ACCA welcomes the opportunity to respond to the call for evidence from the Communities and Local Government Select Committee (the Committee) for its Inquiry: Work of the Communities and Local Government Committee. Our evidence is based on our experience of both providing technical advice and appearing as a witness on previous inquiries held by the Committee.
Our response focuses on three key areas: the approaches and techniques used by the Committee for identifying, collecting and analysing evidence and publicising its activities; how local government and the provision of services can be scrutinised more effectively; and what changes and challenges can be expected from 2015, which may affect the work of the Committee in scrutinising DCLG and local government.
Overall, we believe that the Committee continues to make a positive contribution to the scrutiny of the DCLG and local government through its work programme. It has benefited from taking advantage of technical and specialist advice and employed the appropriate skills where necessary. It is prepared to push the boundaries as was the case when the Chair supported the establishment of a cross-cutting ad hoc committee to review local government audit. There are opportunities to increase public engagement and awareness of the Committee’s work in the future through channels such as social media to showcase its successes. But there are also challenges as to how to effectively scrutinise public services where the boundaries are becoming increasingly unclear. This may mean hosting more joint select committee inquiries in the future.
We believe that over a number of years select committees more widely have made significant inroads in improving the scrutiny of government departments and agencies. The introduction of the Parliamentary Scrutiny Unit in 2002 and the continuing support of the NAO have meant that select committees have benefited from greater access to specialist and technical expertise in areas of finance and performance management - both areas are usually at the heart of most inquiries. We are aware that the Committee regularly draws upon this wider expertise and consider this good practice.
However, we also believe that there is greater scope to tap into the skills and expertise that professional accountancy bodies can offer when it is considered appropriate. As independent bodies they can provide technical expertise in a range of areas such as finance, governance, regulation, pensions, public sector and business areas, including: national and local taxation. Most of these technical areas touch on the work of the Committee at some point in time.
From a personal perspective of providing technical support to an Inquiry on the abolition of the Audit Commission in 2010-12, I believe the Committee benefited from having received specialist advice and support from both an accountancy professional with a strong practical understanding of public audit and an academic who was familiar with the theoretical context and research. The Committee’s work was enhanced by having the support of two individuals that could bring different perspectives and knowledge of current developments in the policy area.
The Inquiry worked well because the Committee was engaged in the subject and members had a good and up to date working knowledge and understanding of local government and the Audit Commission. The Inquiry also benefited from having an effective Chair and constructive working relationships between advisors, parliamentary clerks and committee members. This is an effective model going forward.
We believe that the Committee’s final report ’Audit and Inspection of Local Authorities’ (July 2011) was a concise and punchy report that meant the reader could get to grips with the issues and recommendations quickly. Shorter and concise reports can be more impactful, although we appreciate that this is sometimes difficult to achieve because of the weight of evidence that needs to be properly reflected and/or the complexity of the issues explained.
In the last decade select committees have had increased media and social media visibility. However, there is still a challenge for committees to engage citizens and increase the level of interest in their work. This is invaluable for increasing public trust and confidence in both Parliament and the Government. The Committee may want to consider highlighting to the public where their recommendations have made a positive impact or change. Using social media to highlight the tangible changes could increase the visibility and engagement of the public in its work.
Also, the Committee should consider hosting hearings outside of Parliament as this may increase public engagement, as well as improve accessibility.
In our publication ‘Parliamentary financial scrutiny in hard times’ (2011) we reported that select committees are in danger of becoming a victim of their own success, as they take on increasing workloads, including the scrutiny of pre-legislature bills and draft, post-legislature scrutiny, committee hearings for public appointments, and general research duties’. This in our view makes it all the more important that inquiries are prioritised for the Committee and more widely across other select committees. This may result in fewer but more probing inquiries on high profile policy areas and facilitate more depth in the scrutiny of the issues.
Select committees need to recognise that they are operating in a changing landscape, than say 20 years ago when they operated as a sole means of scrutiny. In the contemporary political field, freedom of information (FoI), localism, devolution, a plethora of think tanks and access to continuous live media coverage are all forms of scrutiny we believe the Committee must also reconsider its priority policy areas for scrutiny in the future, and assess how it can add value to other governance and scrutiny processes.
Research conducted by Russell and Benton (UCL University) showed that roughly 40% of committee recommendations has been implemented by the UK government in 2011. A frequent criticism of select committees is that recommendations made are not systematically followed up. We have found that the Committee has a track record of following up recommendations made in previous inquiries and believe that it should continue to find parliamentary time to do this, if only to ensure that pressure is placed on a minister or government department to take action and make changes on a sustained basis.
Similar to other public bodies, a particular threat to the operation of select committees is the potential scarcity of resources being made available in future. This has the potential to undermine the effectiveness of the Committee’s work. As the remit of Committee’s work has the potential to expand it doesn’t necessarily follow that the resource allocation will increase either.
The fragmentation of local authority services, new models of service delivery, devolution and contracting may impact on the Committee’s ability to follow public money in the future. It will be a challenge for the CLG committee to hold private companies delivering significant local services to account where the only ‘instrument of accountability is the contract’.
In addition, traditional service boundaries are becoming blurred, such as in the areas of health prevention and social care. These changes will pose challenges to the traditional select committee structure. The silo nature of the select committee’s will need to adapt to be able to effectively scrutinise cross-cutting issues. More importantly we believe that there is a lack of overarching strategy from Parliament to guide the actions of select committees in relation to scrutinising issues that cut across departmental boundaries. This has generally arisen because select committees often replicate the government departmental structure. Although this structure has it strengths it also can be an obstacle to ‘joined-up’ scrutiny. For example, in considering the extensive scrutiny required for private finance initiatives (PFI) in the UK, departmental select committees look at each individual department’s PFIs rather than assessing the issue as a thematic/cross departmental issue on a higher level. Margaret Hodge, MP and Chair of the Public Accounts Committee (PAC), recently said that ‘she wanted to review issues such as the PFI and procurement on a pan-government basis rather than in departmental “silos” and to ensure that findings were acted on’.
There have been previous attempts to overcome the silo approach to scrutiny, in particular, in 2012 the chair of the Committee joined forces with the chairs from other select committee’s including the PAC to form an ‘ad hoc’ committee to review the changing local audit framework for public services. We believe this was a successful approach for reviewing a cross-cutting issue of some technical complexity that led to more effective scrutiny.
On a final note, the new audit framework for local authorities will become operational post March 2015. It is an untested framework with the potential for audit costs to rise and local authorities not being independently audited and/or properly scrutinised. The Committee should continue to keep a watching brief over this area post 2015 national election.