Contingencies Fund (No. 2) Bill

Richard Thomson Excerpts

2nd reading
Thursday 11th March 2021 Commons Chamber

[Richard Thomson (Gordon) (SNP) [V]]

This is a short but important Bill. Last year’s measures in the Contingencies Fund Act 2020 were absolutely unprecedented. Setting a level of 50% on the fund ensured that the rapidly evolving policy response to covid-19 could be matched with the necessary resource. It was important that we did so. At that time, we were heading for a lockdown and a parliamentary recess for Easter. It was unclear when Parliament would be able to return and we had no means at that point, at least as I recall, of enabling virtual participation in Westminster, so it was essential to allow necessary and perhaps even extraordinary expenditure to take place in the short to medium term to support the policy responses to covid that were deemed to be necessary, without the requirement for us to reconvene Parliament to ensure that further spending could be authorised.

This year’s Bill, by extending the scale of the fund beyond the usual 2%, clearly recognises a need for that flexibility to continue. Setting this year’s contingencies fund at 12% may well give access in the short term to the same amount of resource that was used in practice last year. In the light of experience, it may be felt that out of all the arbitrary figures that could have been chosen for the Bill this year, this is the figure that somehow just feels right. However, for all the progress that has been made with vaccines and vaccinations in recent times, we are not out of the woods yet. There have been mutations to the virus, which have increased its virulence and forced us in consequence to change our behaviours and responses. There may yet be further mutations that force us to further reappraise our plans on how we wish to emerge from the present restrictions.

The only thing that we can predict with certainty about the future of living under this virus is that we cannot predict it with certainty. As such, while the Scottish National party group supports the Bill and will not oppose the 12% level being set on the fund, I will place on the record that we would have been content, in the interests of prudence and good governance, to see a higher figure being used.

Let me turn to the proposed amendment; I am aware of your injunctions about time, Mr Deputy Speaker, and that the Bill will have a Committee stage. I have looked at the amendment, which has been tabled in the name of the Leader of the Opposition and the shadow Chancellor, and although it increases the length of the Bill tenfold, it clearly seeks to tackle important issues regarding transparency and accountability in Government spending. I have a lot of sympathy with its intent and will listen carefully to the arguments in Committee.

There is, however, a much wider issue regarding the ability of this House to properly scrutinise Government expenditure, which extends to the estimates process. For someone who entered the House with a background in local government and who bore the scars of passing budgets as a co-leader of a minority council administration, it is remarkable, in contrast, how contested local authority budgets running to just hundreds of millions of pounds can be, when hundreds of billions of pounds across the year in central Government expenditure can still sail through relatively untroubled by the interference of competing views from the Opposition. Although there have been some recent changes to the estimates days’ debates—the estimates can now be debated rather than needing the vehicle of Select Committee reports related to them—it is still extraordinary to my mind that there is no meaningful way to seek to amend Government spending through the estimates process or an ability, as a matter of course, to scrutinise planned departmental expenditure before it is approved.

That brings me, in closing, to the current fiscal framework. The Scottish Cabinet Secretary for Finance has repeatedly pressed the UK Government to provide extra flexibility so that the Scottish Government can mobilise funding when it is most urgently needed through this crisis. While the UK Government have indeed confirmed that the late funding allocated in this financial year could be carried forward into 2021-22 without having to use the Scotland reserve, that flexibility is still limited and temporary. The crisis has revealed a fiscal framework in the UK that is not fit for purpose. As the previous furlough extension for England demonstrated, no matter what the devolved Governments might wish to do in policy terms, problems still have often to be felt first in Whitehall before a budgetary response is triggered for England, which then triggers its way through to other Governments.

In my view, the best people to take decisions for Scotland are those of us who make our lives here. The policy choices we make should be restricted only by the limits of our own resources, the limits of our own choices and the limits of our own imaginations, and not by limits and constraints that are set elsewhere. We will continue to press for these additional flexibilities as part of the fiscal framework review.

Contingencies Fund (No. 2) Bill

Richard Thomson Excerpts

Committee stage & Committee of the whole House
Thursday 11th March 2021 Commons Chamber

[Rachel Hopkins (Luton South) (Lab) [V]]

I refer to my entry in the Register of Members’ Financial Interests as a member of the Public and Commercial Services Union.

Parliamentary authorisation of public expenditure is critical, but we all recognise the need for this Bill to ensure that the Government can act quickly to support the economy. That said, the Government should not be able to act without accountability and transparency. I support the comments made earlier by my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) with regard to transparency and scrutiny. Indeed, just this morning, as part of business questions, the Leader of the House reiterated the point that Members have a right and a duty to hold the Government to account. He also said that scrutiny leads to better government, and that it is in the interests of Government that scrutiny takes place.

It is with those principles in mind that I want to speak in favour of the amendment in the name of the Leader of the Opposition, which seeks to improve Government accountability to Parliament for as long as the increased flexibility of the contingency fund is in place. I want to speak specifically with regard to the checks on the regularity, propriety and value for money of any Government procurement decisions, particularly the importance of the reporting of any written ministerial directions given, so that Parliament can be clear when Ministers have decided to override objections made by senior civil servants.

Throughout the pandemic, the Government’s record on transparent procurement processes and securing value for money on public spending has been, sadly, too often completely inexcusable. Despite NHS Test and Trace being allocated a total of £37 billion and a Conservative peer being handed the top job, the Public Accounts Committee’s report on test, track and trace made this finding. In terms of tackling the pandemic, it said:

“There is still no clear evidence to judge NHST&T’s overall effectiveness.”

I also ask the Minister whether he has reflected on yesterday’s report by the National Audit Office on Test and Trace and whether it contained any lessons to be learned by the Government as well.

The theme of incompetence and cronyism does not end there. In a Westminster Hall debate back in December, I joined many other MPs in highlighting the fact that the National Audit Office report on the Government’s procurement during the pandemic had found that contracts had been awarded without due diligence, with a lack of documentation, and no clear audit trail or transparency. Just a few weeks ago, the High Court ruled that the Government had acted unlawfully by not publishing details on the contracts awarded within 30 days, including many awarded through the Government’s VIP lane. The judge ruled that the Government’s inaction breached a vital public function of transparency regarding how vast quantities of taxpayers’ money was spent. The passage of the Bill should not allow the Government to act without accountability and transparency. There are too many instances of the Government’s poor procurement policy representing poor value for money.

In conclusion, I wish to press the point that Ministers must be accountable and civil servants must not be scapegoated for the Government’s poor decision making. The legally binding protection of written ministerial directions ensure that they are not implicated in the Government’s incompetent decision making and cronyism. This is not unnecessary bureaucracy, as referred to by the hon. Member for Thirsk and Malton (Kevin Hollinrake); it is right for Parliament to be able to scrutinise them in a timely manner in the public interest.

[Richard Thomson (Gordon) (SNP) [V]]

I will be brief. The concerns of Scottish National party MPs over certain covid-related Government procurements are well known and on the record, and we will continue to hold the UK Government to account for them. Nevertheless, whether the new clause is viewed through that particular lens or not, the fact remains that taken on its own terms it would greatly improve scrutiny, oversight and accountability, without creating any disproportionate impact on the Government or the overall efficiency of the spending process. Trying to equate the improvement in process that would result with an attack on business, as we have heard today, is frankly nonsense. It smacks of desperation, and I am certain that that is exactly how it will be seen.

The SNP will be supporting this amendment. If the Government have any care at all for transparency on these matters, and for being able to demonstrate that there is proper stewardship of public funds, there is frankly no good reason for them not to support it as well.

[The Financial Secretary to the Treasury (Jesse Norman)]

As you will be aware, Mr Evans, clause 1 provides for an increase in capital for the Contingencies Fund. It raises the limit from the standard 2% to 12%, providing a sum of approximately £105 billion for the financial year 2021-22 only.

We are all agreed across the House on the central importance of accountability to Parliament, but it is the Government’s very firm view that new clause 1 is not needed in order to achieve accountability. It is important to say again that supply processes continue to be used in the usual way with expenditure still subject to parliamentary scrutiny and a vote. This Bill simply permits an advance on expenditure that will be included in the main or supply estimates.

Let me set out four points that make this quite clear. First, the Contingencies Fund is about ensuring cash flow, restricting it to urgent services in anticipation of parliamentary provision becoming available and temporary funds required for necessary working balances. It is not additional spending; it is simply a cash advance to be repaid. It does not in any way preclude the scrutiny by Parliament of additional provision sought by a Department through the supply estimates, nor does it preclude the Comptroller and Auditor General from expressing his view on the regularity of departmental expenditure.

Secondly, each and every departmental accounting officer remains fully accountable for expenditure; and, of course, that expenditure will be audited by the NAO in the usual way as part of the annual reports and accounts of each Department. Transparency arrangements for ministerial directions—where they are sought under the requirements of the doctrine of “Managing Public Money”—will also continue in the usual way. Accounting officers are already required to publish any direction that they receive as soon as possible, unless there is a broader public interest in keeping it confidential.

Thirdly, the House has seen throughout 2021 that Departments must notify Parliament by way of a ministerial statement agreed with the Treasury where a commitment will be or has been entered into in advance of supply. I would like to make it clear that the mandatory WMS wording agreed with Parliament and the NAO already distinguishes whether this advance is a new service, new expenditure or simply a cash requirement ahead of a supply estimate.

I remind hon. Members that the Contingencies Fund is not a tool—some hon. Members have made this point—that Ministers can choose to use; it is not discretionary. It is managed entirely by the Treasury, and the accounting officer must ensure that advances are given in line with strict rules agreed between Parliament, the NAO and the Treasury. These rules are set out clearly in the published estimates manual. Every Department makes an application outlining the urgency of their case and how they plan to meet the listed requirement. It is worth mentioning that the NAO also audits the Contingencies Fund accounts, and that includes a full list of advances.

Let me turn to a couple of the points raised by Members in the debate. I did ask for questions on the Bill, but the hon. Member for Luton North (Sarah Owen) somehow found that difficult. She raised another irrelevant issue about public spending. She asked me about my own link. I assure her that I had nothing to do with the awarding of any contracts. As my hon. Friend the Member for South Cambridgeshire (Anthony Browne) pointed out, this is true for Ministers across the Government, according to the NAO.

The hon. Member for Hackney South and Shoreditch (Meg Hillier), who chairs the Public Accounts Committee, made a speech, wonderfully—and I thank her for it—on the Bill. I am very grateful. She asked whether the Bill is rushed through. The answer to that question is no, it is not. It is important to do it, we think, before the beginning of the new financial year. The same Bill was put through in March last year, and so it is here. She asked about Treasury controls. We fully, strongly believe in them. She recommends Ghanaian principles of public finance, but I am not sure I can follow her in that direction.