GREATER ACCOUNTABILITY FOR PUBLIC FUNDS

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.

NOTES FOR EDITORS

The Government’s intention to conduct a review, and a provisional indication of the scope of the review, was announced by the Chief Secretary in a written answer on 28 February 2000 (HM Treasury press release reference 24/00). Lord Sharman accepted the Chief Secretary’s invitation to lead the review.
In July 2000 the Review Steering Group, under the Chief Secretary’s chairmanship, confirmed the terms of reference for Lord Sharman’s review. Lord Sharman’s Review team issued a press release setting out the terms of reference in September 2000. The terms of reference and membership of the steering group are reproduced at Annexes I and II of the Government response.
Lord Sharman’s report “Holding to Account” was published on 13 February 2001 (HM Treasury press release 13/01).
The Government’s Response to Lord Sharman’s Report “Holding to Account” is available via the link beneath .
Media enquiries should be addressed to Charles Keseru in the Treasury press office on 020 7270 5188.

Internal links

Government Response to the Review of Audit and Accountability for Central Government: the Sharman Report

Press Notice index 2002 January to June