House of Commons Financial Plan and Draft Estimates

Clive Betts Excerpts

Tuesday 11th December 2018 Westminster Hall

[Chris Bryant]

I completely concur with my right hon. Friend, who has been one of the key people seeking to drive this forward, in his role as a Whip and given his responsibility for Opposition accommodation. He is fully aware of the problems there have been throughout the Palace. The new fire doors are absolutely hideous, but they are essential. I am sure that when we get around to restoration and renewal we will have a version of them that performs the same function, but is more in keeping with the building. Finally, we have allocated £3.3 million of the administration budget to the restoration and renewal customer and client team, which builds the occupation for R and R when it comes online.

The Inter-Parliamentary Union and the Commonwealth Parliamentary Association, which are important to many hon. Members, are funded out of the resource aspect of the administration estimate, as is the History of Parliament Trust. We have tried to be as tough with each of those bodies as possible, to ensure that we are getting good value for money. The only comment I would make about the IPU and the CPA is that in many other Parliaments there is a foreign affairs department with a room to welcome guests from other Parliaments. It keeps a record of who has visited and where MPs have gone on visits. That is available to their foreign office. There is a kind of inventory of all the work that is being done on foreign affairs visits. That does not happen here.

We have a multiplicity of different Committees and all-party parliamentary groups, and all the rest of it. For example, I went to Colombia in September, courtesy of ABColombia. It would have been interesting to have seen which other Members had visited there over the last five years and good to have exchanged information with them before going. Keeping such records is not something that we do, but it is one of the things that we should look at for the future.

[Mr Clive Betts (Sheffield South East) (Lab)]

Other Parliaments often have friendship groups, as they call them, which are serviced by staff from their Parliament, so there is a continuity to the visits and a base in the Parliament where Members can be serviced, and information collected and retained. That simply does not happen in this country.

[Chris Bryant]

That is absolutely right. When—if—Brexit happens, it will be all the more important, in relation to other European countries, that Members of this House and the House of Lords will be seen as diplomats or ambassadors on behalf of Parliament. We need to garner the information, ideas and contacts that come through that in the national interest. I worry that we do not do that very well at the moment.

The capital elements of the administration estimate are quite significant. We are talking about £236.8 million. Some of the figures in the report that we have published are slightly different from the figures that we are talking about now, because this is an iterative process. In a sense, the reason for having this debate was to be able to inform those decisions as they go forward to the commission. The two largest elements of this relate to the major ongoing building projects. Of that, £117.4 million relates to the Strategic Estates projects. I think everybody on the Committee would say that we worry about the Strategic Estates. It is not just that the Elizabeth Tower started off at one price and ended up at a completely different price—incidentally, it ended up being a rather different project. With the stone courtyard project, the money we were allocating for all five courtyards has been taken up on one. I am sure that both the Labour party and Conservative party would have moaned about this, but we also decided to close the cloister—one of the most beautiful parts of the Palace—and move all the staff out more than 18 months ago, yet work has still not started on it, even though it desperately needs work.

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[Chris Bryant]

Yes; I never want to have the debate on whether we should put 3p or 5p on the price of a cup of tea ever again.

[Mr Betts]

What is my hon. Friend’s view?

[Chris Bryant]

I am led by the Committee. It is a serious point that we sometimes obsess about small amounts of money, but, for example, it looks as if the fire safety budget will have gone from £90 million to £160 million, and it is perfectly legitimate to ask who made that decision and at what point a decision was made by a Committee of the House or by the accounting officer. If we cannot match responsibility and accountability, there is a real danger that financial mistakes will be made and significant amounts of money will go in the wrong direction.

I have already made the point, but I want to labour it, that we are too bound by Government pay scales. That has made it difficult to pay the right price to get the job done in one of the most complicated and difficult buildings and in the context of the most complicated and difficult political decision-making processes. Many staff who work here are admirable—they dedicate themselves to their task as much as any Member of Parliament and work many hours beyond what they are required to do—but, all too often, we end up bringing in experts on consultancy rates and paying more than we need to simply because we are trying to meet the Treasury’s rules. That is a mistake.

I worry that the building swamps the work financially. We are talking about spending dramatic amounts of money on the building, but what is really important here is the scrutiny work that we do, the public coming to understand how we do our democratic business and the engagement with the public. There are major projects that should be slanted much more towards the public.

A classic instance is that, of late, people have regularly queued for an hour or two hours—often standing in the pouring rain—to get into the building to watch democracy in action. We simply have to do better on such projects. I have heard lots of different explanations. Sometimes I am told that it is because one of the security arches is not working, or that people are working to rule because they are fed up with decisions that have been made elsewhere in the Palace—who knows? All I know is that the public feel they are getting a pretty rum deal. They are often late for meetings that they are coming to in Parliament. This should be an open place, not one that is almost impossible to get into.

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[Mr Clive Betts (Sheffield South East) (Lab)]

As always, Mr Howarth, it is a pleasure to serve under your chairmanship.

I came to Westminster Hall today hoping to be presented with a long-service award; I think that I have been on the Finance Committee since the 2005 Parliament. The hon. Member for The Cotswolds (Sir Geoffrey Clifton-Brown), who is not here today, has been an assiduous member of that Committee and I think that he has been on it, too, for most of that time. Collectively, we have quite a good memory as to how things used to happen, and I will come back to that in a minute.

It is absolutely right that we should have this debate. As said by the Chair of the Committee, my hon. Friend the Member for Rhondda (Chris Bryant), there has been a gap in having a debate to which all Members can contribute. Next year, we can hopefully go back to having the debate on the Floor of the House, with an amendable motion, hopefully to get more interest from colleagues. That is where we set off and it would be helpful again in the future. The problems around renovation and restoration, including the decision making on it and the complexity that programme has introduced to the budget process, have somewhat handicapped us this year, but I hope we can get back to that arrangement in the future.

I also echo what the Chair of the Committee said when he asked why we need two estimates. When Members estimates dealt with all Members’ expenditure—their expenses, as they are often referred to—one could perhaps understand why there was a need for two estimates. Now, however, that work is carried out by IPSA and the Members estimate is such a small amount that it needs to be absorbed, so that we can get away from the need for two separate sets of accounts.

The Chair has also gone through some of the issues that the Committee has been dealing with, but thinking back to when I joined the Committee in the 2005 to 2010 Parliament, what is remarkable now is that we actually have a budget. Believe it or not, we did not have one then. If I said that the finances of the House were run worse than those of the most inefficient district council, I would be exaggerating—I would say the most inefficient town council. It was that bad.

Money got spent, nobody properly accounted for it and there was no proper monitoring. What we have now is a budget agreed each year, which is clear. We monitor against the budget; we have a forward plan; we have a framework for the budget, including criteria in which we lay down what is acceptable in terms of increases for future years, based on inflation, plus any exemptions that are brought forward, such as the Brexit Committee, increased scrutiny or security; and we have an efficiency programme as well.

There have also been efforts to raise extra income, which have been successful in many respects, through catering. We have also tried to bear down on costs. I think that we will have the lowest ever subsidy for catering this year and that is entirely reasonable. We put some subsidy in, because the catering by and large is used by the staff who work in this place, and any reasonable and responsible employer would provide that degree of subsidy for people who do not have a choice about where they eat, particularly at lunchtime.

We should recognise that all those things are a great improvement. By and large, I am pretty comfortable that we are in a good place with the revenue budget. There will be arguments, challenges and disagreements about particular amounts of money, the exemptions to expenditure control and whether efficiencies are going quickly enough, and it is absolutely right that we bear down and put extra pressure on those issues. By and large, however, I think we are in a reasonable place, and can justifiably say, and be content with the fact, that the budget is well managed and scrutinised.

On the capital programme, the situation is not quite as rosy. We can go through a number of the examples that have been highlighted. All the time, we have the challenge of getting to grips with exactly what is going on with some major projects. Hopefully, we now have systems in place that are learning lessons from past mistakes, but we can go around and see the evidence, can’t we? At some stage, there is a story to be told about the Portcullis House roof. I have always said that if someone wanted a page in The Mail on Sunday on that roof, they would probably get at least two pages and a colour supplement to match. It is not right yet, is it? It will be even more interesting when we come to replace it. How will it be replaced? It needs replacing at some point. That fundamental issue was not thought of when the roof was designed and constructed. No one here now is to blame, but there are clearly lessons to be learned.

On the Elizabeth Tower, hopefully lessons are being learned. Ultimately, the work probably needed to be done. It is probably the right project, and what is being done now is value for money, but how we got here is not a good example. We have the fire safety work. Again, it needed to be done, but how we got to the sum is not a good example of financial control. There are the problems with the stonework, and the contracts that have now been suspended, following all the difficulties that have been experienced. Then there is the contract for the sprinkler systems that went with the fire safety. There, again, is a story about how a project was designed and controlled. It does not make happy reading. There are lessons to be learned.

On the other side, we simply must accept that there will always be difficulties and challenges when dealing with this type of building. The very fact that every time we set off on a project it is almost certainly a one-off—it will not have been done for many years, and hundreds in some cases—and we will find things we did not expect. The unexpected will always happen. We are in a listed historic building with lots of construction workers around, and Members of Parliament and the public want security. It will never be easy to do construction work in this place. That is a reality, so it will probably never be possible to absolutely nail down the cost of a project right at the beginning and to know where we will get to at the end. We will find new issues and challenges and it will be difficult, but there are lessons we must learn, and be shown to learn, if we are to retain the confidence that public money is being properly spent.

I echo the comments of the Chair of the Finance Committee about the issue of paying staff properly for this sort of work—I have gone on about it ad nauseam, I know. It is a problem. The reality is that in certain areas—construction and IT systems—we are competing with the private sector in London. There is great pressure for those services and we end up bringing in contractors and agency staff and paying more than we would if we appointed people to the House service. In the end, it is a matter of being more flexible about the rules within which we have to operate, regarding the comparison between our pay grades and those of the civil service. That is a challenge we must recognise, and the unions have brought it to our attention. That is not in any way to denigrate the other people who work in the House—exactly the opposite. The Chair of the Finance Committee is absolutely right that we should give them great credit for the service they give us, right across the field, and for their dedication to working for the House, for us and for democracy. That should be put on record.

There have been comments about R and R and the northern estate and I will not go into what has already been said, but I am concerned about the considerable complications of the shadow R and R arrangements. The little draft diagrams about decision making under the arrangements are very challenging indeed. I also sit on the Members Estimate Audit Committee, and the other day I asked the National Audit Office whether, if there were a problem with the shadow R and R arrangements, it could be certain, as our auditor, of identifying where responsibility and accountability lay. I think it would be hard pushed to do that. It has gone away to consider it, but it is a worry, and we are heading for problems if we set up a system in which we cannot point with absolute certainty to where decisions are made and accountability rests. Everyone always blames everyone else when something goes wrong, so there is a challenge there that we ought to think about. I do not know how to get around it, because until we get to the final stage of the statutory arrangements it is very difficult indeed, but the shorter the period of shadow arrangement the better, and the less chance of things going wrong.

I have two final points. I first thank the Chair of the Finance Committee for how he has chaired the Committee this year. We perhaps set off with a different idea of who the Chair should be, but I nevertheless thank him for the inclusive way in which he has run the Committee. We have worked together to address some of the issues and I put on record my thanks to him. Also, the Chair rightly mentioned Myfanwy Barrett, who is leaving us. I have worked with her with various hats on, on the Finance Committee, as a pension trustee on the House of Commons Members’ fund, and on the Audit Committee, and she appears at all these meetings to give us very appropriate and sound advice. I talked initially about how we used to do finance in this place and how we now have proper systems in place, and much of the credit for that goes to Myfanwy. She has changed the system and brought us into line, with proper arrangements with which appropriately to run the finances of this place. We can all be pleased about that. I am sorry she is going, but I wish her well and thank her for what she has done for us. No doubt there will be opportunities to thank her again in Committee, but this is probably the only chance we will get in the wider forum of Parliament, so I would like to put that on record.

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[The Parliamentary Secretary, Cabinet Office (Chloe Smith)]

I am sure that this cannot make up the full set of all those who were reading this report late last night in preparation for this morning’s debate. I thank hon. and right hon. Members for their contributions today, and I am pleased to be here to participate in this important debate on the House of Commons financial plan and draft estimates.

I apologise straight away that my right hon. Friend the Leader of the House is not here. By rights, she should be responding to this debate. I am happy to be here in her place, and I know she spoke last week to the hon. Member for Rhondda (Chris Bryant), the Chair of the Finance Committee, to explain that she would not be able to be here today. She would like me to convey her apologies again this morning. She will be following the debate very closely through Hansard, and I will ensure that key points are brought to her attention.

I congratulate the hon. Gentleman on securing this Westminster Hall debate. I pay tribute to his hard work in chairing the Finance Committee and his dedication to the work on the finances for this place. I also thank him for his work with the Government in the cross-cutting parts of the draft estimates where work needs to be done in conjunction with my right hon. Friend the Leader of the House. As a member of the House of Commons Commission, she has asked me to thank the Finance Committee for its report, which represents the Committee’s provisional advice to the Commission, and the Members Estimate Committee for the 2019-20 to 2022-23 medium-term financial plan and the 2019-20 Administration and Members estimates. I am absolutely sure that she and all other members of the Commission and of the Estimate Committee will want carefully to consider the points made by Members today. I am also sure that they will want to carefully consider the thanks that have been expressed to the staff of the Committee and connected teams.

The Government continue to support a well-run House of Commons and share its drive to increase the effectiveness and efficiency of the service. A high-quality service in support of Members’ duties is integral to the success and strength of our democracy and supporting processes. It is vital that all of us—Members and their staff, staff of the House, and the public—see that this House is committed to the delivery of a service that is both first class and excellent value for money. Today’s debate invites the House to consider those issues.

The purpose of the debate is to give Members the opportunity to comment on the advice before it is finalised, as the hon. Member for Rhondda set out in his opening statement. This annual debate on the draft estimates began in the previous Parliament and took place in 2012, 2013 and 2014 in the main Chamber: a point made by the hon. Member for Sheffield South East (Mr Betts). It subsequently fell into abeyance and so this is the first debate of its type in this Parliament. I know that the Chair of the Finance Committee submitted this as a Backbench Business debate, so we are here in Westminster Hall, but I hear the point about how it ought to be held in the Chamber. Perhaps that can be considered for the future. The fact that we are having this debate is to be welcomed because it allows the issues to be properly looked at in addition to the work of the Committees involved.

I want to thank the hon. Member for Bristol South (Karin Smyth), the hon. Member for Glasgow East (David Linden), who spoke on behalf of the Member for Airdrie and Shotts (Neil Gray), and the hon. Members for Strangford (Jim Shannon) and for Sheffield South East for their contributions, in addition to the Chair of the Committee for setting out the issues.

A question was asked about why the two estimates are separate. It derives from legislation, so it could be regarded as a shared responsibility between the House and the Executive. It was argued that the two estimates could be combined, and there might be value in doing so. I understand that trying to merge them was the subject of a private Member’s Bill in 2016, when points were made on both sides of the argument. However, there was a desire from the Treasury to be able to continue to offer the right level of scrutiny and support to the House of Commons to be able to manage the expenditure, which would not be possible if the two estimates were merged. I am happy to ask colleagues to look further at those issues, which are not in my current brief.

[Mr Betts]

How and to where will the Minister report back? It seems nonsensical. I cannot see why scrutiny should be any weaker if there is one estimate rather than two.

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[Mr Betts]

Not quite.

[Chris Bryant]

No, not quite. Anyway, I am grateful.

I will respond to some of the earlier comments about R&R, or whether we should value this building or go off to a park in Milton Keynes—people always choose Milton Keynes. The problem with the argument for moving out of here and going somewhere else entirely is that because our system has the Executive within the Parliament we would effectively have to take the whole of Government with us as well.

I know that people argue, as I have myself sometimes, that Britain is far too London-centric, and that too much of the economy is focused on London and the south-east. However, the truth is that moving the whole of Government out of London to some other place, building some massive building, buying an enormous site and then providing accommodation for all those people would be more expensive than staying here, not least because this is a world heritage site. It is one of the most recognisable buildings in the world. We would still have to maintain it, even if we were going to hand it over to someone else anyway.

There would therefore be no cost saving. There may be political arguments, which I do not share, about the Union from the hon. Member for Glasgow East (David Linden), and about other elements. However, in the end I do not think that there is any real alternative that is financially advantageous to the taxpayer that involves moving us out of the Palace in the long run. The hon. Gentleman also said that we will build a Chamber exactly like the one we have at present. There may be many good reasons for changing the way in which we do our business, but restoration and renewal is not one of them.

If we want to make changes, that is perfectly within the will of the House, but it is up to the House to make those decisions, rather than to have them foisted upon us because of some kind of building project. As I understand it, the Clerks are already working on IT so that we will be able to vote in the Division Lobbies with our thumbprints or fingerprints, instead of having to walk through and tell them our names and all the rest of it.

As for the main substance of today’s debate, it is important that we scrutinise the finances of the House. They are not the biggest numbers in all Government expenditure, but they are very significant numbers, and over the next few years they will grow rapidly. One of the concerns of our Committee is that there is not much transparency about where decisions are made and whether they have been good decisions. As we move into the process of restoration and renewal, there is a danger that, if there is an extended period with a shadow Sponsor Board and a shadow delivery authority, where decisions are actually being made on very dramatic amounts of money will be even more opaque.

For instance, major decisions are being made on the northern estate project, which at the moment is not part of the restoration and renewal project, regarding the design, how many floors there should be, and what planning applications we should be submitting. Those decisions are currently being made somewhere between the Finance Committee, the accounting officer, and the commission. The shadow sponsor body will start to make key decisions, but, because it will not have statutory effect until the law is brought in, those decisions will have to be ratified by the Finance Committee advising the commission.

If that period goes on for too long, there is a danger that we will end up with bad decisions, uncertain outcomes and uncertain delivery of the project and the finances. The Government can make a material difference to that by introducing the legislation. We have it in draft form at the moment, and we are delighted that that has sped up a bit, thanks to the Leader of the House. However, we need to ensure that in the next Session we get on with passing that legislation as fast as possible.

The one caveat I add is that we should consider very carefully the fact that until 2004 the Palace, like all other royal palaces, was its own planning authority. Since 2004, we have not been our own planning authority, and we are subject to the planning decisions of Westminster City Council. We have a very good working relationship with the council at the moment, but in essence the project will completely dwarf its whole planning department. To all intents and purposes, we will be paying for a new planning department foisted on Westminster City Council. There is an argument for us saying, “Frankly, we should just have it in house, rather than being subject to Westminster City Council.”

I say that because one of the key decisions that is yet to be made concerns the lighting in Westminster Hall; I think that battle has been going on with the planning authorities for the best part of 12 years. That is why we still have hideous arc lamps on the side, on chunks of scaffolding poles, in one of the most beautiful buildings in Europe. If we are unable to make timely decisions, we will end up making more expensive decisions. We need at least to examine whether we should make ourselves our own planning authority.

I am enormously grateful to all those who have taken part in the debate and, in particular, to Myfanwy and her team, who are admirable.

Question put and agreed to.

Resolved,

That this House has considered the House of Commons Financial Plan 2019-20 to 2022-23 and draft Estimates for 2019-20.