NAO blocked from scrutinising Whitehall performance indicators as government refuses proposal

Economic secretary Melanie Johnson flatly refused to accept a committee-proposed amendment enabling the National Audit Office to investigate and validate departmental performance indicators.

It was the second serious setback for the powerful all-party investigatory committee which has opened a `second front’ in the legislative committee debating the Government Resources and Accounts Bill.

She previously refused an amendment requiring departments to produce cash flow accounts – the equivalent of private sector profit and loss accounts – after the switch over to commercial resource accounting procedures.

Johnson has also made it clear she does not share PAC concerns to give some statutory underwriting to the independence of the Financial Reporting Advisory Board set up to scrutinise Treasury-proposed changes to Accounting Standards Board standards to reflect public sector circumstances.

She has agreed to talks with PAC members – but rejected a Tory bid to set up an independent National Accounts Commission.

Johnson claimed probing performance information would inevitably take the Comptroller and Auditor General into the political arena and damaging his and the PAC’s credibility.

She said the matter was not straightforward, taking the example from PAC Chairman David Davis of checking whether the Government have met the target of increasing day nursery places.

She said this would involve Sir John Bourn’s staff intruding in to local authority and private sector nurseries to form a judgement.

She said the Government recognised the need for accurate performance information and promised quality checks would be made by internal auditors, and the Treasury were working with the NAO.

She said: ‘Clearly, targets that the Government set for themselves are outside the C&AG’s scope as a matter of policy, but it is proper for him to consider target clarity and the accuracy of outturn information.’

Davis retorted that the central issue ‘is the role, rights and powers of Parliament’ and accused the minister of ‘unacceptably’ seeking to bypass Parliament, He referred to ‘a pack of excuses’ and accused her of taking the ‘mandarin line’.

Liberal Democrat spokesman Edward Davey said it was essential for promoting efficiency ‘that someone outside the bureaucracy checks the figures’.

But the amendment was defeated by eight votes to six. Johnson did propose an amendment to bring departmental treatment of VAT receipts on business resources into line with the SSAP5 in the private sector – requiring the netting off of VAT instead of the existing practice of paying all receipts into the Consolidated Fund.