PAC sceptical of consumer-based accountability

 Politics Blog  No Responses »
Apr 052011
 

The Commons public accounts committee (PAC) report on accountability has been published, noting quite rightly that the government's policies on localism raise "fundamental points about the current model of accountability".

The MPs are somewhat sceptical about the consumer-based model of accountability in public services, suggesting that this will not do the same job as Parliament or the PAC in ensuring value for money.

The committee gives the example of devolving decisions over NHS funding to GPs, describing the model of accountability as "rudimentary".

"For example, defining how patients will hold their local GPs to account when GPs are put in charge of commissioning services remains unclear and uncertain.

"In our view accountability systems need to be much more strongly developed to enable effective transfer of responsibility for cost and value for money to the local level. Relying on local groups and individuals to hold local service providers to account may highlight quality of service issues but is less likely to focus on cost and value for money as funds will be provided centrally.

"Currently, patients have little or no access to information on the cost, quality or value for money of their care and are unable to make clinical or value for money judgements between alternative treatments.

"Even if they could, the quality of care would be the overriding priority; cost and value for money would be secondary considerations in making choices."

The committee also noted the difficulties which could arise from having to distinguish between failing public bodies and failing policy structures.

"The Cabinet Office and the Treasury distinguished between Accounting Officers' accountability for systemic issues which result in poor value for money across all local bodies, and accountability to the local community or service user for the performance of local bodies. For example, the Accounting Officer should not be held to account for the performance of an individual academy.

"While we reserve the right to hold departmental Accounting Officers to account for systemic performance issues and individual public bodies to account for their use of taxpayers' money, we are concerned that it would be difficult for this committee to exercise parliamentary accountability by holding innumerable local delivery bodies to account for their use of public resources."

The MPs said that "new policy initiatives which involve the devolution of resources to local service providers should not be launched without establishing a clear mechanism which will ensure proper accountability to Parliament".

PAC conclusions and recommendations

1. We welcome the Government's acceptance of the need to reconcile the policy intention of its reform and localism agenda with the legitimate demands of parliamentary accountability. We urge the Government to consider the fundamentals of effective accountability set out in this Report and consult fully with Parliament on how accountability will be delivered within the context of its reform agenda.

2. Local accountability and reformed structures do not absolve departmental Accounting Officers of their personal responsibility to gain assurance on the way funds voted to their departments are spent. The Cabinet Office and the Treasury distinguished between Accounting Officers' accountability for system-wide issues and accountability to the local community or service user for the performance of local bodies. Our interest is in the financial management and value for money secured from all departmental spending and we expect Accounting Officers to put in place arrangements to provide us with the assurances we need. Parliament needs to be able to assure the public that value for money is obtained and Government must put in place arrangements to enable Parliament to do its job.

3. The accountability arrangements supporting the localism agenda are unclear. The National Audit Office estimates that 37% of central government tax receipts are devolved to local bodies. We support the aim of enhancing local accountability and user accountability, but thinking on how local communities and users hold bodies accountable in practice is rudimentary. The Government's review of accountability needs to consider the extent to which local accountability will act as an effective pressure to secure service improvements without due regard to value for money, particularly where there is no local financial incentive to keep costs down.

4. The reform agenda anticipates a plethora of delivery and accountability models, some of which are untested. Responsibility for delivering public services will be devolved to established entities such as local authorities with a strong record of managing public funds but also to new and untested bodies, for example GP consortia or free schools. The Government's accountability review should map out the landscape of the different delivery models and proposed accountability arrangements for each form of reform and ensure they comply with the fundamentals we have outlined.

5. Accountability regimes must be underpinned by sound information systems, yet our experience suggests this is an area of systemic weakness. Whether to aid the 'armchair auditor' and the users of local services, or to provide the assurance that Accounting Officers need to fulfil their responsibilities to Parliament, information about local delivery needs to be comparable and robust. The Government acknowledged that where resources are devolved to local providers, performance is likely to vary. Currently, users of local services have little or no access to information on the cost, quality or value for money of the services and this limits their ability to make informed judgements between alternative providers. Even if they did have access to the necessary information, service quality would be likely to prove the overriding priority for service users; cost and value for money would be secondary considerations in selecting the appropriate service. Government should specify what performance, financial and outcome information is needed to enable effective transfer of responsibility to local service providers.

6. Accountability for the delivery of major projects and programmes must be clear so those responsible for delivery can be held to account. There are weaknesses in personal responsibility and accountability for major projects due to the high turnover and lack of central oversight of Senior Responsible Owners. Government acknowledges that there is a shortage in project management expertise. This dilutes control over major projects, has led to cost overruns and delays and further weakens accountability to Parliament. The Cabinet Office is updating its current approach to enhancing project management expertise. At a project level, Senior Responsible Owners should be held accountable for delivering projects within an agreed budget and timeframe and should have authority to direct those involved in delivering the project. For all major projects and programmes, the Accounting Officer should nominate a Senior Responsible Owner who is accountable to Parliament alongside the departmental Accounting Officer. Steps should be taken to reduce the present turnover of staff, which undermines efficiency and effectiveness and makes a nonsense of personal responsibility and accountability.

 Posted by at 9.30am  Tagged with: , , ,

Some modest proposals for better accountability

 Politics Blog  No Responses »
Jan 252011
 

Having written a lot about problems of accountability in recent weeks, it makes a change to discuss some solutions which were put forward at an Institute for Government event last week.

Margaret Hodge, chairman of the Commons public accounts committee (PAC), gave a speech on the future role of her committee (podcast available here and a post about it here), and Sam Macrory of The House Magazine, one of the respondents to the speech, discussed some ideas I think are worth elaborating on.

The first is a possible solution to a problem which I discussed in this post – that while the government wants to encourage 'armchair auditors', it has no mechanism for any questionable spending to be reported or for members of the public to get answers about why the money was spent.

The PAC should become this connection between the public and the departments, given both its democratic remit representing the interests of taxpayers and its committee remit not to question if policies are right but if individual sums of money are well spent.

So the PAC could add a section to its website in which 'armchair auditors' submit questionable items of spending.

But as I noted in a post on the Your Freedom crowd-sourcing website, it is useful to include a rating system to ensure that the best ideas are identified without committee staff members having to trawl through them all.

To that end, the PAC could use existing services such as evly.com (when it is out of beta) or izwe.com which already provide the required functionality.

Then, the PAC could take perhaps the five top-rated submissions every three or six months and require written explanations from the officials who spent the money.

There would then be a complete connection between the government's intentions, the financial data being released, the democratic system, the departmental bodies which spend the money and the public who are being asked to scrutinise it.

If nothing else, it would also be an interesting test of how many 'armchair auditors' there are in practice given the scepticism there is in some quarters about that.

Pay bigger bonuses

The second idea I wanted to highlight also relates to the role of the PAC, but comes out of a problem cabinet secretary Sir Gus O'Donnell raised repeatedly in a recent appearance before the committee.

Asked why there can be a lack of experienced staff and high turnover rates for key project managers on big schemes, he said the civil service loses some of its best staff to the higher-paying private sector.

And the civil service is unable to pay the bonuses it needs to retain them as "you get attacked all the time if you put in an element of performance-related pay".

What Sir Gus is talking about here is a political problem – it isn't that bonus schemes can't be created that reward success, it is that the media and opposition parties of the day inevitably cite them as "waste" when other services are being cut back.

A political problem such as this needs a solution which ties in all political parties to the bonus system and provides cover from media criticism.

The government should devise bonuses for its most important projects which are large enough to reward the civil servants for staying in place for extended periods and which are also sufficient to stop them being attracted to the private sector (ie significantly larger than at present). For bigger projects, there could be payments at milestones along the way.

However, the payment of these bonuses should be subject to the prior approval of the PAC. The committee should be able to block or reduce the bonus if it chooses to.

Under such a system, the civil service would be able to run an enhanced performance-related pay system and have democratic cover for spending larger sums on it.

And the PAC, as well as having extra power, would also be helping to address its core criticisms of failed projects; that they are damaged by high staff turnover and that the senior officials responsible for them often do not stay in place long enough to be held responsible.

By happy coincidence, the government is giving responsibility for projects which have significant operational, financial or reputational risk to its new Major Projects Authority. This would provide the pool of projects which should command higher bonuses and PAC oversight.

 Posted by at 10.22am  Tagged with: , , , ,

Accountability: Open data and democracy

 Politics Blog  No Responses »
Nov 252010
 

In the previous two posts in this series about open data and the changing nature of political accountability, I looked at internal civil service accountability mechanisms and the concept of 'armchair auditors' monitoring government spending.

Both these mechanisms are designed to deliver some improvements in the day-to-day running of the public sector through greater transparency (although my posts are rather sceptical about that), but ultimately ministers suggest that voters should exercise their influence through the ballot box.

To quote communities secretary Eric Pickles:

"In future, the emphasis needs to be on local authorities being democratically accountable to local people rather than to central bureaucratic systems. That is why I am encouraging local authorities wherever possible to make their performance data accessible to their citizens."

The suggestion is that if waste and errors are revealed by open data and not explained or stopped by politicians and officials then it is eventually down to the public to vote for an alternative administration.

This democratic accountability is presumably intended to apply at a national as well as local level.

Data for whom?

The first difficulty here is that, as Professor John Stewart of the University of Birmingham noted in a recent evidence session with the Commons communities and local government committee, statistics and data tend to be "a political tool and a management tool".

The public will cast their votes on the basis of their experience of how good services actually are, he suggested. So as long as services are of a reasonable quality, money wasted on fruitless projects might make no difference.

And second, this kind of democratic accountability is not just about bureaucratic competence and waste.

Indeed unless the waste is on an heroically incompetent scale then it might be that voting for a change of control of the local or national government is a disproportionate response.

Moderate or average incompetence is just one factor among many to be considered when marking an X in the ballot box.

Other factors involved in democratic accountability range from ideological preferences and quality of local candidates to national events or street-level planning decisions.

And then we might consider how possible it is to actually vote in a new administration. Perhaps open data implies a need for some kind of electoral reform which makes it easier to change administrations. Or perhaps it makes the case for the clearer accountability of first-past-the-post.

That is a whole other argument, but I think it is relevant given the specific emphasis on democratic accountability.

Parliamentary accountability

As well as taking place through the ballot box, at the national level at least democratic accountability can also take place through Parliament and its various scrutiny mechanisms.

Many of the emerging issues here are discussed in greater depth in this excellent Institute for Government (IfG) paper.

Deputy prime minister Nick Clegg has acknowledged that parliamentary accountability will become an increasingly imperfect mechanism as the government implements its reforms.

"Ministers standing at the despatch box will continue to be held responsible for local decisions over which they no longer have any control. This will feel uncomfortable, to say the least: responsibility without power, the curse of the decentralising minister. Fear of this scenario has been an obstacle to decentralisation in the past. But we know it is coming, and we are ready to stay the course."

But this is not really just about ministers feeling uncomfortable, it is about a systemic mismatch of power and accountability at the centre of the political system.

Responsibility for not just the running of local services but also the service standards themselves is shifted away from ministers, yet they are accountable to MPs who are there to represent their constituents.

As Bill Moyes wrote in a post for the IfG, the key assumptions about ministerial responsibility at the heart of the way Parliament works are "already not valid for every department and public service" and this is going to become steadily less true over the coming years.

So is the role of an MP to change so that it mirrors that of a minister, focused only on systems? I can't see constituents accepting that as a response from their local representative.

(Although I think one of the main reasons MPs are overburdened with constituency casework is that public services are not as good as they should be at complaints handling, which leaves users who experience problems with little choice but to circumvent the bureaucratic process by exerting political pressure. So perhaps more innovative, responsive and devolved services will have an impact on the proportion of work MPs spend on such casework.)

Or perhaps MPs will need to extend their contacts with local service providers, and these providers will develop some kind of formal accountability to MPs.

Cut out the middle man

But it goes further than that. Prime minister David Cameron said of departmental business plans:

"Instead of bureaucratic accountability to the government machine, these Business Plans bring in a new system of democratic accountability – accountability to the people."

Which sounds rather like the government seeing itself as directly accountable to the public, rather than to them through Parliament.

All governments seek to make their case to the public, of course. But this seems to go a step further in not just engaging or consulting the public but specifically being held to account between elections by an entirely new mechanism which is enabled by a combination of open data and transparency.

To use Cameron's term, it really is a "new system" his government is developing.

It's a theme of this blog that eDemocracy tools have the potential to weaken the role of Parliament as government, officials and public services become more accountable directly to the public.

This seems to be a step along that road.

But while it is an enhancement in accountability in many ways, the same reform agenda also weakens accountability in other ways. This will be the subject of tomorrow's post.

 Posted by at 9.53am  Tagged with: , , ,

Accountability: The problems with 'armchair auditors'

 Politics Blog  1 Response »
Nov 242010
 

Following on from yesterday's post on issues of accountability, today I'm focusing on the often-mentioned 'armchair auditors'.

Ministers have set the intention out pretty clearly. Local government secretary Eric Pickles has said:

"I want to see an army of 'armchair auditors' pore over the information and hold their council to account if things are not done right."

And prime minister David Cameron seems to have gone even further in his expectation of what might be achieved by opening the government's books to more scrutiny:

"With a whole army of effective armchair auditors looking over the books, ministers in this government are not going to be able to get away with all the waste, the expensive vanity projects and pointless schemes that we’ve had in the past."

Ministers are clearly right when they said that the public has a right to see how their taxes are spent, so I would agree that transparency is a good thing in itself regardless of anything else.

But I don't yet see how this public scrutiny will achieve the outcomes that are hoped for.

Vanity projects

Cameron's suggestion of an end to "expensive vanity projects and pointless schemes", for example, seems to stray into the area of political debate.

One man's Millennium Dome might be another's unnecessary reorganisation of the NHS.

And even if it is a smaller pilot scheme, ministerial pet project or not, who's to say if it isn't worth trying until after the money has been spent and the outcomes evaluated.

Similarly, ministers say they want to encourage more freedom to innovate in service delivery, and are prepared for some schemes to fail.

But is it likely that such schemes might be flagged up as 'pointless' even if they are part of a successful innovative ecosystem?

There seem to be conflicting pressures in the system, representing conflicting ministerial desires to reduce waste but allow 'innovative failures'.

Holding to account

But let's move on to the perhaps simpler proposition that 'armchair auditors' can hold public sector bodies to account by looking over spending data.

Take the example of the spending data which has now been released.

The officials who spent the money aren't accountable to the public as we don't know who took the decisions (or why).

So presumably they are accountable to their managers and through them to ministers in the usual chain of command.

But this implies one of two things

First, that the number of questionable spending decisions is going to be so small that it will be possible for ministers to chase up explanations for all of them.

This means that the reform is not going to be genuinely transformative of government spending, but might have an impact at the margins.

Or second, it will be significant but the processes for dealing with lots of complaints from the public haven't been thought through.

A question of process

To begin at the beginning, if I am an 'armchair auditor', what do I do exactly?

Do the people who spot questionable things have to send them to the BBC or the Guardian, where they get picked up by departmental media monitoring, and then get passed around internally for explanations?

Should there be some mechanism for reporting wasteful spending on government websites themselves?

There doesn't seem to be any particular process behind this 'policy' (if it is a policy, or perhaps a vague aspiration).

That point is nicely made by this freedom of information request to the Department for Communities and Local Government. It asks:

"I learn from today's Guardian that following the scrapping of the Audit Commission, ordinary people are to act as armchair auditors to report financial waste and wrongdoing. Who do they report this to? I assume something has been already put in place, or why announce it in the press?"

The deadpan response from the DCLG is:

"You ask 'ordinary people are to act as armchair auditors to report financial waste and wrongdoing. Who do they report this to?' following the disbandment of the Audit Commission?

"I am writing to advise you that I am unable to provide you with the information you requested as Communities and Local Government does not hold it."

Although an FoI request is perhaps not the best way to find out such information, I have yet to see any government recommendation about how to report waste. Perhaps a waste hotline?

Who decides?

Another question is which 'armchair auditors' get to decide if an item of spending is unreasonable? Does it take just one person to object, or a larger number through some kind of aggregation mechanism?

Should each spending item be linked to some kind of crowd-sourced voting mechanism for decisions on whether it was justified? Should there be a threshold for the number of 'mehs' a spending item needs to get before it is officially questionable? Or perhaps the top two per cent might be the most doubtful.

Perhaps there could be a rating mechanism for the 'armchair auditors' themselves, with the votes of those who find the most waste being given a higher value.

Anyway, if the spending is then examined internally and the decision is that it was justified, what mechanism is there for reporting that back to the objectors? And can they appeal?

And besides, once the money has been spent, what specific outcome is expected? A reprimand for the person who spent it? Six paragraphs of bad publicity in the local newspaper?

Questions to answer

So the concept of 'armchair auditing' as it currently stands seems to rely more on the pressure it puts on civil servants before a spending decision is taken.

As I detailed in the previous post in this series, this mechanism is hard to measure.

And if successful it means there is little for 'armchair auditors' to actually complain about. So can any initial sense of vigilance then be maintained over time?

Then, given that every organisation spends at least some money wastefully, should we be making decisions about performance based on some kind of comparison to other councils, say, or being absolutist in our intolerance of waste?

And if it's a relative measure, how is that information organised and displayed for voters?

So many questions.

Failure to deliver

As I said back at the start, opening up this data is right in and of itself. But that doesn't mean it shouldn't be wrapped up in a well thought-out policy framework. This currently seems to be missing.

It might be a flagship government policy, but without improvements my best guess is currently that it is going to run aground before the next election, perhaps even 12 months from now when smart Opposition frontbenchers should be asking written parliamentary questions about what actions have been taken as a result of complaints from 'armchair auditors'.

This is the second time I've concluded that open data may not be capable of delivering what politicians expect it to, which worries me because I want it to work.

But there is perhaps one get-out here. This is that accountability for waste is not delivered through government processes but through the ballot box.

So in tomorrow's post, I'll move on to look at the role of more formal democratic mechanisms when it comes to open data and accountability.

Update: By coincidence it seems a bunch of other things about armchair auditing and open data have also been published today...

Update 2: More by Simon Burall on 'armchair auditors'.

 Posted by at 8.00am  Tagged with: , , ,
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