Parliamentary Buildings (Restoration and Renewal) Bill (First sitting)

Debate between Meg Hillier and Mark Prisk

Committee Debate: 1st sitting: House of Commons
Tuesday 4th June 2019 Public Bill Committees

[Meg Hillier]

I think we will hear from the ceramics sector in a moment. There are an awful lot of opportunities for our local businesses. I am sure that local authorities and business organisations in different areas will be champing at the bit to prove that their organisations can do it.

My right hon. Friend the Member for Alyn and Deeside made a valid point about contracting. The Government have moved on with things like G-Cloud to make it easier for smaller businesses to contract, but the rules can be challenging. I would not want to prescribe anything in the Bill because I think it is challenging to prescribe in law, but I hope that the Sponsor Body—I will put it on the record, and I hope it will read or hear this—makes sure that the contracts are broken down into the right size. Often, for those procuring large contracts, it is simpler to secure one big one and to let the subcontractors to the big contract take up the work. The danger with that is that they are not subcontractors.

One of the things that we need to have in place is an audit system. With the Olympics, after the event no proper audit was done of the jobs that were supposed to be created locally. The National Audit Office could have direct access to those companies, which would be a great way forward, or the Sponsor Body could commission its own audit. As we have a National Audit Office serving Parliament, however, I think it would be an excellent place to do that. The outgoing Comptroller and Auditor General and his team were keen on that. I have not had the chance to speak to the new incumbent, who started his job—very nobly—on Saturday. It is early days for him, but I am hopeful that the NAO team is still willing to take that on, as I had that reassurance from them.

Unless we measure and monitor what is happening, games can be played—people and businesses can lose out. This measure does not need to cost more if the preparatory work is done, so that such businesses can apply. Think of the skills that this place could use—stonemasons, wood carvers and a huge range of other skills and niche businesses—some of which we might not have in the UK, but if we start planning now and thinking about what we might be doing, some businesses could adapt their production processes to provide some of the things that this House needs. The prospect of a big contract might make it worth their while to take that risk. Of course it is a risk—we cannot just give those companies a contract; they will still have to bid for it—but if they are willing to do that, we should give them every opportunity.

That yearly audit is vital, and the benefits will not happen otherwise. If the Sponsor Body goes down the route of having subcontractors, we have to have a way to ensure that the big companies really subcontract to specialists, not just to subcontractors they already know and work with, but opening things up more widely. The risk is that that will not happen, but I do not want to prescribe it in law because it is challenging.

If the amendment is adopted it would require the Sponsor Body to think about big project integration. Often with big projects—most recently with Crossrail—the challenge is to integrate the smaller contracts at the time just before delivery. Some of the bits of work will have to finish at around the same time, or in sequential order, to work properly, so the Sponsor Body would be required to think that through carefully in the early days. That is why I would like to get this in the Bill, so that the body has no excuse—in law, it would know what it has to do.

[Mr Prisk]

I envisage that this will be a digital project and that building the information modelling will be at the heart of the way in which it is done. That naturally undertakes what the hon. Lady just described. Is that her expectation of how this contract will be delivered?

[Meg Hillier]

The hon. Gentleman makes an important point. That is one of the things that could happen, but as we have seen—I had the privilege of visiting Crossrail a couple of times, most recently in the past few weeks—sometimes nothing beats having eyes on the ground, seeing what is happening and checking with contractors what is happening. That is a skill of project management, which of course uses digital tools to deliver. Who knows, but let us hope that a British business delivers such tools and will be able to help the Sponsor Body and win such a project. A good project manager will still be needed on the ground to ensure that all the smaller businesses work together.

This measure does not need to cost more money; it just needs to be planned from the beginning. The process cannot be added at the end, suddenly, when someone says, “Oh, we have had a lot of noise from MPs who are concerned that their companies have not got the business.” It must be planned from the beginning. The Minister is very committed to his region, and he was a great advocate for Devon when he served nobly on the Public Accounts Committee, so I am sure that he is with us in spirit. I hope that the Government are willing to accept the amendment. I will accept a change of wording if they feel that the drafting is amiss, although I had good advice from the Clerks.

--- Later in debate ---

[Mr Prisk]

The right hon. Gentleman speaks about one of my particular frustrations with all public buildings, which is that we throw money at the capital cost, never put in money for the long-term maintenance, and wonder why the damned thing costs as much as it does—if “damned” is an acceptable word, Sir Gary.

I draw the Committee’s attention to my two concerns about the amendment. First, as worthy as the amendment undoubtedly is, as for any condition that we set, there will be some form of cost, whether in expression of time or in process. In this instance, I happen to think that we should establish that cost at the start. The hon. Member for Hackney South and Shoreditch is absolutely right to say that if one does that at the beginning and then has the discipline not to tinker and meddle thereafter, one can avoid the spiralling costs of other public projects.

Secondly, there is the nature of the audit envisaged in the amendment, which the hon. Lady addressed to a degree. Going by what she said, she does not wish to have a strict audit in the sense of trying to have a rigid quota, in which one part of the country must have a certain percentage and so on.

[Meg Hillier]

indicated assent.

Parliamentary Buildings (Restoration and Renewal) Bill (Second sitting)

Debate between Meg Hillier and Mark Prisk

Committee Debate: 2nd sitting: House of Commons
Tuesday 4th June 2019 Public Bill Committees

[Meg Hillier]

I beg to move amendment 15, in schedule 2, page 22, line 6, at end insert—

“(10) The Comptroller and Auditor General must have access rights to allow him to examine the preparedness of the Sponsor Body and the Delivery Authority to undertake the Parliamentary building works.

(11) In exercising the power in sub-paragraph (10), the Comptroller and Auditor General must have particular regard to procurement practices and the need to ensure that small businesses have sufficient opportunity to participate in the Parliamentary building works.”

One might expect that I would want to see good auditing of this project, not only because I chair the Public Accounts Committee but because, like all of us, I represent taxpayers, and it will be taxpayers who ultimately fund it. It is also important that the proper audit arrangements are in place to make sure that everybody working on the project is aware that the eyes of the Comptroller and Auditor General and the National Audit Office are on them—that is what I am proposing as the best approach to audit. That approach also brings in parliamentary scrutiny, because under the arrangements of Parliament, the National Audit Office’s reports can automatically be taken up by the Public Accounts Committee. Of course, other Committees can look at the project too, but it means that we would have numbers.

For those who have not been on the Public Accounts Committee, I will set out the process. When the National Audit Office produces a report, the figures are agreed with the audited body. That enables the members of the Committee to focus on the detail rather than arguing about the numbers. The report is an accurate record of what the costs are, but the National Audit Office also looks more widely at the efficiency and effectiveness of programmes, including how business cases are set up and so on. It is really important that we build that in from the outset. A new Comptroller and Auditor General took office on Saturday 1 June; I have not had a chance to discuss this with him in detail, but I have been in touch with the National Audit Office.

In some respects it is possible to do this without an amendment to the Bill, but it is still discretionary. Until this Bill is passed, under section 6 of the National Audit Act 1983, the CAG may be appointed an auditor of a body to which he has not been appointed by statute

“by virtue of any agreement made, whether before or after the passing of this Act, between that authority or body and a Minister of the Crown.”

An appropriately worded agreement would trigger the CAG’s economy, efficiency and effectiveness powers, but of course, we do not know if we can get that. While I would hope the Sponsor Body would embrace that, it would be helpful and not detrimental in any respect to have it in the Bill, so that it is very clear. Of course, in so far as is possible before the Act is passed, the CAG can enter into an agreement that would hopefully mirror his statutory rights.

I am very concerned, though, that we have this in statute—in the law—to embed the National Audit Office’s embrace of this role at an early stage. My amendment proposes that that happens with both the Sponsor Body and the Delivery Authority, and that it starts now, so that the National Audit Office is not looking at this project in 15 years’ time, perhaps when something has gone wrong; we build it in from day one. It would ultimately be for the Comptroller and Auditor General to decide how often he looks at this, but I would suggest an annual approach. Obviously, the National Audit Office would annually look at the accounts, if that were agreed, and would have the ability to produce individual reports on aspects of the project. That would be within the properly independent powers of the Comptroller and Auditor General. My amendment does not directly prescribe what the CAG does, because that would be wrong: he is an independent person, representative of this House and of the tax-paying public. However, it is important to set this out in statute.

There is another element that we may want to consider, and I would be interested to hear the Minister’s views on it. Currently, it is not easy for the Comptroller and Auditor General and the National Audit Office to access a company’s records. They can look at a contract between Government and another body in the private sector or wherever, and will then be able to see certain elements of what is going on with that private company, but the NAO does not have access rights to those companies’ accounts. For the purpose of value-for-money examinations, it might be helpful for the CAG to have unequivocal access to relevant information that contractors, subcontractors and grant recipients of the Sponsor Body and Delivery Authority have. I have not put that in the amendment, because I received late advice on how we might approach it, but I would be interested in the Minister’s views.

If we are really serious about ensuring that we are watching taxpayers’ money and that this does not spiral out of control, that level of audit would really hold the feet of the companies working on this project to the fire. They would know that everything they did would be available. I should be clear that under audit rules, that would not necessarily be public information; the National Audit Office would have access, but there would still be considerations about whether it was published. It would not be an open and published document, but the National Audit Office would have access rights, as it has with the BBC and the Bank of England, two recent additional audits that it has done.

[Mr Mark Prisk (Hertford and Stortford) (Con)]

I understand the point about the Comptroller and Auditor General. As I understand it, he reports to my hon. Friend’s Committee, the Public Accounts Committee. I just want to be clear in my own mind about the relationship between the PAC and the Sponsor Body, and whether there is a risk that two horses might be running at one time, particularly in the scrutiny process.

[Meg Hillier]

I am very happy to explain. The Comptroller and Auditor General is an officer of the House and accountable to Parliament. His role—it is currently a he—is to make independent decisions about value for money. He also undertakes, as he is doing right now, audits of over 700 public bodies that fall within the purview of the National Audit Office.

In constitutional terms, the Public Accounts Committee has been in existence for more than 150 years and has the first right of refusal if the Comptroller and Auditor General produces a value-for-money audit report or carries out an investigation. Other Members and other Committees of this House can ask the National Audit Office and the Comptroller and Auditor General to do some work on an issue, and it is entirely a matter for his discretion whether he chooses to do so. whether the request is from the Public Accounts Committee or from any other Committee or individual Member of this House. There have been occasions when individual Members of the House have asked the National Audit Office to look at something and it has done work that has led to some interesting outcomes. The Comptroller and Auditor General is very much a servant of the House.

The Public Accounts Committee, as the Minister highlighted, is a cross-party Committee, reflecting the balance of Parliament at the time and always chaired by a Member of the Opposition. Our job is to examine, through the audit process, what has happened. It is not to direct policy; we strictly do not discuss or make a judgment on whether a Government policy is the right thing. We are looking at the execution, efficiency, effectiveness and economy of that policy.

It could be that there is a policy that I, as an Opposition Member, vehemently oppose, but as Chair of the PAC I am looking not at the policy, but at the effectiveness of it. It has been the case for more than 150 years that members of the Committee take a clear and balanced view based on the facts presented by the National Audit Office. One of the benefits of having the National Audit Office involved is that the figures it produces in a report must be agreed with the body on which they have done a value-for-money study, so once that report is taken by the Committee, the Committee is sure that the numbers are correct and accurate and there is no argument about the figures. Those figures then become a matter of record for the House.

Of course, that does not preclude any other Select Committee investigating; we could, for example, have the Digital, Culture, Media and Sport Committee looking at some of the craft skills, or the Business, Energy and Industrial Strategy Committee looking at some of the industrial impacts of the work. Constitutionally, any Committee is free to do its own work, but that is how things stand for the Public Accounts Committee. There is absolutely no conflict there.

It is important—I hope the Minister agrees—that even if this is not perfect yet, we seek advice from the National Audit Office and others about how we can ensure we get the most effective scrutiny of this multibillion-pound taxpayer-funded project, so that after the Committee stage and once the Bill is passed, we can reassure our constituents that we have written into the Bill the strongest possible audit of the value for money of this project.