Treasury Response to Reform

The Treasury had been generally supportive of the provisions of the National Audit Bill as introduced by Norman St John-Stevas, though in return for government support it had sought changes in some of the specific provisions. The Treasury did not object to giving up its budgetary control of funding and staff numbers with a department as small and specialized as the NAO. There was the added advantage that the staff would no longer be included in civil servant numbers. The Treasury was also pleased to lose the little-used, but often criticized, powers they had under the 1921 Audit Act to issue directions to the C&AG on a miscellaneous range of accounts. It welcomed the clarification proposed on the role and status of the C&AG and their relationship with Parliament, and supported the statutory involvement of the Chairman of the PAC in the appointment of the C&AG, which strengthened what for many years had already happened informally.

Whilst recognizing that interpretation of the statutory provisions could ultimately be a matter for the courts, the Treasury issued a range of guidance to departments on these and other issues. The guidance included a degree of caution and some reservations on Treasury and departmental positions. A good deal of the guidance was directed towards how departments should handle examinations touching on policy issues, and how to respond to examinations in a variety of second- and third-tier bodies below main departmental level that received grants and other support from public funds. Although the prospect of examinations of effectiveness had initially caused concern within the Treasury and departments, in practice there were only isolated problems and disagreements. This was partly due to agreement in Standing Committee on the basic approach to be taken, and the NAO being careful to avoid potential difficulties and sensitivities when setting the scope and conduct of examinations and reporting the results.

One of the issues that did emerge as the provisions of the 1983 Act were implemented was the need to take into account potential conflicts between policy objectives. In a modern, complex society, expenditure programmes may have a range of objectives, some stated and some implicit or corollary. Some may involve different financial impacts on, or other disadvantages to, different groups affected. Others bring in more general factors. For example, a 1988 NAO examination of road safety pointed out that although the regulations for the use of seat belts applied at the time only to front-seat passengers, accident statistics disclosed serious risks also to rear-seat passengers not required to use seat belts. Clearly this did not question the merits of the primary policy objective of improving road safety. Still, the Department of Transport objected on behalf of their minister, who regarded any reference to the absence of requirements for wearing rear seat belts, and the attendant risks, as questioning a second-order policy objective of 'preserving individual freedom of choice'. The immediate issue was resolved by changes in drafting and regulations were later altered to make the wearing of seat belts compulsory for all passengers. In any non-totalitarian state a balance will often need to be struck between policy objectives directed primarily towards financial and operational outcomes and those involving more general, but important, factors in and around such 'soft' areas as personal freedoms, choice, and civil liberties. It is the responsibility of government to decide the most acceptable approach in reconciling potential conflicts between policy objectives, and it is the job of the auditor to recognize the complexities in the planning, conduct, and reporting of examinations.

< Prev   CONTENTS   Source   Next >