Office for Value for Money

Treasury Committee

We now come to the Select Committee statement on behalf of the Treasury Committee. Dame Meg Hillier will speak for up to 10 minutes, during which no interventions may be taken. At the conclusion of her statement, I will call Members to ask questions on the subject of the statement. These should be brief questions, not full speeches. I emphasise that questions should be directed to the Select Committee Chair, not the relevant Government Minister. Front Benchers may take part in questioning.

It gives me great pleasure to make a statement on the first report of the Treasury Committee in this Parliament, and I again thank the House for giving me the honour of occupying this position. Our first report is on the new Office for Value for Money.

There will not be a single Member who does not believe in value for money for our constituents, who pay for Government services through hard-earned taxes that they give grudgingly to be spent well. As the Chancellor herself has been very clear, the taxpayer is not an automatic cash machine and every penny of taxpayer money needs to be spent as well as possible. The notion of value for money is one we would all support. We also need transparency, and that is a large part of the role of Select Committees: to shine a light on Government actions. This is our first public report shining a light on the work of the Treasury.

The Office for Value for Money is a short-lived, year-long body that is expected to have 20 staff, including secondees from the National Audit Office and the evaluation taskforce in the Cabinet Office. It is headed by a chair, who told us that it would conduct a small number of studies mainly on a cross-departmental basis to identify better value for money across Government. When we spoke to the chair in our hearing at the end of December, we found that although it was supposed to have 20 members of staff, it only had 12 and all were below director-general level, so not the most senior civil servants. That total of 12 and the ultimate total of 20 will include secondees.

It had not ruled out in December using external consultants to bolster the skills it will need to deliver on its work. It had not yet decided at the end of December into which areas it would launch studies, and nor had it set the parameters for evaluating its effectiveness. The Committee was clear that having a body with a name we would all agree with the principle of is not enough; we want to see such a body deliver for our constituents.

I congratulate the hon. Lady not only on her excellent chairing of our Committee and this report, but on securing a slot in the Chamber to tell people about some of the report’s recommendations. Her background as the former Chair of the Public Accounts Committee gives huge credibility to the points she is making about the possibility that this new and temporary body will not be able to make its mark in the way the Government hoped. One of the areas where my constituency has benefited most in value for money from public spending is flood defences. With her long experience, does she agree that protecting our communities from the impact of climate change is one of the best uses of public money?

The hon. Lady, the former Chair of the Treasury Committee—she still serves on the Committee—highlights a pertinent point. The chair of the Office for Value for Money said that it is not just about cash costs and that sometimes it might want to look at programmes that will save costs in the long run. However, that was still ill-defined, and we need to hear more detail, because that is the holy grail, really. If we can spend to save, that benefits our taxpayers in the long run in cash and, in the case of flooding in particular, it prevents something that is catastrophic for many communities.

I call the shadow Minister.

I join others in thanking the hon. Lady and her Committee for producing this report. Given the increasing pressures on public expenditure since the Budget, the report is timely. The picture it paints is that the Office for Value for Money’s remit is vague, its personnel are limited, time is tight and other established groups are already in place, and there is therefore concern that its efforts may dissipate. It is clear that it cannot do everything. The Chief Secretary to the Treasury is here, and I understand that the chair of the Office for Value for Money was clear that there are a few areas he will be looking at. Does the Chair of the Committee agree that it would be of value for those areas of investigation to be made clear and public, so that we can more clearly monitor where their impact could be felt?

The hon. Gentleman is saying what we said in the report. As a cross-party Select Committee of the House, we said that we need more detail about what will come. The chair of the Office for Value for Money was in front of us before Christmas, and we recognised that, given the body had only been established in October, he might not have all the answers, but we need those with dispatch, if this body is to be disbanded in October and is to contribute meaningfully to this spending review, although we recognise that would be challenging within the timeframe. If he is to lay down markers for genuine value for money and better spending by Government in the long term, we need precision. We have asked the Treasury for that, and hopefully it will respond to us in quick time—it has to respond to us, whether it wants to or not—with answers. We also need to evaluate the effectiveness in terms of whether, when the Office for Value for Money comes up with its studies and things, they will have to be taken on by the Treasury. We want to know the mechanisms for that and how the Treasury will prove to this House and taxpayers that the body has made a big difference.

Value for money in public spending is important to my constituents, who work hard for their money. In Scotland, under the Scottish National party, we have higher rates of income tax for anyone earning more than £29,000. The Government in Edinburgh and the UK Government that we have just finished with have indulged in some shocking wastes of money. Does my hon. Friend agree that it is essential for the Office for Value for Money to set out its suggestions for ways of securing value for money for future reference in both London and Edinburgh?

My hon. Friend highlights an important point that I have mentioned already. Our constituents give the Government their hard-earned money in the belief and hope that they will spend it wisely. It is important that the Treasury is clear about what it expects to get out of the Office for Value for Money and, as a result of that work, thereby proves to the House, voters and taxpayers that it is getting better value than it would have done had the Office for Value for Money not existed.

I congratulate the hon. Member on her excellent chairing of our Committee and on this excellent report. Given that the Office for Value for Money has only 20 staff and only 12 in post, whereas the NAO has 1,000, I share her concerns about whether it will be able to deliver value for money. What additional steps would she like to see taken to reassure the Committee that this body can offer value for money?

It is important that we know what the Treasury is expecting from this body. I am sure that the hon. Gentleman, who was at our session, will agree that the chair was straightforward with the Committee about the limitations of a body of this nature, which is time-limited and whose few staff are not very senior. I am not in any way denigrating the staff, who no doubt are working hard, but we need to be clear about what we are getting from the headline of the Office for Value for Money, an organisation that is small and lean, and about what it adds to the work of other bodies. I listed only a few such bodies, not all of those that are in place across Whitehall.

I thank the hon. Lady for her skilful and professional chairing of the Select Committee. I think all Committee members were straining to find the substantive additionality of this body; I am not sure that we totally convinced ourselves of what that was. I very much welcome the fact that the Office for Value for Money is a time-limited unit within the Treasury. I also welcome the fact that the Office for Value for Money intends studies in specific high-risk areas of cross-departmental spending.

The role of Chief Secretary to the Treasury is not easy, and I am sure that the incumbent would say that it has been made far worse by all his predecessors. Does the hon. Lady agree that one area that bears scrutiny is the future of the UK Health Security Agency at Porton Down? In September 2015, the then Chancellor suggested that it should move to Harlow. In 2020, additional investment was needed at Porton in a national crisis, and there remains enduring uncertainty over where that investment should lie. That is a classic example of what this body should be capable of doing, which is evaluating where future investment should be in the national interest.

I am sure that the hon. Lady would echo my concern that the lack of specificity around those specific areas of focus creates ambiguity. Would she welcome more clarity on what that focus would be over the last six weeks?

I thank the right hon. Gentleman, who is a fellow member of the Treasury Committee and a former Chief Secretary to the Treasury, for his question. We could have a whole debate about Porton Down and the animal health centre in Weybridge, where there was under-investment by his Government and challenges on his side, but we are not here to make party political points.

There are areas of under-investment, but the lack of specificity and the duplication issues are key concerns, as is reflected in our cross-party Treasury Committee report. There is a danger that unless this new body narrows its focus soon, it will not be able to deliver in time to aid the current Chief Secretary to the Treasury in his work of ensuring that Departments deliver on the spending review and come up with the proposals that provide the best value for money for the taxpayer. We need that clarity. The Government should welcome this report, because it gives them an opportunity to seek greater clarity from this body to aid the challenging spending review process.

It seems that the Chair of the Treasury Committee has come to the firm conclusion that the Office for Value for Money is itself not value for money. In carrying out her investigation of this body, which appears to have been set up only for a very limited period, she must have asked it what its terms of reference are, why it has been set up only for a limited period and what it is intended to achieve. My guess is that the answer has something to do with the ability to search just about anywhere across the spectrum for any project that causes concern. Did she get an answer of that sort? She must surely have got some sort of answer.

I thank the right hon. Gentleman very much, although I should stress that it is not my evaluation but the Committee’s. We were unanimous in our concerns and unanimous in our desire to see taxpayers’ money spent well. We asked questions of the Office for Value for Money’s chair. Our report reflects the areas that he might consider looking at, especially areas in which there is great risk and areas of cross-departmental working.

There has been a move over the years to get more cross-departmental or joint departmental bids into the spending review, but that has not really got traction, because we have a terribly siloed culture in Whitehall. That is a big challenge, and the current Government—of my own party, of course—have the missions, which aim to bring things together. The chair said that he would be looking at some of that, but that is quite a lot to do in the timeframe available: the bids and cross-party working areas have to be identified, those Departments have to co-operate and the office needs the resource to look at where the issues are. With only 20 staff in total—there were only 12 when we had our hearing with the chair, but there are probably more now—that is a stiff ask. It would be helpful for Treasury Ministers to sit down with the Office for Value for Money and push it to come back with the exact areas that it proposes to look at and that will be most useful to the Government to deliver value for money.