I am looking for a review of a mechanism local authorities are using more and more to deliver projects, including some commercial projects. That is designated activity companies, DACs. In my view, DACs are a way for local authorities to keep certain projects at arm's length so as to reduce risk. That is fine but many DACs have loans guaranteed by the local authority and they are in commercial arrangements. Many of them are not effective and are losing money. I wonder if it is an appropriate mechanism for local authorities to obfuscate, in some respects; distance themselves, in other respects; eliminate their own risk; and maybe create risk for others.

The other problem I have with them is the potential in terms of worker's rights - workers who are not working for the local authority but are working for the local authority, because ultimately the local authority is their boss. Some of these DACs work very well but some do not. I will not name any this morning but perhaps I will in due course. Why are we making things so complicated when it comes to local government in this country?

I do not think it is right that local authorities can come up with a creative structure to channel money that is not even under the auspices of the Comptroller and Auditor General. If these DACs were audited by the Comptroller and Auditor General, given they are in many cases more or less commercial operations, I would have more confidence because some of them could be brought into the public accounts committee. Because local authorities are audited by the local authority auditor, however, these DACs are by extension audited by the local authority auditor. A full review of them is needed and stress testing of their effectiveness and of the exposure for workers and the taxpayer.