Select Committee on Procedure Minutes of Evidence

Letter from the Chairman of the Committee of Public Accounts to the Chairman of the Committee

  I agree that the Committee of Public Accounts does have a particular interest in the operation of Section 82 and its implications for the parliamentary scrutiny of expenditure. During the passage of the Welfare Reform and Pensions Bill our Committees were in close contact on issues of mutual concern, and I wrote to you on 16 April last year with information to assist the Procedure Committee in its deliberations on this matter.

Once the Act had received Royal Assent, the Secretary of State used the powers conferred on him under Section 82, to enable preparatory expenditure to be incurred on a new information technology system for the Child Support Agency. This first use of Section 82 powers was the subject of the First (HC 180) and Second (HC 135) Reports, Session 1999-2000, of the Select Committee for Social Security.

  As a general rule, I would expect the Committee of Public Accounts to take the lead in the scrutiny of proposals to incur preparatory expenditure under Section 82. However, on this particular occasion, under arrangements described in HC 180, which I had agreed with the Chairman of the Social Security Committee and the Secretary of State, the Social Security Committee took the lead. The Social Security Committee's scrutiny of the draft expenditure report significantly improved its quality, and was an effective means of ensuring that the report contained sufficient relevant information to inform the House of the need for, and the extent of, preparatory expenditure, and to ensure that taxpayers' interests were properly protected. I therefore share your Committee's interest in the way in which the House and its Committees deal with this procedure. It follows that I consider the Procedure Committee's current review of Section 82 to be both necessary and valuable.

  On the issues set out in your letter to the Secretary of State, I would make the following points:

    —  It is generally accepted that, even with thorough select committee scrutiny of expenditure reports, the implementation of Section 82 results in a diminution of the effectiveness of Parliament's scrutiny of expenditure. In principle Section 82 should not be extended to other Government departments, but if it is, such powers should be used only in exceptional cases.

    —  Authority to incur preparatory expenditure via the Section 82 route does not override the need for the expenditure to be included in an Estimate and be voted by Parliament, as part of the House's annual supply procedure, before it can be incurred. In order to counter the diminution in Parliament's scrutiny of expenditure authorised via Section 82, it might be worth considering whether the Estimates should identify separately the items of preparatory expenditure included in them.

    —  Each proposal to use Section 82 powers should be supported by a well-reasoned case, which should set out the consequences, in terms of value for money likely to be foregone, of alternative courses of action (such as a paving bill; awaiting Royal Assent; delaying implementation).

    —  Expenditure reports should include a thorough analysis of the risks, as well as the value-for-money benefits, of incurring preparatory expenditure. In this regard there was clearly a deficiency in the first draft of the department's expenditure report for new information technology for the Child Support Agency. I agree that, as a minimum, the categories included against the fifth point in your list of issues should be addressed.

    —  Given that Section 82(2)(a) requires Treasury consent before an expenditure report is laid before the House, there would be clear benefits in the Treasury developing guidance on the use, format and content of Section 82 expenditure reports. Such guidance should be agreed with the National Audit Office.

Rt Hon David Davis MP

6 June 2000

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2001
Prepared 27 March 2001