A History of British National Audit A History of British National Audit The Pursuit of Accountability David Dewar Warwick Funnell Great Clarendon Street, Oxford, OX2 6DP, United Kingdom Oxford University Press is a department of the University of Oxford It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide Oxford is a registered trade mark of Oxford University Press in the UK and in certain other countries © David Dewar and Warwick Funnell 2017 The moral rights of the authors have been asserted First Edition published in 2017 Impression: All rights reserved No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, by licence or under terms agreed with the appropriate reprographics rights organization Enquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the address above You must not circulate this work in any other form and you must impose this same condition on any acquirer Published in the United States of America by Oxford University Press 198 Madison Avenue, New York, NY 10016, United States of America British Library Cataloguing in Publication Data Data available Library of Congress Control Number: 2016942457 ISBN 978–0–19–879031–0 Printed in Great Britain by Clays Ltd, St Ives plc ‘People will not look forward to posterity who never look backward to their ancestors.’ Edmund Burke, Reflections on the Revolution in France (1790) Foreword by Sir Amyas Morse, KCB Comptroller and Auditor General National Audit Office Living in a modern democracy it is easy to take for granted that the Executive will keep proper records of how it has used the resources at its disposal and be accountable to Parliament for the way it conducts its business But as the meticulous research by the authors of this book shows, instilling effective financial control and accountability for the use of public funds and the proper conduct of public business has been an incremental process that has taken centuries My predecessors in this office and its forerunners, supported by enlightened parliamentarians, have been key players in promoting financial accountability for government spending and the need for it to be audited independently on behalf of Parliament The scope of that audit has developed over the years from a focus on the presentation and accuracy of accounts to ensuring that funds are spent only for purposes approved by Parliament and that resources have been used efficiently, effectively, and with economy As a result, the National Audit Office and its predecessors have long played a vital role supporting Parliament to hold government to account for the value for money of public spending and the services it delivers While this is the Office’s ultimate purpose, it also aims to use its work to help the organizations it audits to improve performance and service delivery The significant financial constraints that departments face today requires them to recognize that short-term cost-cutting measures will not be enough Fundamental changes will be needed requiring departments to identify and implement new ways of delivering their objectives with a permanently lower cost base Responses to this challenge are likely to include service transformation, digitization, further use of private and third sector providers, and more integration of services at a local level While there have been some positive developments in terms of the civil service acquiring and developing the skills and capabilities required to make these complex changes and protect public value, they not yet match the scale of the challenge The weaknesses we still see in the public sector—services delivered in silos, short-term decision making, and a lack of organizational learning from experience—are all ones that would be familiar to many of my predecessors Foreword Complementing our existing charges of helping Parliament hold government to account, and helping to drive improvement in public services, our new roles relating to the audit of local public bodies under the Local Audit and Accountability Act 2014 substantially increase the breadth of our work These responsibilities mark a significant extension in the reach of our work, enabling us to take an end-to-end view from national policy through to local delivery and the effect on citizens At the heart of the National Audit Office are the expertise and passion of the people who work there, who are engaged on tasks that are challenging and satisfying and continue to reflect individual initiative I, like my predecessors, am indebted to them for their dedication and hard work in the service of the public viii Table of Contents A Sense of History Medieval Beginnings Advance and Retreat in the Financial Supremacy of Parliament 32 The Commissioners and Board of Audit 51 Early Victorian Reform 80 The 1866 Audit Act and the Modern State 106 Audit, Accountability, and the Impact of the Two World Wars 139 Post-War Strengths and Challenges 177 Audit in the Time of the New Public Management 196 10 The National Audit Office 230 11 Recurring Themes and Continuing Change 261 Appendices 275 276 277 279 279 283 289 Appendix Comptrollers and Auditors General Appendix Exchequer Tallies: ‘Preposterous Sticks’ Bibliography Primary Sources Secondary Sources Index ... Advance and Retreat in the Financial Supremacy of Parliament 32 The Commissioners and Board of Audit 51 Early Victorian Reform 80 The 1866 Audit Act and the Modern State 106 Audit, Accountability, and... extra labour to farm an increased arable acreage, particularly in the heavily-farmed lands of the Midlands and the south-east of England, where the need for extra labour was greatest and labour-service.. .A History of British National Audit A History of British National Audit The Pursuit of Accountability David Dewar Warwick Funnell Great Clarendon Street, Oxford, OX2