HISTORIC PRESS RELEASE : Greater Accountability for Public funds [March 2002]

The press release issued by HM Treasury on 13 March 2002.

Improved scrutiny of Government bodies and greater accountability for the use of public funds were announced by Treasury Chief Secretary Andrew Smith today.

In its Response to the report “Holding to Account: The Review of Audit and Accountability for Central Government” by Lord Sharman, the Government has accepted the main recommendations directed to the Government and supports those addressed to other bodies.

The main effect of these recommendations will be to give the National Audit Office new powers of audit and access to documents.  It will also provide better scrutiny of the performance of public sector bodies and improve transparency.

Announcing publication of the Government Response, Mr Smith said:

“I am grateful to Lord Sharman for producing such a comprehensive review of audit and accountability in central government.  We have accepted all his recommendations directed mainly to the Government either in their entirety or in principle, and support his recommendations directed to other bodies.  The existing arrangements had developed over many years and Lord Sharman has set out the way forward for the 21st century.

“This report provides an excellent basis for Parliamentary scrutiny of the way taxpayers’ money is used. It retains the fundamental features of the current arrangements, while giving the Comptroller and Auditor General new statutory powers to ensure he can do his job independently.

“This will strengthen accountability of the Government to Parliament. It will also strengthen the move towards better management and innovation in central Government. I welcome the C&AG’s assurances that he will not use his new powers to impose extra burdens on private sector bodies that are holding documents that he needs to see. ”

The Response paves the way for increased Parliamentary scrutiny of central Government and improvements in the structure of accountability of the Executive to Parliament by:

• agreeing that the National Audit Office (NAO) should audit all non-Departmental public bodies (NDPBs).
• agreeing that, where the NAO needs to see documents, held by   bodies outside Government, it should normally have legal powers of access to them.
• inviting  the NAO  to validate the data systems used in reporting on Public Service Agreement (PSA) targets.
• supporting arrangements to promote the quality and transparency of central Government audit.
• ensuring that the new arrangements do not place bigger burdens on the private sector.