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Interview Jeremy Colman The WAO factor

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15 April 2005

The new Wales Audit Office carries huge audit and regulatory responsibilities, but its first auditor general is more than ready for this wider role, he tells Joseph McHugh

It is supposed to be a joke. Each week the Daily Telegraph scours recruitment advertisements for a public sector job it regards as frivolous and unnecessary and then lampoons it in a weekly column called Non-job of the Week.

The aim is to show that the extra billions of pounds the government is ploughing into public services are being squandered on pointless jobs in pointless organisations.

But it seems that the newspaper has inadvertently been providing a sterling service to public bodies, bringing their staff vacancies to a wider audience.

It is how Jeremy Colman, the new auditor general for Wales, got his gig. Last September, during his daily commute into London, he read the column. That day it happened to be mocking an advert for someone to run the new Wales Audit Office, to be based in Cardiff.

'I saw the job being ridiculed, I read the advert and I thought, "oh, that actually sounds very interesting, I'm going to apply for that", so I did,' he explains.

Fast-forward seven months and Colman has just started his 'non-job' at the WAO, which opened for business on April 1.

It was formed by the Public Audit (Wales) Act 2004 and combines the responsibilities of the National Audit Office in the principality with those of the Audit Commission in Wales. The new body, which will submit its reports to the audit committee of the National Assembly for Wales, is intended to reflect the post-devolution reality of public services.

'The concept is one of following the public pound wherever it goes, and that has been carried through in the legislation,' Colman says. 'The powers that I have are very good.'

When we meet, Colman has been in post just six days, so the WAO's mission statement is still in embryonic form. But he has already formulated the twin objectives it will encapsulate.

'This organisation is about two things. One is the very important function of holding public servants to account for the proper conduct of business. The other, just as important, is being a force for and a source of improvement in public services.'

As head of the WAO, Colman is responsible for auditing the Assembly, its associated bodies and NHS bodies in Wales, as well as appointing auditors for local authorities.

He is also charged with conducting value-for-money studies for health and local government and is the principal performance inspector for councils. In all, Colman has oversight of £19bn in public expenditure annually.

So it is no surprise that, after a 12-year stint at the NAO – where he was an assistant auditor general with particular responsibility for the Private Finance Initiative and public-private partnerships – the 57-year-old was attracted to the top job.

For Colman, the wide-ranging brief and degree of autonomy is a 'wonderfully exciting opportunity' to put into practice the ideas he formulated while at the NAO.

'There's a risk with auditors that they see their jobs as following their procedures. The law says we have to audit the accounts, so we will audit the accounts – end of responsibility.

'But I have always been in favour of external audit helping public bodies to improve. Auditors are doing it for a purpose and the purpose is partly assurance. But a big part is also improvement. And this job is an opportunity to put that into practice.'

In early meetings with the chief executives and politicians who will be regulated by the WAO, Colman says they have been 'very welcoming' and has detected none of the 'disbelief' that sometimes greeted his offers of help in Whitehall.

He intends to capitalise on this goodwill by ensuring that his organisation's activities actually serve a useful purpose. Obvious, maybe, but sadly lacking, according to critics of inspection regimes elsewhere in the UK.

'I am a very strong advocate for an institution like this having a strategy that is not just something that looks good, but which is usable by us day-by-day as a set of criteria to judge proposals for specific projects. A programme of work is incomplete unless it relates every item on it to a stated strategy.'

But the strategy will not be overly prescriptive. Before joining the NAO, Colman was a partner at Price Waterhouse and head of its corporate finance practice in the Prague office. The experience of living in a former communist country has left him 'a bit allergic to five-year plans'.

When it comes to deciding the WAO's future priorities and work schedule Colman is jealously guarding his statutory independence, vowing several times in the course of the interview to protect it.

Welsh government ministers should take note. During his NAO years, Colman demonstrated an independence of spirit that must, at times, have had ministers in London concerned, to say the least.

In 2002, for example, he described the public sector comparator, used to show that individual PFI projects are value for money, as 'pseudo-scientific mumbo-jumbo'. It was not exactly music to the ears of the Treasury, which was – and remains – keen to promote its use.

Colman has no intention of softening his approach in Wales. 'I will be absolutely independent of the Assembly in my work on local government, as indeed I will be in my work on central government,' he says.

'I should certainly have failed very badly if, in a year's time, anyone can reasonably say – "that auditor general, he's just the National Assembly's nark".'

At the same time, he vows to be scrupulous in not exceeding his duties, functions and powers and will not 'get drawn into the political sphere'.

But the potential for friction is certainly there, particularly as the Assembly has drawn up its own Gershon-style efficiency programme, called Making the connections. The strategy, which went out to consultation earlier this year and should be published in final form shortly, sets Welsh public bodies a target of £600m savings by 2010, with at least half being delivered by 2008.

Like Sir Peter Gershon's recommendations, much of the Welsh savings are expected to be achieved by getting councils, NHS trusts and quangos to join up back-office functions, undertake better procurement and engage in more partnership working.

But unlike Gershon, where there will be no independent scrutiny of the savings claimed by departments, the WAO and other regulators will have a significant role in monitoring and validating savings. Consequently, Colman's ability to forge fruitful relationships with public bodies across Wales will be crucial.

Unsurprisingly, he fully endorses the principles underlying the strategy – after all, what auditor could possibly object to the more efficient use of resources? But he divines a possible tension arising from the WAO's scrutiny role, and adds a significant caveat. While he supports the aims, he reserves the right to criticise the means that are used to achieve them.

'That's not a wrecking amendment, it is possible to do both,' he explains.

'At some point, the Assembly government will have to implement the strategy with actions, and it will be my job to scrutinise those actions and potentially say, "that was a very funny way of going about it". '

Assembly ministers and public bodies should expect no less. After all, as Colman says: 'Powers are there to be used.'

PFapr2005

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