Northern Ireland Budget (No. 2) Bill

Meg Hillier Excerpts

2nd reading
Monday 10th July 2023 Commons Chamber

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

I share the disappointment that we are here today expressed by the Minister, my hon. Friend the Member for Hove (Peter Kyle), and the hon. Member for Gordon (Richard Thomson). We should not have to be here discussing this, although I appreciate that we have already made a decision about the budget and that this was absolutely necessary to enable Departments to spend.

I, too, pay tribute to the civil servants who are having to make very political decisions while labouring—I hope—under Managing Public Money and making sure that they are making proper financial decisions. Nevertheless, every decision they make on a budget of this nature will cause political repercussions. They have been put in an unenviable position.

I rise to speak about a specific element of this budget. I wrote to the Minister about this, so I hope that when he winds up, the Minister of State will address the matter directly. The Northern Ireland Audit Office is critical: with no Assembly sitting and no Executive, it is the only body able to scrutinise spending by public bodies in Northern Ireland; it audits 150 public bodies. Of course, without the Assembly sitting there is no Public Accounts Committee in Northern Ireland, so the NIAO is the only body that is able to do that work. It is critical that it does so.

We all know the importance of the National Audit Office here in the United Kingdom. It is a much bigger body, and as the Secretary of State, a former member of the Public Accounts Committee, knows, it does invaluable work, not only training Ministers to manage budgets but making sure on behalf of the British taxpayer, through Parliament, that those budgets are spent properly. Independent of the Executive and appointed independently of the Executive, the Comptroller and Auditor General has the powers to investigate, without fear or favour, every area of public spending in England and parts of the United Kingdom.

The Northern Ireland Audit Office is a much smaller operation, ably headed up by the Comptroller and Auditor General for Northern Ireland, Dorinnia Carville. She, like the UK Comptroller and Auditor General is totally independent of Ministers, of Government Departments and of all the public bodies that her office audits. The NIAO has 115 staff—it is a much smaller version of the UK NAO, which has over 950 staff—and an annual budget in the region of £9 million, so it is very small in the context of this budget. About 0.06% of the block grant goes to the Northern Ireland Audit Office, but as the Secretary of State knows, it has a significant impact.

The amount of money saved by the national audit bodies is significant in the grand scheme of things, so it is disappointing to me that the budget of the Northern Ireland Audit Office has been reduced by £515,000. I think that will store up problems for the future. Very disappointingly—I am particularly disappointed in the Secretary of State on this point—that reduction was made without any meaningful conversation or agreement with the Comptroller and Auditor General for Northern Ireland, which is a required position. That amount of money will have a substantial impact on the ability of the Northern Ireland Audit Office to deliver its work, and with the only scrutiny that is going on in Northern Ireland being through that audit office, it is really important that that work takes place.

I also worry greatly that if the Northern Ireland Audit Office is not able to do its work, the pressure on the UK Public Accounts Committee—which I have the privilege of chairing—will be immense. We have already had to examine the implementation of the energy support grant, which came directly through the then Department for Business, Energy and Industrial Strategy and was implemented in Northern Ireland through that route. Unusually, we found ourselves scrutinising direct spending in Northern Ireland. I was very grateful to the hon. Member for Belfast South (Claire Hanna), who was able to guest on our Committee—we felt very strongly that we needed at least a voice from Northern Ireland on the Committee to explain what the impact was there—but neither myself nor any members of the Public Accounts Committee desire to have a regular role in scrutinising the work and affairs of public bodies and Departments in Northern Ireland. That is rightfully the role of the Public Accounts Committee of Northern Ireland, which we hope will be up and running again, as we hope that the Assembly and the Executive will be up and running again.

I am concerned that the Comptroller and Auditor General for Northern Ireland had no engagement with the Secretary of State or the Northern Ireland Office when arriving at the Budget. Only a couple of weeks ago, she told the Northern Ireland Affairs Select Committee that her only conversation with the Secretary of State and the Northern Ireland Office was via the Department of Finance, and she only learned of her budget on its publication. She had modelled various options and put them forward to the Northern Ireland Department of Finance, but when they were in turn put forward to the Secretary of State, he put forward three options, none of which reflected what she had modelled. There had been no engagement with the Northern Ireland Audit Office.

That is a serious constitutional issue—in the middle of a much bigger constitutional issue, yes, but nevertheless it is very important. If we cannot have a strong and independent Comptroller and Auditor General with their own national audit body, properly funded and supported, that is a real concern, but the fact that the Northern Ireland Audit Office’s funding was not properly discussed with it is a really serious matter. It is through this Parliament and the Public Accounts Commission that we decide on the resources that are given to the United Kingdom’s National Audit Office. It is not at all appropriate that an Executive should control or direct an audit institution’s access to resources. I cannot get my head around why that could have happened, because it is absolutely vital that it does not. I hope the Minister will directly address that point.

I will finish by underlining the problems that can arise when audit gets weak. The Public Accounts Committee, which I chair, has looked repeatedly at the challenge of local government audit in England. We have seen a dearth of public auditors, which has contributed to late audit opinions: very many councils now have not had audit opinions, not just for one year but for two. That has left councillors, council tax payers, and certain officers of those councils blind as to the decisions they are making. A number of councils have serious financial problems, and for some, that is partly because of this issue. In the past, strong local audit in local government has helped to keep councils honest, straight and true. I have great respect for local councils and councillors— I myself was a councillor before entering this place—but we have seen a real, direct impact of that weakness in audit among English councils, and we are seeing that creeping tendency with hospitals in England, too.

We fiddle with this issue at our peril, and in the grand scheme of things, half a million pounds is a lot of money. The Northern Ireland Audit Office will not be able to carry out its work without that money, so I hope the Minister will address that point directly in his response. Perhaps he will even commit to going away and looking at what the impact will be. Could he or the Secretary of State please commit to having a face-to-face conversation with the Comptroller and Auditor General for Northern Ireland?

--- Later in debate ---

[Mr Baker]

We certainly do. The right hon. Gentleman and I have walked a long way together over the last seven years. As he well knows, I regret that we have had to part ways somewhat at this point, but we are clearly aware of his concerns, which he articulates with great clarity and force. I hope he will not mind if, at this late hour, I say that I will leave this to my boss, the Secretary of State, and the other parties to work through.

Finally, I think, I turn to the issue of the Northern Ireland Audit Office, which the hon. Member for Hackney South and Shoreditch (Dame Meg Hillier) set out in some detail. Of course we appreciate the important role played by the NIAO and other independent bodies that hold the devolved Government to account, and ensure that public finances are spent properly and efforts are made to improve public services. However, when the Secretary of State considered budget allocations, he needed to take account of the challenging budget context and reductions faced by other Northern Ireland Departments. In such challenging circumstances, we believe it is only right that we ask the non-ministerial Departments and independent bodies to find savings in the same spirit as the rest of the Northern Ireland Departments.

[Dame Meg Hillier]

My concern is that it is a disproportionately large cut to a very small budget. It means that the Comptroller and Auditor General for Northern Ireland cannot complete her work programme for this year, and there is nobody else—no Executive, no Public Accounts Committee, no Assembly—that can do that job.

[Mr Baker]

Let me just check my notes to make sure I answer the hon. Lady properly on this point.

What we have done is roll forward the budget. The recommendations of the Assembly’s Audit Committee were made in a different economic and budget context. We maintain that, by rolling forward the 2022-23 budget allocation to the Northern Ireland Audit Office and other non-ministerial Departments, we have reached a fair outcome. I would be glad to meet the hon. Lady to discuss this matter further, but I think it better that we meet face to face in the first instance.

I hope right hon. and hon. Members agree that I have tried to respond to some of the main points made in the debate. We will write the letter on education funding. We do have a vision for Northern Ireland, which is one of Northern Ireland standing on its own two feet, with a balanced budget and reformed, effective and affordable public services; a Northern Ireland that is prosperous, happy and free, and is not always standing with its hand out to one party or another.

Question put and agreed to.

Bill accordingly read a Second time; to stand committed to a Committee of the whole House (Order, this day).