Government Resources and Accounts Bill — 6 Dec 1999

Order for Second Reading read.

I beg to move, That the Bill be now read a Second time.

The Bill is a major milestone on the way to full implementation of the biggest reform and modernisation of the management of the country's public finances since Gladstone's time. Resource accounting and budgeting is a vital part of our modernisation agenda and demonstrates the Government's commitment to introduce best practice accounting methods in line with the code for fiscal stability.

Before I go into the detail of the Bill, let me say that it is good if we can describe what Parliament does in everyday terms, wherever possible. That is, I have to say, more of a challenge with this Bill than it is with most. We are shifting the focus of how we plan and judge Government spending from looking at the cash that we spend each year to looking at what the public get for their money in that year. We are looking not only at the supermarket receipt, but at what is in the shopping trolley.

Cash controls will, of course, remain, but we shall also have proper measures of the resources used up, not just of the money spent. The accounts will be more recognisable to those familiar with private sector accounts; for example, the equivalents of profit and loss, cashflow and a balance sheet. One could say that we are putting the Government's accounts on a more business-like footing.

The Bill delivers four major reforms. First, it introduces resource accounting and budgeting into the Government accounts and modernises the operation of other aspects of the Exchequer and audit Acts. Secondly, it improves the way in which Parliament votes on and scrutinises public spending, with proper measurement of the full economic costs of Government activities, better treatment of capital spending and systematic reporting of the allocation of resources to objectives.

Thirdly, the Bill provides enabling legislation for the preparation and audit of consolidated accounts for the whole public sector. Fourthly, it enables us to set up Partnerships UK, a new body designed to make the public sector a better client in public finance initiative and public-private partnership deals.

Mr. Dale Campbell-Savours (Workington):

I am having difficulty with the Bill. Having spent 11 years on the Public Accounts Committee--I believe that I left the Committee in 1991--I have taken note of a statement by the National Audit Office, which is headed by an Officer of Parliament, the Comptroller and Auditor General. The statement says that, as currently drafted, the Bill threatens to weaken the Comptroller and Auditor General's independence and his relationship to Parliament. I regard that as a major intervention by the National Audit Office.

I beg to move, To leave out from "That" to the end of the Question, and to add instead thereof:

"this House declines to give a Second Reading to the Government Resources and Accounts Bill because, although great benefit can be derived from the construction of a proper balance sheet for the public sector and from proper rules for clear, simple and rigorously-defined government accounts, the Bill gives unfettered discretion to the Treasury, establishes no clear principles for the accounting of income or expenditure, will permit the Treasury to continue to omit large public assets and liabilities from the national balance sheet, and hence represents a missed opportunity to make much-needed improvements in the compilation and presentation of government accounts."

That has manifestly not been the case.

Question put, That the amendment be made:--

The House divided: Ayes 140, Noes 327.

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