National Audit Office (United Kingdom) - Criticisms

Criticisms

Some of the criticisms that have been levelled at the NAO include the following:

• It is not sufficiently accountable. Although the NAO publicly scrutinises other public bodies, the scrutiny that it is subjected to is not fully transparent. Its reports are subject to external review both before and after publication by teams of academics from Oxford University and the London School of Economics. These reviews consider whether the methods, findings and conclusions of the reports are sound, and have on occasion found the intellectual basis of the reports to be thin. The results of the reviews are not, however, made public.
• Its reports are neutral and cautious. This criticism stems from the normal way in which the reports are written. Initial drafts of reports are shared with the department(s) about which they are written. This begins a process of 'clearance', during which all facts are agreed between the NAO and departments. The reason for this is to give the PAC a mutually agreed report on which to base its later hearing; the hearing would be pointless if the departmental witnesses were able to disagree with the findings of the report. In practice, the clearance process is said to lead to a watering down of the initial draft, with the most contentious early findings removed at the behest of the department (and never, therefore, made public).
• Failure to publish. In extreme cases where information is too politically sensitive, a report is not published. The often quoted case is their 1992 investigation into the Al Yamamah arms deal where due to ongoing legal investigations the report has not been released. It refused to release a copy to investigators during the Serious Fraud Office investigation into the Al Yamamah corruption allegations in 2006 as to do so would have required a special vote by the House of Commons.
• Its savings are not robustly calculated. The NAO claims to save the taxpayer £9 for every £1 it costs to run. These savings include reductions in public expenditure and quantifications of non-financial impacts of the NAO's work. The latter includes expenditure being better targeted and, in some cases, increased expenditure. (For example, the NAO published a report on how the Department for Work and Pensions was making the general public aware of state benefits to which they might be entitled. Any increase in the take-up of benefits that could be shown to be directly attributable to the report would be counted as a 'saving' by the NAO.) If the definition of 'savings' were restricted to reductions in public expenditure, the amount of savings that the NAO could claim to have made on behalf of the taxpayer would be significantly reduced. The argument used to support this practice is that the NAO's remit is to examine the effectiveness and efficiency of public spending as well as the economy.
• Some of its reports are insufficiently strategic. The NAO produces a wide range of reports on all aspects of central government expenditure, but many of these deal with marginal topics like government leaflets, countryside rights of way and railway stations. As David Walker notes, the NAO does not and cannot examine major strategic issues such as the underlying principles of the Private Finance Initiative and the effect of class sizes on educational attainment.
• Its reports do not deal adequately with the issue of value for money. The NAO uses a broad brush definition of 'value for money' to plan and carry out its reports. The reports do not, as might be expected, focus purely on detailed financial analysis of whether or not a particular scheme or initiative is value for money. Instead, they include qualitative analysis of costs and benefits in order to give a more comprehensive assessment. In 2005, an NAO report on NHS Local Investment Finance Trust (LIFT) was criticised by one of the PAC members at the time, Jon Trickett, for its focus on qualitative analysis of the benefits of LIFT schemes and the paucity of its financial analysis. The NAO has recently published a report about the use of consultants in the public sector. Critics identify that this report did not directly answer the question of whether consultants employed by the public sector give good value for money. However, as the report highlights as one of its findings, this was not possible because insufficient information is gathered by departments. Furthemore, the report did not consider the quality of the advice given to departments by consultants.
• Sir John Bourn's Expenses In May 2007, Private Eye released information obtained under the Freedom of Information Act detailing the travel expenses of the then head of the NAO, Sir John Bourn. These included tickets on Concorde and stops at luxury hotels. In one instance, Sir John and his wife attended a three day audit conference in The Bahamas. The conference was Wednesday to Friday. Sir John arrived on the Friday and he and his wife stayed on the island Saturday and Sunday.
• Al Yamamah The NAO was also accused of hampering a police investigation into the Al Yamamah deal by The Guardian newspaper in July 2006. It would, however, have been a breach of parliamentary privilege and hence illegal for the NAO to have handed over the requested information.