Row as government defends Whitehall mandarins against public sector audit chief

Ministers refused to accept that Sir John Bourn, Comptroller and Auditor General, and the National Audit Officeneed to follow taxpayers’ money wherever it is spent to ensure fraud andcorruption do not take hold.

Economic Secretary Melanie Johnson was at one point forced to deny there is aconspiracy in the Treasury ‘to deflect or obstruct public interest in properscrutiny.’

She pledged the government to consider what changes can be made administrativelyto ensure NAO access – but not by means of the Government Resources and AccountsBill.

It was the latest in a series ofmajor defeats of proposals put forward on an all-party basis by Public AccountsCommittee chairman David Davis with the support of senior Labour PAC member AlanWilliams and backing outside the committee from Public Accounts CommissionChairman Robert Sheldon, a former Labour PAC Chairman.

Johnson claimed despite statements to the contrary: ‘We believe that, generallyspeaking, the C & AG has the access that he requires to do his job.’

She said where access was needed to private sector bodies it could be secured byadministrative means and she spoke of ‘the dangers of closing down innovationand risk taking’ and of duplication of effort where other auditing bodies wereinvolved.

But Davis said these were ‘greatly over-stated’ and were ‘an excuse byTreasury mandarins because they do not like the exposure that is given to theirfailures.’

He said: ‘There may be good reason for not involving the NAO in various areasbut in the end the risk of money being misspent on a huge scale under agovernment who are ever more diverse in their method of delivery is greater thanthe risk of generating a risk-averse culture among the vehicles of delivery.’

He said the reason for re-wording the C&AG’s scope is the switch by thegovernment of service delivery to the private sector.

Williams reported on a catalogue of scandals involving the private sectorranging from a Government caterer employing ‘ghost workers’ in a NationalInsurance scam concerning £250,000 to the arranging of shipping contracts duringthe Gulf War worth £250 million.

He said: ‘Fraud is corrosive and it spreads.’

Liberal democrat David Rendel mad it clear his party also supported the general principle’that, without exception, the C & AGhasÿaccess to and powers of audit over all Government spending, whoever it maybe spent by.’

Not a single Labour backbencher argued in support of their government: but withthe exception of Williams they voted – by ten votes to eight – against the PAC.

NAO blocked from scrutinising Whitehall performance indicators

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