As we look back on the PAC’s remarkable history, the need for transparency and accountability has never been greater
This year marks the 160th anniversary since William Gladstone established the Public Accounts Committee, more than a century before the present system of committees was established in 1979. The remit of the committee in 1861 was to examine the economy, efficiency and effectiveness of government spending of taxpayers’ money. While its role has not changed, it is uncertain whether Gladstone could have imagined the scale of the role today.
In 1861, the railway boom was funded by private speculators. There was no universal pension, no unemployment benefits, no National Health Service. By 1918, there were just 28 civil servants in the Home Office compared with more than 30,000 today.
The world of public finance we examine is more complex, but the task is still remarkably simple – we ask the civil servants responsible for managing taxpayers’ money the questions taxpayers and service users want to ask.
Every single pound wasted is a pound stolen from public services
The committee is always chaired by an opposition MP but we always produce unanimous reports, united by our strong belief in the need to spend constituents’ money wisely and effectively. This is greatly helped by the deputy chair, a role I created for a senior government MP, first Richard Bacon and now Sir Geoffrey Clifton-Brown.
In 1861 the bulk of social services were supplied by municipal government. As the central state and the amount it took on grew through the 20th century and beyond, by the postwar period the Public Accounts Committee oversaw most public expenditure, delivered from the centre. In more recent years we’ve seen a return to devolution, to the nations and city regions, and now in the talk of “levelling up’”.
My office wall carries portraits of my predecessors. These include Harold Wilson, who took on the role while shadow chancellor so he could have access to a private office. Joel Barnett (of devolution funding formula fame) and Tony Sheldon were Labour Treasury ministers before becoming chair. David Davis followed Wilson into cabinet after his term. My two immediate predecessors are Sir Edward Leigh and Dame Margaret Hodge – the first woman chair, the first to be elected, and the woman who shaped the agenda on corporate tax. Sir Edward, a keen PAC historian, ensured our Victorian forebears are represented on the office wall. There is some fine facial hair on display, reminiscent of Shoreditch on a Saturday night.
For many of the Victorians the job would have been relatively straightforward. The central state raised and spent most taxes or gave them directly to local government. It was clear who was in charge and who was accountable.
Today, things are not so simple. Facebook, for example, which has been trading on Wall Street since only 2012, is worth $138bn (£101bn), more than many companies which have been around for 100 years. Many public services are now delivered by private companies. We scrutinise a complex, interconnected web of organisations, companies and layers of governance, with the pandemic only the most recent and visible example.
The need for transparency and accountability has never been greater, and the PAC has a critical role. We hold public evidence hearings twice a week, supported by the National Audit Office, so we can pin down Whitehall mandarins on the numbers. We do the maths, and we are rooted in the concerns of service users.
We are always clear that we are not talking about the government’s money. It is the public’s money. Constituents pay taxes in the hope and expectation that value for money is central to spending decisions.
Every single pound wasted is a pound stolen from public services, and never has our work been more important. The £374bn allocated so far to tackle Covid is eye-watering (compared, for example, to the NHS budget of £150bn in a “normal” year). From the outset of the pandemic we have made clear that ministers and civil servants must know that every spending decision and contract will be examined.
Meg Hillier is the Labour MP for Hackney South and Shoreditch and chair of the Public Accounts Committee.
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