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Coalition plans for NHS, schools, local authorities and Whitehall 'could harm parliament's ability to hold government to account'
The government's reforms to the NHS, schools, local authorities and Whitehall risk eroding the basic democratic principles of transparency and ministerial accountability, the parliamentary committee responsible for vetting government spending has warned.
The risk posed to parliament's ability to hold the government to account as it rapidly devolves power away from Whitehall is so great, the head of the public accounts committee (PAC), Margaret Hodge, suggests, that the independent spending watchdog the National Audit Office (NAO) may have to be substantially reformed to keep pace with the coalition's plans.
The committee's report raises concerns that it says collectively risk weakening the system of parliamentary accountability for safeguarding taxpayers' money, at a crucial time when budgets are falling.
Issues raised include:
• The government's localism plan, that will disperse the running of education, health and other services from Whitehall and councils to independently-run GP consortiums, foundation trusts, free schools, academies, privatised employment advisory services and voluntary groups under the "big society" programme. This will stretch existing auditing systems to the limit, the committee warns.
• On health reforms, the committee says: "We consider 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."
• The committee also questions ministers' claims that accountability will improve through greater transparency over spending, saying that "dumping" data into the public domain is an insufficiently rigorous guarantee of value for money.
• The ability of parliament to hold the chief civil servant in Whitehall departments to account for financial issues has been weakened by the creation of departmental boards chaired by the minister and including non-executive directors from industry, it says. Whereas ministers previously developed policy and civil servants implemented them, these lines have become "blurred". Concerns are also raised about the non-execs' power to report civil servants to the prime minister, and the informal system by which they have been appointed. Hodge said: "The idea that we could hold 130 foundation trusts properly to account for value for money is not good enough. It doesn't give me the confidence of a sound accountability framework.
"With private providers delivering employment support to people out of work, or academies or free schools in education, they have got to do better on the accountability.
"The National Audit Office and public accounts committee were established at a time when you had big government departments and big government contracts. The world is changing.
"Because of this dispersal of delivery I think the time has come for us to take a step back and ask, is the NAO fit for purpose when it becomes the only show in town and when we've got such decentralised delivery mechanisms?
"Can the PAC do an effective job in ensuring public value for money? Assuming the world can go on unchanged is not good enough."