our parliamentary correspondent, Accountancy Age, Wednesday 30 June 2010 at 10:07:00

Chairwoman of the Public Accounts Committee Margaret Hodge highlights risk toBBC editorial independence from opening its books up to scrutiny

Coalition government plans to widen National Audit Office powers to includethe BBC and Royal finances are being questioned by newly elected Commons PublicAccounts chairwoman Margaret Hodge.

The first-ever woman chair of the watchdog committee, arguably the mostpowerful of the Commons committees, said she is unsure of the extent of theapparent 'victory' for the long-running campaigns for the National Audit Officeto have unfettered access to the BBC's accounts and those of the monarchy.

The Coalition Agreement underlying the Lib-Con government stated: "We willmaintain the independence of the BBC, and give the NAO full access to the BBC'saccounts to ensure transparency."

And in his Budget statement, Chancellor George Osborne said: "The RoyalHousehold have agreed that in future Civil List expenditure will be subject tothe same audit scrutiny as other government expenditure, through the NAO and thePAC."

Hodge, a former Labour Culture Minister is concerned that the BBC statementcontains an internal contradiction, because the BBC maintains opening up itsaccounts to scrutiny would undermine its independence.

She said: "We need clarification. It is a welcome statement, but juxtaposingthe two means we need clarification.

"Does it give us the proper access we need to carry out proper value formoney scrutiny for licence fee payers?"

She made it clear she was "100% not" challenging the BBC's editorialindependence.

The position on the Queen's finances is more complicated because the PAC hasin the past only been able to look at Ministry for Transport grant in aid forRoyal Family travel, Department of Culture grants towards the cost ofmaintaining the Royal Palaces and at second hand at the operation of PrinceCharles' Duchy of Cornwall (which is formally audited by KPMG).

The NAO lacks direct access to the accounts of the Duchies of Cornwall andLancaster and any access at all to the Queen's income from royal estates likeSandringham and other properties which some regard as owned by the monarchy andothers by the Her Majesty in person.

Hodge said: "It is early days. I have to understand what precisely is mean bythe statement in the Budget.

"If there is to be serious assessment of efficiency and economy andeffectiveness (of the monarchy), one has to look at the total income andexpenditure. It is difficult to look at just a part."