headlines will fly hither and thither, with sums of money which are almost unimaginable; but eventually, the caravan will move on, the furore will die down and, regrettably, the historical record suggests that there will not even be a symbolic scalp handed over to the inquisitors in contrition.
I do not suggest that PAC is not doing its job. Indeed, in the short term, it is one of the most effective committees of Parliament, though some other chairs and staff will sniff at its publicity-seeking vulgarity. Again and again, PAC has drawn attention to appalling failures in government, whether it be the decommissioning of Sellafield nuclear processing plant (£67.5 billion by 2013), the NPfIT mentioned above or the catastrophe of the Rural Payments Agency’s delivery of financial support in 2006 (it was late, inefficient and hugely over budget). The committee’s chair and members know that they have the solid research and analysis of the NAO behind them, and a public culture broadly hostile to poorly managed government spending.
I also assert quite confidently that the cooperation between PAC and the NAO is excellent: the staff of the committee are extremely able professionals, and the NAO’s interface is run very deftly and with sharp political antennae. The current chair of PAC, Dame Meg Hillier (Lab, Hackney South and Shoreditch), may not light up the political skies but she is experienced and thorough, and has sharpened her tone and communication in her seven years in post. The House of Commons Service has recognised that hers is a significant and demanding position, and has gradually increased the resources available to her.
So what’s the problem? The wide remit of PAC—essentially all government spending—provides a tempting but overwhelming buffet of subjects to pursue, and it cannot therefore always keep its teeth sunk into something, no matter how much meat is on the bone. Nor is there an obvious partner to whom issues could be passed: it is the duty of each departmental select committee, to quote a Liaison Committee report, “To examine the expenditure plans, outturn and performance of the department and its arm’s length bodies, and the relationships between spending and delivery of outcomes.”
However, this duty, while vital, is only one of 10 “core tasks” assigned to select committees, and it can be one of the least rewarding. Many committees will look at the department’s annual report and accounts, and may grill the permanent secretary on issues arising from these documents, but it is a dry business often requiring specialist support (the NAO supplies several secondees to committees and to the House of Commons Scrutiny Unit), and may be an obvious victim when schedules are squeezed. And many MPs—one cannot judge them too harshly for this—are more comfortable dealing with the conceptual framework of policy and the concrete results of delivery rather than the financial details which underpin them.
It is a regrettable fact that the House has in some senses delegated financial scrutiny to PAC and to the departmental select committees. Those who have forgotten or never knew their early modern history can overlook the fact that a major role of the House is to authorise the collection of taxes and the spending of resources. The Commons must pass supply and appropriation bills which allow the government to access the Consolidated Fund (effectively its bank account), and can specify the purposes for which this money is spent. There are two of these bills each year, one on the Main Estimates and one on the Supplementary Estimates and Votes on Account. And these are exclusively the purview of the Commons. The Lords passes the bills without debate, an indication that it has long surrendered control of financial issues to the elected chamber.
You might think that this would be a red-letter day in the House of Commons calendar. Here is the legislature, as a body, sitting in judgement on the spending plans of the executive. This is surely what struggles like the Civil War were fought for, with echoes of the Amicable Grant and Ship Money, and we all know the powers of those who pay the piper, or control the purse strings. In modern procedure, though, it does not work out like that. There are two “Estimates days” set aside for the Main Estimates and one for the Supplementary Estimates, but these are not used for detailed scrutiny of the legislation; instead, the Backbench Business Committee will consider and approve bids for subjects for debate. The supply legislation itself is passed virtually on the nod.
Analysis of the House’s financial scrutiny powers is for another day (and the real expert is Colin Lee, currently Managing Director of the Select Committee Team but a former Clerk of Supply). But it is worth noting this weakness, as it emphasises the burden which falls to PAC, and that is, of course, a retrospective burden, scrutinising expenditure which has already been made, rather than an opportunity to influence future spending.
It was the legendary political historian Professor Peter Hennessy (Lord Hennessy of Nympsfield) who dubbed PAC “the queen of select committees”. Many chairs of other committees would bridle at this but it is, undoubtedly, one of the House’s strongest scrutiny weapons. Its weaknesses are those of the House itself and a wider political culture, of a short attention span and limited powers to get upstream of government policy. Its chair holds a powerful position, and in general its members are engaged and aware of their importance and capabilities. (That cannot, unfortunately, be said for all members of all select committees.)
We live in a system with weak financial scrutiny of the executive. To change that would require a massive and lengthy effort of reform by a government so selfless it was willing to make its own life harder. Those are tall orders. It is important, then, to recognise the role which PAC plays, but also its limitations. Perhaps officials in the House could turn their enormous collective intelligence and imagination to ways in which the committee could make its work more consistent and joined-up, better able to pursue issues over a longer time than currently. I pass this over to my former colleagues for reflection.