Set up new departmental spending watchdog, urges former member of the Public Accounts Committee

Wasteful expenditure on government projects could be reduced by setting up a new parliamentary watchdog to vet departmental spending plans, a former member of the Public Accounts Committee has argued.

Giving evidence to the House of Commons Procedure Committee, which is investigating the case for setting up a Budget Committee to exercise detailed scrutiny over departmental budgets, Richard Bacon MP said such a body could help to rein in over-spending on projects like the notorious NHS national IT programme.

The idea of a Budget Committee was championed by MPs Sir Edward Leigh and John Pugh in a joint report, commissioned by the Treasury, in 2011.

Bacon said the new committee would require between 25 and 30 expert staff, who would be paid out of the parliamentary budget like the National Audit Office, which supports the PAC.

He told the procedure committee last week that in the United States, the President’s Office of Management and Budget provides effective scrutiny for government spending with around 200 staff.

Responding to MPs' concerns about value for money, Bacon said the new body would more than pay for itself by preventing much more costly and wasteful over-spending.

Bacon, who served on the PAC from 2001 to 2015, said £2.7bn out of the eventual £12.4bn bill for the NHS IT programme could have been saved if there had been more robust mechanisms in place to scrutinise the project.

“If there had been more and earlier public attention, that expenditure might have been successfully hindered,” he said, adding that contracts had been signed for the NHS IT programme before the government had known what outsourcers should be providing.

This fiasco, the Norfolk MP said, was an example of how “quite often huge amounts are wasted” because projects have not been “thought through properly”.

“It is routine that things get launched before they are ready in order to fill a line in a party conference speech,” he said.

Bacon highlighted the eight reports that the NAO had conducted into the delivery of the Olympic Games as an example of how ongoing scrutiny could assist in the delivery of government projects.

“If there were more high-quality scrutiny of public expenditure earlier it would result in better value for money for taxpayers, fewer projects going wrong and would be of general public benefit.”

But PAC chair Meg Hillier said that the “jury is out” on whether a Budget Committee is needed. She said it made sense for departmental select committees to scrutinise accounts because they were best placed to make connections between spending and policy.

She also queried whether the proposed committee would be resourced sufficiently well or attract enough MPs to carry out its job properly.

But Hillier told the procedure committee that ministers lacked a detailed grasp of departmental expenditure.

Clive Betts, chair of the Housing, Communities and Local Government Select Committee, said one of the major hurdles his committee faced when scrutinising spending was getting Treasury ministers to give evidence.