Q41 Nigel Griffiths: What about the capability in schools? The Report mentions that one in six PFI schools do not have enough staff for their PFI contracts and a third of PFI hospitals do not have enough staff to manage the contract properly. Is that not an indictment?
Mr Kingman: As I said earlier to the Chairman, it is essential that people who are running complex contracts have the capability necessary to do that.
Q42 Nigel Griffiths: But that is another failure then, because a third do not in hospitals and a sixth do not in schools.
Mr Kingman: It would be a good thing if those projects had stronger capability.
Q43 Nigel Griffiths: We are in agreement then. It would be a good thing but it is your job to make sure it is done. What are you doing to make sure it is being done?
Mr Kingman: It is certainly our job to try to make sure it is done but it would be wrong for the Treasury to convince itself that it can somehow take over procurement. The Government spends hundreds of billions a year on procuring services. The Treasury is a small institution, we set policy and we try to strengthen capability but we cannot run everyone's procurement for them.
Q44 Nigel Griffiths: We are not asking that. What we are asking is why in every PFI hospital-and we are dealing generally with many hundreds of millions of pounds in a PFI hospital case-it is not a requirement that there is someone there to manage PFI contracts properly? Why is it left to local health authorities, or PCTs or whomever?
Mr Kingman: We have guidance, as James said earlier, that encourages people to have a full-time contract manager but hospitals take their own decisions, that is how it works.
Q45 Nigel Griffiths: You are responsible and so are we for the use of public money and that is frankly not a good enough statement to say they take their own decisions. If they decide to waste money, we presumably rely on someone in Whitehall to try to avoid that.
Mr Kingman: We certainly do have a clear role which is about challenge and I believe we discharge that.
Q46 Nigel Griffiths: Is it not desirable to convert guidance into mandatory practice?
Mr Kingman: It can be and in some cases we do. Going back to the example about competition, we have a very strong presumption in favour of competition, it is widely understood, it is enshrined in our guidance, it is enshrined in Managing Public Money and accounting officers fully understand that. I am not going to say that I know that there are no circumstances in which it is inappropriate not to have a competition because there are legitimate circumstances in which it is.
Q47 Nigel Griffiths: I am sure that is right. The case that was given of the East Riding school that is in here seems to be a good case. I am just wondering why people are allowed to get away with sloppier practice. Why are they not required to adopt best practice, rather than too often ignoring guidance which is voluntary?
Mr Stewart: On your specific point on contract managers the important thing is that they are put in place before the contract is actually finalised. So there is now very clear guidance in SOPC4 that says up to six months before a contract is signed, please put in place your contract manager.
Q48 Nigel Griffiths: That is a nice way of putting it. Why do you not say: "You must put in place a contract manager"?
Mr Stewart: It is not my decision to say "must".
Q49 Nigel Griffiths: Who should be saying that they must then?
Mr Stewart: Speaking for PUK, one of the things that we struggle with at the moment is continually the balance between the role of the centre and the responsibilities of the local procurement body. That balance has shifted over the last 20 years, but currently absolute responsibility and accountability for decisions sits with local bodies. We understand that, we tell them what we feel is right, we spread best practice, we give them guidance, we give them help.
Q50 Nigel Griffiths: Because we provide the money from here, I think certain things should be a requirement and that is one. That does not seem an unfair assumption, does it?
Mr Stewart: That is a matter of government policy that is not for me to comment on.
Mr Kingman: It depends what kind of body you are talking about.