Contingencies Fund (No. 2) Bill

Nigel Evans Excerpts

Committee of the whole House & Committee stage
Thursday 11th March 2021 Commons Chamber

[Mr Nigel Evans in the Chair]

[The Second Deputy Chairman of Ways and Means (Mr Nigel Evans)]

Before I ask the Clerk to read the title of the Bill, I should explain that, in these exceptional circumstances, although the Chair of the Committee would normally sit in the Clerk’s chair during Committee stage, in order to comply with social distancing I will remain in the Speaker’s Chair, although I will carry out the role not of Deputy Speaker, but of Chair of the Committee. We should be addressed as Chairs of the Committee rather than Deputy Speakers.

Clause 1

Temporary increase in capital limit of Contingencies Fund

Question proposed, That the clause stand part of the Bill.

[The Second Deputy Chairman]

With this it will be convenient to discuss the following: 

Clause 2 stand part. 

New clause 1—Contingencies Fund: reporting in financial year 2021-22—

“(1) The Treasury must lay before the House of Commons within 15 days of the end of each calendar month in the financial year 2021-22 a report which includes a complete list of each advance from the Contingencies Fund, in each of the following categories—

(a) during the Vote on Account period, to meet urgent cash requirements (other than supporting a new service) in excess of the net cash requirement granted in the Vote on Account;

(b) to meet the cash requirement supporting an urgent service which Parliament has already approved through specific enabling legislation but for which existing provision is not available;

(c) to meet the cash requirement supporting a new service which is urgent and cannot await Parliamentary approval of both the specific enabling legislation and the necessary Estimate;

(d) to meet a further urgent cash requirement for existing services when provision for the total net cash requirement on the Estimate is exhausted; and

(e) in the case of an Estimate where expenditure is largely financed from income, advances made in anticipation of the receipt of cash associated with such income.

(2) The report under subsection (1) must include a reference to any written ministerial statement made to the House of Commons in relation to each advance from the Contingencies Fund in financial year 2021-22.

(3) The report under subsection (1) must include any relevant formal written direction to the accounting officer where a Minister of the Crown decided to continue with a course of action which the accounting officer had advised against.

(4) If a report under subsection (1) mentions in relation to subsection (2) or subsection (3) anything in connection with procurement from the private sector, the Treasury must refer the matter to the Comptroller and Auditor General for a preliminary opinion on the regularity and propriety of the procurement referred to.

(5) Nothing in this section affects access by the National Audit Office to any documents as provided for under section 8 of the National Audit Act 1983.”

This new clause is intended to enhance accountability to Parliament for as long as the increased flexibility of the Contingencies Fund is in place, and in particular to provide an additional check on the regularity and propriety of any procurement decisions which lead to advances being required from the Contingencies Fund.

[James Murray (Ealing North) (Lab/Co-op) [V]]

The new clause is intended to ensure that the Government learn from the past year and, as I set out in my earlier contribution, not only recognise that they have repeatedly done too little, too late to protect the public’s health and the economy through the outbreak, but make serious and structural reforms to how they initiate and examine the spending of public money. The new clause would ensure that the extra financial freedoms that Parliament grants in the Bill are used in a manner that reflects the importance of transparency with public money.

I shall not repeat the arguments that I and other hon. Members made on Second Reading, but address the substance of the new clause. Our new clause is simple. Subsection (1) sets out that, in respect of each plausible category of unforeseen Government spending—urgent cash requirements for existing services; urgent cash requirements for new services, whether yet approved in principle or not; increased cash requirements; and short-term cash flow issues—the Treasury must lay before the House a report of all the advances made that month.

Subsection (2) sets out that each payment from the fund should be explicitly associated with ministerial statements, which explain the purpose of such expenditure. Subsections (3) sets out that where such payments have been carried out only on the basis of ministerial direction, the fact and nature of that direction should also be disclosed. We fully accept that on occasion ministerial directions are a vital part of how our country and political system responds quickly and effectively to unforeseen circumstances. There are occasions when the accounting officer will not be able to align urgent needs with normal accounting procedures. What matters is not the fact of the direction, but its nature.

Subsection (4) ensures that where rapid procurement decisions are taken, they provide an opportunity for the Government to improve and are assessed as such. The role of the Comptroller and Auditor General is crucial in our system of parliamentary control over public finances. There are lessons to be learned from the specific practice of emergency procurement. It is wrong to see each instance of rapid procurement as a special case.

Subsection (5) reflects the premise of subsection (4) and ensures that there is no conflict with the wider role of the National Audit Office. I very much hope that the Government will feel able to accept the new clause in the spirit in which we propose it.

The Financial Secretary will be aware of the many extraordinary and frankly irregular arrangements, which have been explored in the court and in the media recently, for the disbursement of public money in the past year. I will not take the Committee through the full annotated catalogue as time is so limited, but I will mention just two of the most egregious examples to emphasise our concerns.

First, there was the contract given to Randox Laboratories for £133 million in respect of tests. Randox is a company that we understand is advised by a Conservative Member. The Department of Health and Social Care ordered that 750,000 of those tests be withdrawn from use for safety reasons. Secondly, at least £150 million of a £252 million face mask contract with Ayanda Capital seems to have been wasted owing to the unsuitability of one type of mask in the order. We understand that the contract included FFP2 masks, which did not meet requirements for use by frontline healthcare workers because they had ear loops instead of head loops. The sum of £150 million pays the salaries of some 4,000 nurses. That fact alone should make clear why it is so important for public money to be spent on improving the lives of those we serve.

The new clause sets out a new standard of transparency that would pull Ministers up, force them to sharpen their focus on value for money, and ensure that we have more money to spend on the things that matter to us all. With such concerns in mind, I ask the Committee to support the new clause.

[The Second Deputy Chairman of Ways and Means]

Before I call Andrew Jones, let me just say that I am grateful for the restraint that people demonstrated on Second Reading. We have a rather extensive call list for the International Women’s Day debate that follows, so if people could show the same restraint in Committee, whether they are remote or in the Chamber, I would be grateful. A number of people withdrew from the Second Reading debate; if anyone wishes to withdraw from Committee stage, please will they do so in the normal manner, through the Speaker’s Office?

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Finally, of course we need to improve procurement. In December, an excellent Green Paper was published. It was all about value for money, transparency, the cutting of red tape and, crucially, making it much easier for small and medium-sized enterprises to get involved in the procurement of public sector contracts, even to the extent that there would not have to be the international competition that the EU rules used to require and we could have geographical conditions and thereby benefit SMEs in a local area. I absolutely support that approach. There are lessons to be learned and there is room for some really good reform, but the new clause should not be supported.

[The Second Deputy Chairman of Ways and Means (Mr Nigel Evans)]

The next speaker, by video link, is Jamie Stone. [Interruption.] Jamie, you may be on mute—I know that you are audio only. [Interruption.] We will try to get back to you. Waiting in the wings is Meg Hillier.

[Meg Hillier]

It gives me pleasure to rise to speak on the Bill and perhaps slay some of the misstatements that I have already heard in the short while I have been in the Chamber.

First, I should point out to the hon. Member for South Cambridgeshire (Anthony Browne) that value for money in respect of taxpayer spending is not a new-found interest for most of us on the Opposition Benches. I have spent 27 years being responsible for either spending taxpayers’ money wisely or scrutinising that spending. I am very aware, as are the shadow Chancellor and her team, that every pound of public money saved is a pound to spend on something else. We may disagree about what that something else might be, but scrutiny is really important.

Contingencies Fund Bills are interesting pieces of legislation. They are about as old as the Public Accounts Committee, which I chair, and are an important mechanism for making sure that the Government cannot just routinely spend over budget. It is fair to say that in this House we are very bad at scrutinising Government spending. That is not down to individual Members or the official Opposition; it is because the structures of this place do not allow us properly to discuss estimates, excess votes and so on. In fact, some time ago the OECD said that as early as the 18th century our scrutiny of finances in this place was “reduced to hollow ritual.”

The change in this legislation, which will allow the increase in contingency funding, has been rushed through. I do not deny that it is necessary to have additional contingency. The way it works normally is that if a Department overspends on its budget as granted, albeit inadequately, by this House, the matter then comes to the Public Accounts Committee and we have to examine whether the excess is justifiable and reasonable. Pretty much our only weapon is the ability to call in the officials who have made a mistake and get them to explain the issue in public, but then a Government majority can certainly agree the excess vote regardless.

In Ghana—Mr Evans, you might be interested to know this, and officials might be quaking as I say it—if an official overspends taxpayers’ money, they have to go to court, and if they take an appeal to court, they have to pay up front half of the money that has been wasted. Certainly, that would sharpen minds.

The point is that it is right that we have a Contingencies Fund Bill. I accept it is necessary, but I welcome new clause 1, because the mechanisms for oversight of this are very flimsy; they are reports on paper after the event. This is not about more bureaucracy. I see it as being about greater transparency. As Chair of the Public Accounts Committee, which has had an important constitutional position in this place for 160 years, I get passed information by Government—from Ministers and senior officials—about issues relating to the finances of Government, sometimes confidentially, and that is counted as the scrutiny of Parliament.

I believe there is a very important role for the constitutional position of the Public Accounts Committee and thereby the Chair, a role I am privileged to occupy at the moment—it is not about me, it is about the position—but that is not enough scrutiny. We are in the middle of a pandemic, and spending eye-watering sums of money—hundreds of billions of pounds—with the public sector and the private sector. It does not matter where the money goes, in this sense; it is about scrutinising that expenditure and making sure that Treasury Ministers, whom I would have thought would be aligned with me completely on this issue, are clear that we are not allowing Departments to overspend willy-nilly. Although the Treasury has its checks, it is important and vital that Parliament has its checks too and that we have sunlight on these issues in real time. This is important, and I would say that the new clause is really pretty anodyne. It is saying that we want better reporting to the House of what the Contingencies Fund Bill already allows to the Government.

The National Audit Office has been much quoted, and I do not have the exact phrase in front of me—forgive me, Mr Evans, but for once I paraphrase, which I really try not to do—but the NAO has looked in detail, as other Members have commented, at the Government’s approach to procurement, and this is its clear message. All these allegations are out there, but part of the reason for that is the lack of transparency and the lack of information being published in real time on some of these issues. We have seen, heard and talked about in this place the many contracts that were not published on time, and that undermines public and parliamentary trust in the process. Whether or not anything has gone wrong, it is undermining trust, and people start asking questions and laying down allegations whether or not they are true.

It is in Government’s interests, the taxpayer’s interests and Parliament’s interests to agree to this new clause. I am disappointed—I am embarrassed really—that those on the Treasury Bench can come forward with a change at such short notice and not have a meaningful discussion about what is a reasonable new clause to allow this place greater scrutiny over what are unprecedented amounts of spending in the middle of a pandemic. At a time like this, we need more transparency, not less. This is actually a minor change. It is not about bureaucracy; it is about accountability and transparency, and taxpayers deserve better.

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Bill read the Third time and passed.

[Mr Deputy Speaker (Mr Nigel Evans)]

We will now suspend for three minutes for sanitisation of the Dispatch Boxes, and to allow the safe exit from the Chamber of those leaving and the safe arrival of those entering for the next debate.