An appearance before the public accounts committee need no longer fill officials with dread, says its new chair, Margaret Hodge. She tells Suzannah Brecknell that she wants a more constructive relationship with civil servants
Whitehall expert Professor Peter Hennessy calls the public accounts committee (PAC) “the queen of the select committees”. And now, for the first time in its 139-year history, the queen is chaired by a woman.
“The first woman, and the first elected chair,” says Margaret Hodge (pictured above), as we discuss her new role in the Westminster Palace office reserved for the PAC’s chairman (as the ornate sign over the door still has it). Previous chairs were selected by party whips in a secretive process; their sombre-faced portraits line one wall of Hodge’s office. Space remains on that wall for just one more: her immediate predecessor, Edward Leigh. “I’ll go over there,” she says, indicating a bare wall, “and after me it will be woman, woman, woman!”
Hodge is brightly enthusiastic about her new role, and has a clear vision as to how PAC will fulfil its role – that of holding the government to account on spending – over the next few years. There are, firstly, administrative changes to make. The committee has tabled a motion in Parliament to alter its statutory footing; currently, unlike other committees, it can neither meet in recess nor appoint an adviser. In the past, PAC hasn’t needed an adviser, thanks to its close relationship with the Comptroller and Auditor General – head of the National Audit Office – on whose reports many of its inquiries have been based. But the new committee, says Hodge, doesn’t want to be a “creature of the NAO”; having an adviser will give PAC the autonomy and capability to pursue its own inquiries.
Hodge also wants to develop the way the committee works – emphasising more collaborative decision-making, for example, and giving all members a chance to put questions – and to broaden the kind of people it calls as witnesses. Traditionally, it has largely relied on the evidence of permanent secretaries, but Hodge says this is “somewhat limiting”. For its first report under Hodge – on the Department for Work and Pensions’ Pathways to Work scheme – PAC heard from some DWP private contractors; and for an ongoing inquiry into the Children And Family Court Advisory and Support Service, Hodge has invited the president of the family courts – CAFCAS’s main ‘customer’.
Perhaps the broadest change she would like to oversee, though, is a move away from the combative style often associated with PAC. A confrontational approach, she says, “may make for good telly – it may be ‘West Wingy’ – but I don’t think it makes for meaningful accountability.”
“People feel frightened of appearing in front of the PAC,” she continues. “They should feel that they’ve got to be accountable, but I don’t think they should feel it’s going to be a show in which our object is to make a fool of the person giving evidence. I want to move away from that culture – but it takes two to tango.”
This last comment is directed at civil servants tempted to evade PAC questions; those facing PAC must be prepared to “answer questions directly and succinctly”, she says. And she singles out Nicholas Macpherson, the Treasury permanent secretary: giving evidence recently on progress towards departmental Value for Money (VfM) targets, she says, he treated PAC to “an hour and a half of very boring flannel”.
“He waffled; he didn’t answer questions,” she says, referring to the session as their worst so far. “[It] was hopeless, very unsatisfactory, I don’t think it was good for him; it wasn’t good for us; it wasn’t good for the public in holding government to account,” she continues, adding: “We’ll have to deal with him in a different way the next time he comes. That doesn’t mean being combative, but [it means] making sure we get the answers we want in a succinct way.”
The Macpherson session was part of PAC research on the NAO’s finding that departments are unlikely to meet the target of £35bn savings by 2010-11, set out in the 2007 spending review. They had delivered just £10.8bn – 31 per cent of the target – at the halfway point of the spending review period. At the start of the hearing, Hodge told Macpherson that the NAO report had left the committee “really sceptical as to whether you, as the civil service, can cut much more deeply in a shorter period. Over to you to try to tell me that I should have any confidence at all in it.”
Did Macpherson restore her confidence? “Absolutely not; that’s one of the irritants”, she replies. “The Treasury takes no responsibility for [the targets]. I mean, the only thing he said was that you can’t get departments to look for value for money unless you cut their budgets. That’s shocking and deeply depressing.”
In order to help foster more constructive accountability, cabinet secretary Sir Gus O’Donnell has spoken to Hodge, asking her to look at successful schemes and, when dealing with failure, to take into account the need to take risks. “I agree with him 100 per cent,” says Hodge. “I’m really keen to look for success, and actually [the inquiry into VfM savings] would have been an opportunity to examine what had worked and why. But [Macpherson] didn’t tell us that.”
She accepts that risk-taking is sometimes needed to try out new approaches to tough problems, though, and refers to the committee’s Pathways to Work report. “What part of that programme proved is that there was money wasted on incentives [to encourage people back to work]. Nearly £94m: that’s a lot of money. Was it wrong to try it? I agree with [DWP permanent secretary] Leigh Lewis on this one: no, it wasn’t. What was wrong was to roll out a national programme without a proper evaluation.” The report was critical of a “flawed” evaluation which gave an “over-optimistic impression of what the programme could achieve”.
For the committee to find a way to interrogate more evasive civil servants without, as Hodge puts it, “becoming aggressive and turning it into a schoolboys’ fight” will require a combination of steel and charm. Hodge’s record suggests she may have the skills to strike this balance. She remained a minister for 12 years, weathering calls to resign (over a child abuse scandal which occurred during her tenure as Islington Council leader) and many reshuffles, before finally leaving for personal reasons – and retained enough respect from her peers to win an election for one of the most important select committee posts.
Hodge believes the PAC will become still more important, as the “dominant feature of this period of government is going to be cuts”. PAC will be responsible for holding the government to account “to ensure that in proceeding with the cuts, they have value for money and they meet their own principles. So we will test them against fairness and all these other objectives that they’ve set themselves.”
PAC may introduce cross-government reports, she suggests, and consider how departments compare in fields such as procurement or “less obvious and very interesting” issues such as definitions of need. Many departments allocate funds according to need, Hodge explains, but with differing definitions of what ‘need’ means: “So we could look at those different definitions across government, and see which really adds value and is best at meeting declared objectives of fairness.”
As we leave, Hodge goes back to researching the next day’s PAC hearing. Despite her experience in a number of departments, the range of topics which come under PAC’s scrutiny has put her on a steep learning curve: “In the first few weeks [as chair], I’ve learnt more than I have in years,” she says. That scope also makes the committee a good school for hungry politicians. She has, she says, some “ambitious young Conservative men on my committee who, I have absolutely no doubt, will deservedly want to climb the ministerial ladder.” Hodge herself, however, is clearly happy with the role she’s found in opposition. She’s “jolly lucky”, she says, to have won “probably the most interesting backbencher’s job in Parliament”.
CV highlights
1966 Graduates from London School of Economics (BSc economics); becomes a teacher
1973 Elected as a councillor in the London Borough of Islington
1982 Becomes leader of Islington council
1992 Leaves public service to become a senior consultant, Price Waterhouse
1994 Elected as MP for Barking
1998 Made a parliamentary under-secretary, Department for Education and Employment
2001 Becomes a minister of state in the Department for Education and Skills
2005 Made minister for employment and welfare reform, DWP
2007 Moves to the Department for Culture, Media and Sport
2008 Steps down from government for personal reasons, returning in 2009
2010 Elected as chair of the public accounts committee