Protecting Public Money

One of the oldest Committees in the House of Commons is the Public Accounts Committee. 

The PAC scrutinises the value for money - the economy, efficiency and effectiveness of public spending. It does this by holding short enquiries - often calling witnesses - of those who spend taxpayers - YOUR money. Now there are Select Committees which oversee the work of Government Departments - and they may deal with the question of whether a particular policy, or institution is an effective user of public money - but the PAC is perhaps the best equipped to scrutinise the use of that money. It’s an all party committee, by tradition, chaired by an experienced member of the main Opposition Party. Lord Hennessy - now a member of the House of Lords - but who made his mark as a professor specialising in the workings of Government has described it as "the queen of the select committees...[which] by its very existence exert[s] a cleansing effect in all government departments.”

The process begins with the National Audit Office. This is an independent body. It’s staff are not civil servants and they don’t answer to Minister - or Special advisers. The Head of the NAO goes by the glorious title of “The Comptroller and Auditor General.” He is an officer of the House of Commons. He answers only to the House. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively and with economy. The Reports of the NAO can be very valuable for background reading. It does regular “Departmental Overviews”, as well as consider specific projects and working practices. It’s website is nao.gov.uk

The Public Accounts Committee is charged by the House of Commons Standing Order number  148 -  to examine "the accounts showing the appropriation of the sums granted by Parliament to meet the public expenditure, and of such other accounts laid before Parliament as the Committee may think fit”. At the moment there are 53 inquiries in progress - It’s already published 44 reports in this session. It takes written evidence and holds hearings. 

That hearing resulted in a report, published in July 2019 - and that report is available on the PAC’s website 

That report, like all PAC Reports - has a summary of findings and recommendations. The full report itself and information about witnesses and copies of the written evidence. 

These reports can be valuable sources of information - about specific projects, Departments and publicly funded bodies; lessons that can have a wider application; and can give you an idea of the approach of the committee - should you ever want to, or have to - give evidence to the PAC"

APPGs and Select Committees

Sometimes a media report on Westminster will mention reports "by MPs", or by "committees of MPs". Such phrases don't highlight the nature of the group involved.

 

Select Committees are set up by the House of Commons. (There are also Select Committees in the House of Lords and Joint Committees). The most well known are the Departmental Select Committees, which are covered by Standing Order 152. Further related Standing Orders are 121-152K (2015 Standing Orders as amended by the Addendum of June 2015). One of the most well known, and influential select committees is the Public Accounts Committee - which I attended on Tuesday.

There is a video on committees - accessible here.

APPGs (All Party Parliamentary Groups) are set up by MPs and Peers themselves. They are wholly unofficial. They can range from APPGs promoting serious policy issues, to ones celebrating a particular leisure or cultural interest of its members (such as the Jazz Appreciation APPG). A register of APPGs is regularly published (the latest - March 2015 - is available here)

The range can be seen from the last 20 entries -

Weight Watchers

Wellbeing Economics

West Coast Main Line

West Midlands
Wine and Spirit
Women and Enterprise
Women in Parliament
Women in the Penal System

Women, Peace and Security

Women’s Sport and Fitness
Wood Panel Industry
World Governance
Writers
Yorkshire and Northern Lincolnshire
Young Disabled People
Youth Affairs
Youth Hostelling
Youth Unemployment
Zoos and Aquariums
Zoroastrian

A guide to the rules governing APPGs can be found here.

Public Accounts Committee

This committee, of ancient origin (it existed long before the current system of departmental select committees was established), is back in the news. Its active Chair, Margaret Hodge, has announced that it will be asking the tax authority, HMRC and the Treasury, about the HSBC scandal when the committee takes evidence from them about other tax avoidance schemes tomorrow. http://www.bbc.co.uk/programmes/p02jlzr9 and http://www.cityam.com/208991/hmrc-faces-hsbc-tax-dodge-grilling-parliament.

The committee website can be found at http://www.parliament.uk/business/committees/committees-archive/committee-of-public-accounts/

The PAC - and Starbucks, Amazon & Google

Yesterday the Public Accounts Committee gave a grilling to executives from the three multinational companies listed above - who stand accused of paying less than their fair share of UK Corporation tax. The PAC is one of the oldest committees, pre-dating the departmental select committees by a century. Further information on its work can be found at
http://www.parliament.uk/pac

The Inland Revenue site explains Corporation Tax - "Corporation Tax is a tax on the taxable profits of limited companies and some organisations including clubs, societies, associations, co-operatives, charities and other unincorporated bodies.


Taxable profits for Corporation Tax include:

•profits from taxable income such as trading profits and investment profits (except dividend income which is taxed differently)
•capital gains - known as 'chargeable gains' for Corporation Tax purposes

If your company or organisation is based in the UK, you'll have to pay Corporation Tax on all your taxable profits - wherever in the world those profits come from.

If your company isn't based in the UK but operates in the UK - for example through an office or branch (known to HMRC as a 'permanent establishment') - you'll only have to pay Corporation Tax on any taxable profits arising from your UK activities."

The companies are accused of arranging their affairs purely for the purpose of transferring their tax liability to lower tax areas.


The recording doesn't start for a little while - either fast forward, or allow a little time for the visual and audio feed to start.

Holding to Account

Yesterday, the Independent newspaper published an article about Margaret Hodge, the Chair of the Public Accounts Committee. It is one of the oldest committees currently in existence, and has over many years been the major committee for overseeing the use of public money. It has the National Audit Office report direct to it. By convention, the Chair is a member of the main Opposition party.


The article describes the role and work of the PAC, but the focus of the article is on Ms Hodge’s to hold senior civil servants to account before Parliament. Of course that has faced some resistance, due to the doctrine of individual ministerial responsibility. That doctrine has Ministers responsible before Parliament for the actions of the Departments they head.

Fans of “Yes, Minister”, will no doubt applaud Ms Hodge’s efforts – with its portrayal of hapless ministers constantly outwitted by cunning and clever civil servants. The reality is somewhat different.


The article can be accessed here.

Improving the quality of scrutiny

Yesterday I mentioned the work of the Congressional Research Service (CRS). Along with the CBO (Congressional Budget Office) and the GAO (Government Accountability Office), they provide a service enabling members of both Houses of Congress to improve the quality of their scrutiny - a key role for legislators.

In the UK we have the House of Commons and House of Lords Libraries. The first is the best resourced of the two - and yet its counterpart in Congress - provides an excellent service to legislators. It's reports (Research Papers and Standard Notes) are publicly available here. In addition they provide an individual service to MPs - answering questions and providing specific research. The House of Lords Library is a smaller operation. It's Library Notes can be accessed here.

The National Audit Office carries out similar functions to the GAO. A description of their work can be found on DirectGov. "The National Audit Office works on behalf of Parliament and the taxpayer to hold government to account for the use of public money and to help public services improve performance. The National Audit Office is independent of government and has comprehensive statutory rights of access to the bodies it audits." It works specifically with the Public Accounts Committee, but its reports are an invaluable aid for other select committees. The reports are available here.

Select Committees and Public Bill Committees are assisted by the Scrutiny Unit, which consists of a small number of specialists. They are also useful in advising committees about external sources of specialist advice. Their reports can be accessed here.

The reports mentioned in this post are of course important for the work of Parliament and Congress - but they are publicly available - and I have found them to be useful for background reading - and for specific issues which I am researching. They can be very useful tools if you are a student, researcher, or wish to be one step ahead of others in your knowledge of particular subjects.