AUDITING THE EFFICIENCY OF NATIONALIZED INDUSTRIES: ENTER THE MONOPOLIES A MERGERS COMMISSION

For over thirty years, there have been no arrangements for the systematic audit of the efficiency and effectiveness of British nationalized industries. In November 1981, the Government announced their intention to introduce such audits on a regular, programmed basis and assigned the responsibility to the Monopolies and Mergers Commission. Using two of the Commission's reports, this essay contests the opinion that efficiency audits, as distinct from effectiveness audits, require pre-determined performance criteria. But whilst recognizing both the advance in Whitehall thinking represented by the new arrangements and the quality of the audits so far completed by the Commission, the essay questions the decision to assign this function to the Commission, rather than the Comptroller and Auditor General, and expresses doubts about the extent to which the new arrangements will contribute to proper parliamentary control and accountability in the case of public enterprises.