Select Committee on Procedure Third Report


(a)Section 82 raises significant issues in relation to the parliamentary scrutiny of government expenditure. (paragraph 1)
(b)We conclude that the Government has not made out a particularly strong case for the transfer of significant decision-making on expenditure from primary to secondary legislation. We believe that a paving bill, which would have been amendable, should have been the means whereby the Government sought power to incur this expenditure. In the first and so far only use of the powers granted under the section, the actual expenditure has proved to be considerably less than that originally expected: only 5.9 per cent of that authorised, in fact. This suggests that the DSS may have miscalculated both the urgency of its need for preliminary spending on IT, and the extent of that spending, and that it thus sought extraordinary powers to override normal parliamentary procedures on the basis of claims which have, with the benefit of hindsight, proved to be somewhat exaggerated. (paragraph 22)
(c)If Section 82 had been subject to adequate scrutiny at the time of its original passage, some of its deficiencies could have been addressed at that stage and it might not have been necessary for us to conduct our present inquiry. (paragraph 23)
(d)We agree that the scrutiny of the first draft Section 82 report by the Social Security Committee led to significant improvements, and we commend the Committee for its diligence. (paragraph 27)
(e)The Government has given a broad undertaking that "we are happy to share all the information that we have about the expenditure that is the subject of a Section 82 report, subject only to considerations of 'commercial confidentiality'". We welcome this assurance. We accept that the need to preserve the confidentiality of sensitive negotiations may impose some constraints on the information that can be divulged, but subject to this one restriction we believe that information in all the categories set out above should be made available to the House and its Committees as early in the scrutiny process as possible. We also support the recommendation of the Chairman of PAC that "expenditure reports should include a thorough analysis of the risks, as well as the value-for-money benefits, of incurring preparatory expenditure", and that Section 82 proposals "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)". (paragraph 30)
(f)We recommend that the Government should normally make allowance for a period of at least six sitting weeks between the submission of a draft report to the Social Security Committee and receipt of the committee's comments. (paragraph 31)
(g)We recommend that the Government should accede to any request either by the Social Security Committee or the official Opposition that a report be taken on the Floor. If so taken, any relevant select committee reports should be 'tagged' on the Order Paper. (paragraph 32)
(h)We regret that this [the appointment of some members of the Social Security Committee to the Delegated Legislation Committee] was not done in the case of the first report under Section 82, and recommend that it should be done in future cases, in the interests of coherent scrutiny. (paragraph 33)
(i)We welcome this undertaking by the Government [to provide the House with an outturn report on each use of Section 82 powers]. (paragraph 34)
(j)We support the recommendation by the Chairman of PAC that HM Treasury should develop guidance on the use, format and content of future Section 82 expenditure reports, such guidance to be drawn up in liaison with the National Audit Office. (paragraph 35)
(k)We are not persuaded that it was necessary to seek the Section 82 powers even in relation to DSS. It follows that we are even more sceptical about any future extension of them to other government departments. It would be deplorable if any Government were to seek further Section 82 powers as a device for circumventing normal parliamentary scrutiny of expenditure. (paragraph 40)
(l)Nevertheless, we do not wish to state dogmatically that no other government department should ever seek comparable powers. It may be that exceptional circumstances might justify Parliament granting such powers. If so, we believe that safeguards should apply as set out in the following paragraphs. (paragraph 41)
(m)The Treasury in the first instance, and subsequently Parliament, should be satisfied that the circumstances are genuinely exceptional. For the reasons given in Mr Smith's letter, 'one-off' projects would not be suitable for a grant of expenditure under Section 82-type powers. In the case of such projects, and where possible in relation to other projects, a paving bill is a more appropriate way of proceeding. (paragraph 42)
(n)We recommend that in considering any future proposals, the Treasury should adopt more stringent criteria than appears to have been the case in relation to Section 82. (paragraph 43)
(o)The deficiencies identified by the Social Security Committee, and the contrast between the large sums of money originally sought and the small sums actually spent, suggest that this was a proposal which should not have been cleared by the Treasury. (paragraph 43)
(p)Full account should be taken of the risks as well as the prospective benefits of authorising preparatory expenditure. (paragraph 43)
(q)As a general rule, Section 82-type powers are only likely to be appropriate in relation to IT development and procurement. (paragraph 44)
(r)We recommend that any Programme Motion governing a bill which contains clauses conferring Section 82-type powers should make specific provision for those clauses to receive guaranteed and separate debating time. (paragraph 45)
(s)We recommend that all the undertakings given by the Government in relation to the exercise of powers under Section 82 should be extended, mutatis mutandis, to any future comparable legislative provisions. (paragraph 46)

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