Alignment (Clear Line of Sight) Project

Penny Mordaunt Excerpts

Monday 5th July 2010 Commons Chamber

[Penny Mordaunt (Portsmouth North) (Con)]

I broadly welcome the motion. I particularly welcome the proposal that parliamentary time must be provided to debate spending reviews and the annual pre-Budget report, and I hope that in future that will be the case—mind you, in the light of recent Treasury reporting standards, just to have a spending review at all would be a marked improvement. However, I have some concerns about the clear line of sight project, and I hope that the Minister will be able to reassure me and the House about those.

I am not an economist or an accountant, but I have seen enough episodes of “Yes Minister” to take a cautious approach to projects that seek to allow the cleansing light of scrutiny to fall on less information. I am concerned that “clear line of sight” might become “out of sight” in relation to some high-spending and income-generating Departments. For me, the Sir Humphrey element of this project concerns net accounting throughout—in other words, less information being presented, with potentially less transparency as a consequence.

Other Members have raised that issue, so I will not dwell on it. However, I wish to address the underlying assumption that Departments should be allowed to spend that additional income. It is stated as an advantage of this proposal that it will encourage Departments to be more frugal and squeeze better value for money for the taxpayer. I would argue that, paradoxically, the contrary might transpire, as Departments used the licence of net estimates to indulge in non-core activities aimed at increasing revenue for the Department. That would, in effect, be spending by stealth. Additional income raised would have to be spent in order to maintain the net figure, and presumably if the net figure were maintained Parliament would be content. Surely we would do better to have a system that set out gross expenditure and that enabled Parliament to choose how any additional income should be spent, held in reserve, or used to reduce the burden of that expenditure on the taxpayer. Unless we guarded against that, over time, we might see a distortion in the price of purchasing services such as passports, which are now practically compulsory, or in fees that might be paid, for example, to the UK Border Agency.

A second scenario might see a Department creating an income-generating activity that failed to deliver value for money or came at the expense of the statutory service that that Department was charged with carrying out. I will give the House a quick example from real life, not “Yes Minister”, although it could well have been used for that. When I was a director of Kensington and Chelsea council, I discovered that one of our local hospitals was hiring out one of its closed, but fully equipped, wards to a film company to use as a film set. To add insult to injury, the movie was a pornographic one. Although I cannot claim to have seen the final picture, as I understand that these things are no longer claimable on parliamentary expenses, it was a big-budget affair and it generated substantial income for the hospital—but apart from cheering up a few of the in-patients, it could not be said to be contributing to the objectives of the primary care trust.

The absence of scrutiny on gross income and expenditure is the equivalent of saying to the public, “Don’t bother to fill out your tax return—just tell us what your net income is and we’ll take it at face value.” Tax inspectors should see what items an individual is claiming against their income, and Parliament should be able to do the same. I hope that my hon. Friend the Minister will provide me with that reassurance when he sums up.