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Mr. George Osborne: The hon. Gentleman is right that efforts are being made to improve the discharge of patients from hospitals, but does he agree that we need a joined-up approach, to use the jargon? We need to look at the closure of care homes and of places in care homes in wider society, because that provides less opportunity for discharging people from hospitals.

Mr. Steinberg: The hon. Gentleman is right. I do not intend to get into a political battle with him over the issue, but he should remember that the Conservative Government encouraged the increase in the number of private care homes, which are now being sold off for property development, reducing the number of care places. I will not go into that. Let us try to keep it non-political this afternoon but I agree that there must be a joined-up approach and much more co-ordination between the NHS and local social services departments. More care places must be found.

The real problem is clearly outlined in the report, which informs us that the number of general and acute beds fell from 200,000 in 1986 to 138,000 in 1997, a loss of 62,000 beds. For years I was warned by health authority officials that efficiency gains of 3 per cent. a year that had been demanded since the 1980s would eventually have a detrimental effect on local health services. As a result, beds have been lost and there has been an increase in bed occupancy and reductions in staff. The efficiency savings became cost-cutting exercises. The cumulative effect of those efficiency savings has been an increase in bed occupancy from about 70 per cent. to over 90 per cent., which leaves little capacity to cope with peak demand.

I shall now be a little controversial. I do not think that matters have been made any better—in fact, they may have been made a lot worse—by the new private finance initiative projects, which appear to result in the loss of further beds. We are told that bed numbers in those projects are agreed by health managers and independent experts. I have had a lot of experience—I am not being arrogant, because one of the first PFI hospitals in the country was at Durham.

It is not the so-called experts who make the decisions about bed numbers, but the financial consortiums. I know that from my own experience. The new university hospital

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in Durham opened recently and, for the six or seven years since the building of the hospital became a possibility, I was told that it would have enough beds. However, within a week of the hospital's opening, it was clear that it did not have enough beds, and that there was a severe shortage. That is not surprising. The number of NHS beds has fallen by around 2 per cent. a year since 1980, but admissions have risen by some 3.5 per cent. in the period. Given those statistics, it is no wonder that there is a bed shortage.

The NHS is under constant scrutiny by the PAC. As a consequence, there has been a significant improvement in management over the years. There is no doubt that, during the past few years, there has been a significant strengthening in accountability and performance monitoring in the NHS. That is partly due to the excellent reports that we receive from the National Audit Office, and the work that the Committee does. That may sound arrogant, but I believe that the PAC's work has helped encourage the improvements.

Government spending is not as straightforward as it was years ago. It used to be that only Government Departments spent millions or billions of pounds on services, but now executive agencies and quangos spend billions of pounds of public money every year. For the sake of continued accountability, efficiency and best value, the NAO and the PAC must scrutinise all public spending.

In the previous Parliament, we failed to persuade the Government to legislate to ensure that. However, Lord Sharman, who was commissioned by the Government to carry out a review of Government audit and accountability, has recommended that the NAO should be appointed automatically as the auditor of all newly created executive non-departmental public bodies—in other words, quangos. I was pleased with that recommendation, and I hope that the Government accept it.

That has already been happening in practice. For example, the NAO was given the job of auditing the new Learning and Skills Council and the Postal Services Commission. However, I believe that that appointment should have been automatic. In that way, Parliament would be able to ensure that all such organisations were accountable to it, and therefore that all public expenditure was accountable to Parliament.

2.52 pm

Mr. David Rendel (Newbury): When I rose in the equivalent debate in December 2000, I noted that there were so few hon. Members in the Chamber that I would have to speak for an awfully long time if the debate was to continue until 7 o'clock. On that occasion, I did not fill all that time, and you will be pleased to hear, Mr. Deputy Speaker, that I do not intend to continue today until half past six, or whatever time the winding-up speeches might be expected to begin.

It is perhaps a pity that so few hon. Members want to take part in this annual debate. After all, it covers a huge range of Government affairs, and it offers Members an opportunity to speak about a large number of specialist interests. I am sorry that more do not choose to do so. I am equally sorry that the debate does not seem to attract an enormous amount of attention from the press. However, perhaps that is just the way of things.

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Like the Committee's new Chairman, the hon. Member for Gainsborough (Mr. Leigh), and the hon. Member for City of Durham (Mr. Steinberg), I shall begin by paying tribute to Ken Brown, the PAC's former Clerk, who retired at Christmas. As the hon. Member for City of Durham said, he was an enormously nice man, but he was also extremely helpful. I probably bothered him with my questions about the workings of the PAC as much as anyone, with the possible exception of the Committee's previous Chairman, the right hon. Member for Haltemprice and Howden (David Davis). He always took the time to explain to me everything that I had to have explained, however idiotic my questions must sometimes have seemed.

It was great proof of the esteem in which Ken Brown was held in the House, and the respect that was felt for him, that so many hon. Members and others attended a farewell party for him on the Terrace. They had known him during his long service in the House, and valued the work that he had done. Not only that, but some who attended were aware that his father and grandfather had both acted as Clerks in the House. I hope that he has begun what will be a long and happy retirement, with many happy memories of this place as a result of the tributes that were paid to him on that day.

I also pay tribute to the PAC's previous Chairman, with whom I like to think I worked effectively during his period of office. I hope that I shall continue to work effectively with the new Chairman as well, but the right hon. Member for Haltemprice and Howden made a name for himself as a good Chairman, raising the Committee's prestige and increasing its influence in parliamentary and national affairs. It is to his credit that the PAC should continue to be held in the respect that has been its due for a long time. The Committee is an all-party body, and always reports unanimously. That is what gives it its strength.

I am pleased to be on the Committee, and the hon. Member for City of Durham made it clear that he felt the same. It is a good Committee, and I recommend membership to any Back-Bench Member, in government or opposition. Membership probably amounts to one of the most powerful positions available to people who are not in the Government, and I hope that other hon. Members will seek to become members of the Committee. I understand that some parties have not always found it especially easy to fill all the places on the Committee. Sadly, my party does not as yet have so many places to fill, so the difficulty is not so great. However, that may change in the near future.

I think that it is a great pity that we should have found it difficult sometimes to find members for the Committee. The PAC is a very interesting and powerful Committee to belong to. It is one of the few Select Committees in which Back-Bench or Opposition Members can make a real difference to the way in which things work, by influencing Committee recommendations that are then implemented by the Government. Normally, only Ministers can do that, but the PAC gives Back-Bench Members that power. That is why I recommend membership of the PAC heartily to those hon. Members who have not taken up the option so far.

As is true of all Committees, however, changes perhaps need to be made to the PAC. The Committee has been in place since Gladstone's day, and it may be time for us to rethink our way of working. I am delighted that the new

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Chairman has decided that we should all go on an away day to try to work out whether changes need to be made.

I suggested a number of changes in my equivalent speech a year and a bit ago, when we last had this debate in the House. Since then, more matters worthy of consideration have come up; among the issues then raised was the question of whether we need a second PAC.

As has been mentioned, the PAC is a very hard working Committee, which takes up an enormous amount of its members' time. It is possible that we should distinguish between bigger cases and smaller ones, with the second Committee discussing the smaller cases, and the main Committee discussing only those cases of really major importance.

I am sure that that proposal will be welcomed by the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb). He is one of the critics of the Committee to whom the new Chairman referred in his speech. When the hon. Member for Gainsborough talked about this particular criticism, I was sorely tempted to pretend that I was in some pantomime, and to shout, "He's behind you!" However, I resisted that temptation.

One criticism that I did not mention in 2000 is the sheer length of time that it takes for reports to come before us. Today, the House is discussing reports that appeared before the PAC a long time ago. The initial incentive for the NAO to draw up a report will have made itself apparent even before that, and we are talking about difficulties with Government policies that first arose two or three years ago. Those issues may well have been clarified and dealt with properly many months or even years before this debate began.

It is a pity that the process should take so long. A matter has to be pulled before the NAO, then the NAO has to investigate it and publish a report. That report then has to be the subject of a Committee hearing, then the Committee must look at the transcript of that hearing and prepare a draft report of its recommendations. That draft report has to be approved and sent off to the Treasury for its response. Finally, the Treasury's response is discussed in this annual debate.

It is a lengthy process. If we could find some way to speed it up, we could deal with some matters rather more quickly than we do at present.

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