Plans for increased localism in public services do not provide the ‘necessary assurance on either probity or value for money’, the Public Accounts Committee said today.
MPs found that the government’s public sector reforms, which include increasing the number of foundation trusts and academy schools and introducing elected police commissioners, lacked ‘clarity, consistency and completeness’.In a follow-up of their examination of the reforms last April, Accountability for public money progress report,the MPs accepted that departments faced ‘a significant challenge in developing appropriate accountability arrangements for localised services’. However, they reiterated that accounting officers remained ‘accountable to Parliament for funds voted to their departments’.
As part of the government’s response to the first report, departmental accounting officers were asked to produce accountability system statements setting out assurance arrangements.
The committee examined four draft statements and concluded that the departments had made a genuine effort to reconcile accountability and localism.
However, they found the statements were ‘unwieldy’ and that ‘considerably more’ needed to be done ‘to improve their clarity, consistency and completeness’. All departments are expected to produce one by this summer.
Accounting officers will have to rely on a mix of local accountability mechanisms, information systems, and inspection and oversight bodies to gain the necessary assurances for public spending. But the MPs said that ‘further definition’ was needed on how the local accountability mechanisms will work in practice.
Specifically, committee chair Margaret Hodge highlighted a need for ‘greater confidence… in the capacity and skills of oversight bodies’.
She added: ‘The effectiveness of oversight bodies is hugely important. Yet our recent report on the Care Quality Commission found that a great deal needed to be done to ensure a regulatory body that was fit for purpose.
‘The mandates of regulators, inspectors and funding bodies are often unclear and their responsibilities are growing as their funding diminishes. We saw this in our recent review of the CQC, which is still falling short of being fit for purpose.’
The PAC also reiterated previous concerns that local stakeholders were likely to focus on service quality rather than on cost or value for money. There is ‘a lack of clarity’ about what would happen in such circumstances, the MPs found, and who would be responsible and accountable for public funds.
Hodge said: ‘It is critical that Parliament and taxpayers are able to follow the taxpayer’s pound to ensure probity and value for money. To date, the arrangements which reconcile accountability and localism do not provide the necessary assurance on either probity or value for money.’
She outlined four key points that should be in accountability system statements. These are: the availability of good data; effective intervention mechanisms in case of failure; good whistleblowing protocols; and high audit standards.
