SDSR - PM and the NAO
From the Guardian 11 July 2011 by Richard Norton-Taylor
David Cameron 'prevented independent watchdog seeing aircraft carrier papers'. MPs told that prime minister stopped NAO seeing documents that could shed light on cost of ships contract signed by Labour.
The prime minister intervened personally to prevent parliament's independent financial watchdog from seeing Whitehall documents on the decision to build two large aircraft carriers for the navy, it has been revealed.
David Cameron's decision was disclosed in the course of bad-tempered exchanges about the controversial project between Ursula Brennan, the most senior official at the Ministry of Defence, and members of the crossparty Commons public accounts committee chaired by Margaret Hodge, the former Labour minister.
In what Hodge described as an unprecedented move, Brennan said the prime minister stopped officials from the National Audit Office seeing papers after the officials were involved in a row with Sir Gus O'Donnell, the cabinet secretary, and Sir Peter Ricketts, Cameron's national security adviser.
"The papers that were withheld were policy papers relating to policy matters," Brennan told the MPs. It was for the Cabinet Office to decide whether or not the NAO should have access to papers "dealing with government policy".
Brennan was asked: "So the prime minister stopped the NAO from having access to the papers?" "Yes," she replied.
Senior audit office officials at the evidence session made clear they did not want to see the documents to question policy – an inherently political matter – but to question whether the government's decision represented value for money, which was their job.
"Parliament needs to be able to assure the public that value for money is obtained and government must put in place arrangements to enable parliament to do its job," the NAO said in a highly critical report. It added: "On the basis of what we have seen we cannot conclude on how the accounting officer [the MoD's top official] was able to reach a strategic judgment on the value for money on the carrier ... decision."
Cameron made it plain last year he was deeply frustrated at being told that, because of contractual obligations, cancelling the carriers would have cost more than building them. The NAO and MPs on the public accounts committee have challenged the claim and said they could not understand it.
Brennan confirmed that the cost of the two carriers was originally estimated at £3.65bn in 2007. The estimate now of building them, and with aircraft flying only from one, is £6.2bn.
Though HMS Prince of Wales would be able to carry 36 planes, it would carry just six in the year 2020, Rear Admiral Amjad Hussain, the senior naval officer responsible for the project, told MPs.