Office for Value for Money
Debate between Meg Hillier and Harriett Baldwin
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
It gives me great pleasure to make a statement on the first report of the Treasury Committee in this Parliament, and I again thank the House for giving me the honour of occupying this position. Our first report is on the new Office for Value for Money.
There will not be a single Member who does not believe in value for money for our constituents, who pay for Government services through hard-earned taxes that they give grudgingly to be spent well. As the Chancellor herself has been very clear, the taxpayer is not an automatic cash machine and every penny of taxpayer money needs to be spent as well as possible. The notion of value for money is one we would all support. We also need transparency, and that is a large part of the role of Select Committees: to shine a light on Government actions. This is our first public report shining a light on the work of the Treasury.
The Office for Value for Money is a short-lived, year-long body that is expected to have 20 staff, including secondees from the National Audit Office and the evaluation taskforce in the Cabinet Office. It is headed by a chair, who told us that it would conduct a small number of studies mainly on a cross-departmental basis to identify better value for money across Government. When we spoke to the chair in our hearing at the end of December, we found that although it was supposed to have 20 members of staff, it only had 12 and all were below director-general level, so not the most senior civil servants. That total of 12 and the ultimate total of 20 will include secondees.
It had not ruled out in December using external consultants to bolster the skills it will need to deliver on its work. It had not yet decided at the end of December into which areas it would launch studies, and nor had it set the parameters for evaluating its effectiveness. The Committee was clear that having a body with a name we would all agree with the principle of is not enough; we want to see such a body deliver for our constituents.
We highlighted in our report that there is a risk of duplication. There are already a large number of bodies across Government that deliver on value for money, scrutinise Government, and shine a light on how money is spent: the National Audit Office, which has nearly 1,000 staff in Newcastle and London; the evaluation taskforce in the Cabinet Office, which evaluates projects across Government to make sure they are properly delivering; the new National Infrastructure and Service Transformation Authority, which will be operational in the spring and brings together the previous Infrastructure and Projects Authority in a slightly different format.
There are also units in Departments that work to deliver on value for money in a range of areas, in particular the new arrangements for the Department for Science, Innovation and Technology, with its centre for digital transformation of public services. The Cabinet Office also has a readiness programme, based on regulations arising from the Procurement Act 2023, called “Transforming public procurement”.
There is also the rainbow of books. If we walk into the Treasury and ask questions about the green book, the teal book and the magenta book—and there are others—we will learn that is an important infrastructure for how it issues guidance. The green book appraises policies, programmes and projects. The teal book provides guidance on project delivery in Government, including managing projects, programmes and portfolios—that has been in an internal trial since July 2024. The magenta book provides Treasury guidance on what to consider when designing evaluation.
There are also a number of frameworks, including the Government efficiency framework and the public value framework. Datasets are also provided, including the priority outcomes and metrics first set out in the spending review of 2020. One of the most crucial elements in delivering value for money is that every Department has outcome delivery plans addressing the meat and drink of what is going on in Government. As Secretaries of State sit and plan what they might have to deliver in the spending review coming up in June, they will be poring over those outcome delivery plans as they do their departmental review; each Department will have its own review to look at where money is being spent and what projects are being delivered.
Overarching this there is “Managing public money”, which covers the approach of all permanent secretaries, who are the accounting officers and are therefore responsible for answering for how taxpayers’ money is spent through the accounting processes of Government. Their accounting officer assessments have to fit in with that regime.
We all want to see value for money, but this young body is one-year long and is not yet well established. The risk of duplication is high, and we need to ensure that it delivers something special and different, and crucially that nowhere in the Office for Value for Money will Ministers be playing a role. They will have a key role in delivering on the spending review, but in my experience of over a decade of scrutinising public spending, Ministers can make promises but they are not always well delivered, which can drive up public spending if we are not careful.
It is vitally important that this body delivers as set out, so we have asked the Treasury to explain in more precise detail what it expects the Office for Value for Money to deliver, how it will evaluate its success, and what it wants to see in the long term from this body chaired by David Goldstone. We wish this body well, but the Committee is clear that at the moment there are a number of areas of concern about whether it will actually deliver what it is set out to do.
Dame Harriett Baldwin (West Worcestershire) (Con)
I congratulate the hon. Lady not only on her excellent chairing of our Committee and this report, but on securing a slot in the Chamber to tell people about some of the report’s recommendations. Her background as the former Chair of the Public Accounts Committee gives huge credibility to the points she is making about the possibility that this new and temporary body will not be able to make its mark in the way the Government hoped. One of the areas where my constituency has benefited most in value for money from public spending is flood defences. With her long experience, does she agree that protecting our communities from the impact of climate change is one of the best uses of public money?
Dame Meg Hillier
The hon. Lady, the former Chair of the Treasury Committee—she still serves on the Committee—highlights a pertinent point. The chair of the Office for Value for Money said that it is not just about cash costs and that sometimes it might want to look at programmes that will save costs in the long run. However, that was still ill-defined, and we need to hear more detail, because that is the holy grail, really. If we can spend to save, that benefits our taxpayers in the long run in cash and, in the case of flooding in particular, it prevents something that is catastrophic for many communities.
Budget Resolutions
Debate between Meg Hillier and Harriett Baldwin(2 months, 3 weeks ago)
Commons ChamberRead Full debate Read Hansard Text
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Before I begin, I must—as well as drawing the House’s attention to my entry in the Register of Members’ Financial Interests—draw its attention to the fact that I have a family member who works for Allied Irish Bank.
I have been looking forward to today. I feel honoured to have been chosen by this House, on a cross-party basis, to chair the Treasury Committee, and to be the first Labour Treasury Committee Chair to welcome the Budget of a Labour Government and our first female Labour Chancellor. I thought that, after a 14-year wait, this would be an exciting moment; and in a moment of sentimentality, realising that for the second time today I would be following the right hon. Member for Richmond and Northallerton (Rishi Sunak), I was going to reflect on an interesting constitutional position. When I was in my former role as Chair of the Public Accounts Committee, there was common ground at times with the Prime Minister of the day. In private, when I had cause to meet the right hon. Gentleman, he was courteous, thoughtful and respectful, had the national interest at heart, and, when it came to constitutional matters, was in very much the same place as me. I was therefore very disappointed today by the cheek of the right hon. Gentleman in standing up and having the chutzpah to talk about fear, foreboding and uncertainty.
It was the 2022 mini-Budget that plunged the country into crisis, put up the mortgage rates of our constituents, and is still leaving people living in great hardship. It was on the right hon. Gentleman’s watch as Chancellor—although he did some things about covid that we would all recognise needed to be done, and we recognised it at the time—that the bounce back loans led to a significant amount of the fraud that resulted from covid. Now my right hon. Friend the Chancellor has stood up, and what has happened? The FTSE is up—and it has gone up by more since I stood up, by 1.6 percentage points, unless anyone can update me—and the OBR has said that this will add growth to the economy.
The right hon. Gentleman also attacked the Chancellor on fiscal rules. Let us be clear: fiscal rules are not a new thing. Since 2011 there have been seven fiscal mandates, five supplementary debt targets, two supplementary borrowing targets, and an investment limit. The rules set in 2011 lasted three years, but in the last three years we have had three different fiscal mandates, two different supplementary debt caps, and one supplementary borrowing target. I think the Chancellor knows that when she is in front of the Treasury Committee we may challenge her and ask her about her fiscal rules, but I have certainty—we all have certainty—that she will be in her post for long enough to stick to the fiscal rules that she has set. They will have a longevity beyond the previous Government. I welcome this Budget, and pay tribute to my right hon. Friend. The UK’s first woman Chancellor stood at that Dispatch Box, and another glass ceiling was shattered. She should be proud; we are proud, and I congratulate her on that achievement.
It is my first Budget as Chair of the Treasury Committee. I have spent 13 years examining public spending in enormous detail, including nine years as Chair of the Public Accounts Committee. Like me, the Chancellor was a scrutineer: she chaired the Business and Trade Committee, and she understands the importance of scrutiny. I am very clear that the Treasury Committee will not give the Chancellor an easy ride, because she is a highly capable woman who can come and explain all her decisions to us. She knows that it is our job to rigorously examine the detail of the Budget next Wednesday, when she will appear in front us. She will be getting a bit of what she dished out as Chair of the Business and Trade Committee. I know that she will expect nothing less than robust challenge—if she were not up to it, she would not be in her post.
I have to say that I am disappointed that so much of this Budget was revealed before today, which is not normal practice. Going forward, I hope that constituents and the MPs representing them will be the first to know about major issues, and that courtesy to this House and the Treasury Committee will be a hallmark of Treasury engagement.
This Budget comes at a very exciting time, but it is a difficult one for the Chancellor. She has made it very clear that she will deliver certainty, and she has inherited one hell of a mess. We have had a tumultuous period: Brexit, the pandemic, the mini-Budget, 14 years of austerity, delayed and failed decisions, particularly on capital spending—we have had three carbon capture and storage projects that have never come to fruition—the saga and cost of stop-and-start on High Speed 2, 700,000 pupils in schools that are not fit for purpose, public services on their knees, and public sector net debt at its highest rate since the second world war.
Dame Harriett Baldwin (West Worcestershire) (Con)
I congratulate the hon. Lady on her unopposed election as Chair of the wonderful Treasury Committee. Does she share my concern that the individual who has been appointed to the office for value for money was previously on the board of HS2?
Dame Meg Hillier
The hon. Lady is a former Chair of the Treasury Committee and I welcome her being a member of it, as she will add great value. As she knows, we will have the opportunity to raise questions with the Chancellor at next week’s hearing. She has now been forewarned that the hon. Lady may ask about this issue. It is important that we recognise good people who provide support in the public sector by watching our public finances, and I always take people on good faith unless I have a reason not to do so. We have an opportunity to explore this issue elsewhere.
As a share of GDP, taxes are higher than at any time since world war two. Before the election, my right hon. Friend the Chancellor was tough on spending commitments, and sometimes there was a bit of moaning in the Tea Room. I do not want to tell tales out of school, but shadow Ministers were dismayed because they could not spend everything that they wanted to spend. As Chair of the Public Accounts Committee at the time, however, I knew what she was talking about and that what was coming was not going to be pretty, so I welcome some of the steps that she has announced today. I have not had a chance to look in the Red Book or at the detail, but the multi-year funding settlements that she has put in place are a great opportunity to give certainty to business and investors in our country. Hopefully, we will finally nail the issue of HS2, which has cost the taxpayer a fortune. We need to get on with that in order to make sure that we are delivering investment for our country.
I look forward to seeing the detail on cladding, but it is a big issue in my constituency, where many people’s lives are on hold as a result. The money for affordable homes is incredibly vital for those living in difficult situations, and the Chancellor is absolutely right to have finally funded the compensation schemes for infected-blood victims and for postmasters and postmistresses. When the state makes an error, the state needs to correct it. It should never be a party political football.
The Chancellor has had to make tough choices, and she has set out her fiscal rules to provide clarity to the markets and a long-term trajectory for investment and growth. We on the Treasury Committee will watch net financial debt closely to see how the benefit is measured, and it is important for taxpayers and the market that we do so. She will be more aware than anyone about the impact on the market if she does not manage debt very carefully. International investors may use the existing debt model, so when she comes in front of the Treasury Committee, I would be interested in talking to her about how she sees this playing out in the international arena.