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Mr. Rendel: The hon. Gentleman mentioned one of the unsatisfactory answers that we received in the hearing. Does he agree that we received another unsatisfactory answer when we asked the chief executive whether there were any cases in which clinical authority was put behind management authority in priority in order to meet the targets? The chief executive said that he thought that no such case ever arose, but it seems entirely illogical to suggest that one can try to meet a management target of shortening waiting lists without making it more important than the clinical target.

Mr. Osborne: The hon. Gentleman is absolutely right. Of course, that is exactly what happened in many hospitals and with many consultants, as they freely admit. The examples are legion.

In conclusion, the setting of arbitrary targets and the creation of arbitrary incentives in the civil service will give rise to a range of perverse incentives, manipulations and distortions. That is human behaviour. It is very bad for public administration and can cause a gross breach of public trust, as the NAO found in terms of waiting lists. That has been one of the most valuable lessons that I have learned while serving on the Committee. We should continue to focus on the proliferation of Government targets. We must see how they are working in practice, how they were arrived at and the cost of trying to meet them. I look forward to doing that work and much other work on the Committee.

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4.28 pm

Mr. David Lidington (Aylesbury): It is a great pleasure to respond to the debate on behalf of the Opposition and to congratulate the Committee. In particular, I congratulate its Chairman, my hon. Friend the Member for Gainsborough (Mr. Leigh). I also congratulate those who have spoken: the hon. Members for City of Durham (Mr. Steinberg), for Croydon, Central (Geraint Davies) and for Newbury (Mr. Rendel), and my hon. Friends the Members for South Norfolk (Mr. Bacon) and for Tatton (Mr. Osborne). I want to begin by reassuring them, as some of them expressed concern about whether they might have been speaking for too long. We must remember that it was the late Mr. Gladstone himself who founded the Public Accounts Committee. He would have regarded even the 60-minute speech of my hon. Friend the Member for Gainsborough as a mere oratorical morsel and an introduction to some great speech that would have flown from his lips in the days when he stood in the Chamber.

I want to add to the plaudits that many hon. Members have given my right hon. Friend the Member for Haltemprice and Howden (David Davis), the former Chairman of the PAC, and to the Committee staff, its former Clerk, and the Comptroller and Auditor General and his staff—the 750 accountants whom the hon. Member for City of Durham mentioned. Their expertise and skill enable members of the Committee, as they will be the first to acknowledge, to place senior civil servants under intense and searching scrutiny in open session.

The PAC's work could be summed up as demonstrating the true ethic of public service. The speeches that we have heard from all parts of the Chamber show a commitment to search for examples of success, but also of failure, in order to seek remedies so that the people who send us here to represent them receive better quality public services in future.

The debate revealed some interesting lessons from the PAC's experience that are relevant to the development of the Select Committee system. As several hon. Members have pointed out, the PAC is bipartisan or, indeed, tripartisan. Since taking on my current Front-Bench responsibilities, I have attended several PAC sessions. However, unlike the Financial Secretary, I have to be content with a seat in the one-and-nines at the rear. I have noticed that questions from Committee members are always courteous, but also insistent, relentless and thorough.

The reports of the Committee and of the National Audit Office are written in lucid English, and render even the most abstruse topics of public administration comprehensible to inexpert minds such as mine. Fashionable jargon, such as "synergy" and "roll-out", is thankfully absent. The Committee is always well briefed. As the hon. Member for City of Durham said, the PAC has clout because it has resources, back-up and expertise that are not available to the departmental Select Committees. Perhaps hon. Members might like to reflect on that.

The need for a partnership between the PAC and the departmental Select Committees is a theme of the Sharman report, to which several PAC members have alluded. That message was implicit in several speeches. My hon. Friend the Member for Tatton spoke of the enormous variety of inquiries that the NAO and the PAC carried out. The hon. Member for Newbury also drew

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attention to that. When I was asked to respond to the debate and went to pick up the relevant papers from the Vote Office, I was aghast to receive a pile of about 20 different reports. However, as my hon. Friend said, they provide a crash course in the workings of government.

The PAC cannot be expected to do everything, however, despite the undoubted importance and wide-ranging nature of its work. That suggests that there should be a method of bringing together the work of the PAC, the departmental Select Committees and, for example, the Environmental Audit Committee. When my hon. Friend the Member for Tatton mentioned arbitrary environmental targets, it occurred to me that that was being considered not only by the PAC but by the Environmental Audit Committee, albeit from a slightly different perspective.

Several hon. Members referred to the PAC's report on discharging patients from hospitals. That is standard PAC territory; good management makes a genuine difference to handling such discharges.

Geraint Davies: The NAO has a remit that covers almost everything, whereas that of the PAC is to focus on specific items that we believe to be problematic. Hence we are able to cope with a vast amount of work without support.

Mr. Lidington: The hon. Gentleman makes a reasonable point. I am the last to argue that the PAC should try to narrow its interest or inquiries. In the previous Parliament, I served with the hon. Member for City of Durham on the Education and Employment Committee, and I share some of his frustration about the way in which members of a departmental Select Committee could labour for a long time on a report but feel that the effort was, if not worthless, then ignored by the Government of the day, of whichever political colour. I contrast the Government's approach to departmental Select Committee reports with that to PAC interrogations and reports. By "Government", I do not simply mean Ministers.

Bed management can make a big difference to hospital discharging. My hon. Friends have pointed out other aspects, and the availability of care beds was the most telling example. Such considerations inevitably lead to policy; they are not confined to management. There are therefore roles for different Committees in trying to get to grips with complicated problems.

I want to tackle two or three themes that have emerged from the debate. My hon. Friend the Member for Gainsborough drew attention to the PAC's prime duty of trying to monitor and improve the quality of financial management throughout the public sector. I agree with the importance that he placed on that task and his strictures on the need for timeliness in providing accounts. Unless that is done, no adequate scrutiny or check can be carried out on the quality of the financial management.

Several hon. Members spoke about their belief that the civil service does not always rate project management experience as highly as policy experience. My days as a special adviser go back a few years. Then, the highest fliers in a department tended to be given jobs in policy-making, not management divisions. I hope that the Financial Secretary can say that that is no longer the case

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and that a mix of policy and management roles is regarded as a desirable part of the most talented civil servants' career paths.

Good management can make a real difference to the quality of service, as we have seen in the Committee's reports on hospital admissions and bed management, on hip replacements, on managing the reduction in the number of vacant family quarters in the armed services and on the administration of the Siemens partnership with the Government.

This raises a difficult question, however. When I was listening to the comments of the hon. Member for Croydon, Central about hygiene in hospitals, and the need to crack down on the problem of hospital-acquired infection, I felt—though I may have interpreted him wrongly—that he was placing a great deal of faith in central direction and centrally imposed targets. There clearly need to be proper scrutiny and audit, but any Government will need to strike the difficult balance between trying to impose targets and standards with the noble aim of driving up the quality of service that the public experience, and avoiding the risk of sapping the ability or willingness of those who manage the services locally to take initiatives to innovate and to develop a culture of responsibility down at the sharp end. There is always a risk of eroding a sense of local ownership of those responsibilities for the highest possible quality of service delivery.

Geraint Davies: I was simply trying to make the point that minimum standards of hygiene are essential to avoid a massive outbreak of infection that could kill many people. We found substantial variation in those standards, and we need to raise them. That being said, there are clearly grounds for local enterprise and innovation to push forward the best practice benchmark.

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