REPORT OF THE SELECT COMMITTEE ON MEMBERSHIP OF THE COMMITTEE ON EXPENDITURE AND PUBLIC ACCOUNTS AND ITS IMPLICATIONS REPORT OF THE SELECT COMMITTEE ON MEMBERSHIP OF THE COMMITTEE ON EXPENDITURE AND PUBLIC ACCOUNTS AND ITS IMPLICATIONS To the Hon Noel Q Cringle, President of Tynwald, and the Hon Members of the Council and Keys in Tynwald assembled. PART 1: INTRODUCTION 1. Background At the sitting of Tynwald Court on 16th January 2002, it was resolved that - (1) It is not necessary for all Members of the Legislature to have positions in Departments of Government or Statutory Boards; (2) Consideration should be given to whether the Chairman and Vice-Chairman of the Committee on Expenditure and Public Accounts should not have positions in Departments or Statutory Boards; and (3) Subject to (2) being approved by this Honourable Court, that a select committee of three Members be appointed and should liaise with the appropriate Tynwald and Government bodies and report on the implications, with recommendations, at the April 2002 sitting of Tynwald. After a ballot Mr Gelling, Mr Rimington and Mr Speaker were elected. At the first meeting Mr Speaker was elected as Chairman. The Committee has held seven meetings. C/MPAC/p1b/gmw PART 2: STRATEGY 2. Introduction 2.1 Your Committee acknowledges the first part of the Resolution, that - 'it is not necessary for all Members to have positions in Departments of Government or Statutory Boards'. Therefore no further consideration has been given to it. 2.2 In order to reach a conclusion on the second part of the Resolution your Committee determined to: (a) Summarise the considerations for and against excluding the Chairman and Vice-Chairman of the Committee of Expenditure and Public Accounts (`PAC') from any position within Government Departments or Statutory Boards. (b) Consider the existing Standing Order of Tynwald (Order 5.7) governing membership of the PAC. (c) Invite Members of Tynwald to submit written and oral evidence. (d) Invite members of the public to submit written evidence. (e) Obtain views of Government Departments and Statutory Boards. (f) Investigate the membership of PACs (or equivalent committees) in other jurisdictions. (g) Obtain a thorough overview of government financial control systems in order to understand how the PAC and its membership relates to these. 2 C/MPAC/plb/gmw PART 3: ENQUIRY 3. The considerations For and Against excluding the Chairman and Vice-Chairman of the Public Accounts Committee from holding any position in Government Departments or Statutory Boards. 3.1 Your Committee noted that the considerations could also be applied to any member of the PAC in relation to their role in a Government Department or Statutory Board. 3.2 Considerations for exclusion could include: (a) Exclusion need not produce insoluble problems of a lack of available Members to fill Government posts. (b) Exclusion may increase impartiality of the Chairman and Vice-Chairman of the PAC. (c) Exclusion may ensure the Chairman and Vice-Chairman had more time to devote to the work of the PAC. (d) Exclusion may permit a greater degree of expertise in government scrutiny to develop among the Chairman and Vice-Chairman (albeit that the work of the PAC is in relation to policies and expenditure already implemented.) (e) Exclusion may increase public confidence in the ability of Tynwald to scrutinise the work of Government. 3.3 Considerations against exclusion could include: (a) The exclusion of the Chairman and Vice-Chairman may make it difficult to fill all Government posts. 3 C/MPAC/plb /ganw (b) The exclusion of the Chairman and Vice-Chairman may well mean that experienced Members would not be available to serve in Government. (c) The exclusion of the Chairman and Vice-Chairman from Government posts would have a financial implication for them. (d) The exclusion of the Chairman and Vice-Chairman has not been regarded as necessary in the past. (e) The exclusion of the Chairman and Vice-Chairman may decrease the overall quality of Parliamentary scrutiny due to the Members lack of up to date inside knowledge of the workings of Government. (f) The exclusion of the Chairman and Vice-Chairman may be unnecessary given that Standing Order 5.7 prohibits a Member sitting in the PAC when the accounts of any body of which he or she is a member are being considered. 4. Existing Standing Orders Governing the Public Accounts Committee 4.1 The implications of the existing Standing Order of Tynwald governing the membership of the PAC, Standing Order 5.7, were considered. A copy of this Standing Order is attached as Appendix 1. 4.2 From this examination, your Committee identified that there are a number of Members who are presently ineligible for membership of the PAC. Those ineligible are: (i) Mr President(1) (ii) Mr Speaker(1) (iii) Members of the Council of Ministers(10) 4 C/NIPAC/p1b/gmw Exclusion of these individuals or groups means that a total of 12 Members are already excluded from membership of the PAC out of the 35 Members of Tynwald. (iv) In addition your Committee noted that when the accounts of any body of which he or she is a member are being considered, that Member shall not sit. All other Members of Tynwald, including the Bishop and the Attorney General (23), are eligible to serve on the PAC. 5. Evidence from Members 5.1 All Members of Tynwald were written to and invited to submit evidence in writing regarding the Membership of the PAC. Written submissions were received from: Hon R K Corkill MHK, Mr E A Crowe MLC, Mrs H Hannan MHK, Mr R W Henderson MHK, and Mr R E Quine MHK. All submissions were given in a personal capacity as against any Governmental or Parliamentary position held. 5.2 Your Committee felt it appropriate to invite Members who had replied in writing to submit oral evidence. The Committee took oral evidence from Hon R K Corkill MHK, Mr E A Crowe MLC, Mrs H Hannan MHK, Mr R W Henderson MHK, Mr R E Quine MHK and Hon J P Shimmin MHK (who requested to give oral evidence although he had not made a written submission) 5.3 Letters inviting Members to supply written evidence and their replies are set out as Appendix 2. 5.4 The Hansard transcript of the oral evidence is set out as Appendix 3. 5 C/MPAC/p1b/gmw 6. Evidence from Members of the Public 6.1 The Committee invited written evidence to be submitted by any interested member of the public. There were 3 replies. 6.2 The Public Notice inviting members of the public to submit evidence and the submissions received are set out in Appendix 4. 7. Evidence from Government Departments and Statutory Boards 7.1 In response to part 3 of the Tynwald Resolution, all Ministers and Chairmen of Government Statutory Boards were invited, on behalf of their Department or Board, to submit evidence in writing concerning the proposal that the Chairman and Vice Chairman of the PAC should not be Members of Government and the implications of any such change. 7.2 Ten written and one oral reply had been received by 30th April 2002. The oral reply was received from Mr E G Lowey MLC on behalf of the Arts Council. He indicated that while ideally the Chairman and Vice-Chairman of the PAC might not be Departmental members, the small number of politicians available to fill all Governmental posts may make this impractical. 7.3 The letter inviting submissions and the replies received are set out in Appendix 5. 8. Public Accounts or Equivalent Committees in Other Jurisdictions 8.1 The Committee examined the composition of Public Accounts and similar Committees in the UK Parliament, the Scottish Parliament, the Welsh Assembly, the Northern Ireland Assembly, the Irish Parliament and the Channel Island Parliaments. 6 C/MPAC/plb/gmw 8.2 Members of Government are excluded from Membership of the PAC in Scotland, Wales and Ireland, while in Northern Ireland there are restrictions on the Chair and Vice-Chair of the Committee who must not be Members of the same political party as the Finance Minister or junior finance ministers. In the United Kingdom there are no restrictions in the membership of the PAC.. In the Isle of Man, however, there is a fundamental difference with the political systems of Scotland, Wales, Eire, Northern Ireland and the United Kingdom in that no party political system operates. 8.3 Proposals to alter the structure of government in both Jersey and Guernsey may see the establishment of Public Accounts type committees. 8.4 The Committee noted a major difference between the Isle of Man and the other jurisdictions where ministerial systems of government exist; namely that in the Isle of Man there are no junior ministers. Departmental Members are not equivalent to junior ministers, with specific delegated authority from the relevant minister being given. 8.5 A summary chart showing the various systems used elsewhere in the British Isles is set out in Appendix 6. 9. Government Financial Management 9.1 Your Committee examined the overall system of financial control within government from the initial planning stage to the final auditing of accounts, and the role of Tynwald in relation to the Government system. It was felt this was necessary to understand fully the environment within which the PAC works. 9.2 Due to the complexity of the structure already in being within Government, and its relationship to Tynwald, your Committee felt it would be helpful to provide a diagrammatic illustration of the overall financial control system. 9.3 The summary diagram showing the overall structure of the financial control system is set out in Appendix 7.