Efficiency in Government

Public Accounts Committee Closed Inquiry
Opened: 1 Sep 2021 Closed: 1 Mar 2022 Parliament page
COVID-19 has resulted in unprecedented levels of government spending, and borrowing is at its highest level since World War Two. As at May 2021, government expects to spend £372 billion on measures in response to the COVID-19 pandemic. As part of measures to manage spending following the COVID-19 pandemic, Government … Read more
6 Recommendations
16 Conclusions
1 Report
1 Oral session
1 Event
Activity timeline 3 events
1 Mar
2022
Report published
3 Dec
2021
Report published
13 Sep
2021
Oral evidence
Oral evidence sessions 1 session
13 Sep 2021
View on parliament.uk
Efficiency in Government
Alex Chisholm · Cabinet Office Cat Little · Cabinet Office Sir Tom Scholar · HM Treasury
Title HC No. Published Items Response
Twenty-Eighth Report - Efficiency in government HC 636 3 Dec 2021 22 Responded
Recommendations & Conclusions
22 results
2 Recommendation Accepted
Twenty-Eighth Report - Efficiency …
Past experience shows that attempts to improve efficiency can inadvertently reduce the quality of services...
Past experience shows that attempts to improve efficiency can inadvertently reduce the quality of services or increase costs elsewhere – what this committee has called cost shunting. Efficiency plans without a clear idea of the implications for service users have … Read more
Government Response
The government agrees with the recommendation, stating it has already been implemented through the SR21 Priority Outcomes and Metrics, which include tracking user sentiment. HM Treasury guidance and recent efficiency exercises also require departments to consider impacts on service users and demonstrate deliverable proposals.
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3 Recommendation Accepted
Twenty-Eighth Report - Efficiency …
Previous efficiency programmes have over-promised and under-delivered.
Previous efficiency programmes have over-promised and under-delivered. ‘Optimism bias’ is a long-standing problem within government where project plans are impractical and unrealistic, and do not always achieve the expected objectives. We have seen this across a range of programmes, such … Read more
Government Response
The government agrees, stating the recommendation is already implemented. HM Treasury uses various mechanisms, including the Chief Secretary's engagement during SR21, spending control processes, and Outcome Delivery Plans, to challenge and test the realism of departmental savings and efficiency proposals.
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4 Recommendation Accepted
Twenty-Eighth Report - Efficiency …
Skills shortages in the civil service could compromise departments’ ability to achieve efficiency savings.
Skills shortages in the civil service could compromise departments’ ability to achieve efficiency savings. A lack of skills and leadership capability has caused delays, inefficiencies, and increased costs in several previous government projects. For example, the InterCity West Coast franchise … Read more
Government Response
The government agreed with the recommendation, outlining several actions to improve civil service skills and capability, including allocating £26 million to a Leadership College, improving functional skills training with specific targets, creating a Government Consulting Hub, launching a Finance Career Framework, improving spending team skills, and implementing capability-based pay for senior civil servants. The Cabinet Office will provide an update in May 2022.
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5 Recommendation Accepted
Twenty-Eighth Report - Efficiency …
Departments often struggle to track benefits as closely as they track costs.
Departments often struggle to track benefits as closely as they track costs. The Treasury holds departments to account much more vigorously for their programme expenditure than the benefits they deliver. In turn, departments are often much better at estimating, and … Read more
Government Response
The government agrees and states the recommendation is already implemented through Outcome Delivery Plans (ODPs), which track outcomes, costs, and benefits of efficiency plans. ODPs cover 2022-2025, with regular reporting and integration with existing financial monitoring and major projects assurance.
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6 Recommendation Accepted
Twenty-Eighth Report - Efficiency …
Government efficiency drives tend to be one-off events rather than being embedded as a continuous...
Government efficiency drives tend to be one-off events rather than being embedded as a continuous priority. The Treasury believes that well-defined, tight budgets provide departments with enough of a financial incentive to strive for efficiency continuously. But its emphasis on … Read more
Government Response
The government accepted the recommendation, committing to closer collaboration with Government Functions, regularising links between functional experts and Treasury teams, and outlining plans for writing to the Committee in Summer 2022. It also highlighted the Declaration on Government Reform and its implementation to instil a continuous improvement culture.
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1 Conclusion Accepted
Twenty-Eighth Report - Efficiency …
On the basis of a report by the Comptroller and Auditor General, we took evidence...
On the basis of a report by the Comptroller and Auditor General, we took evidence from HM Treasury (the Treasury) and the Cabinet Office on the government’s plans to increase its efficiency as part of the Spending Review.1
Government Response
The government accepted an inferred recommendation about planning for crises and ensuring efficiency plans don't impede them. It highlighted existing flexibility, new Outcome Delivery Plan guidance for 2022-23, a new forecasting framework, revised AO assessment guidance, and committed to a fuller assessment of lessons learned later in the year.
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7 Conclusion Not Addressed
Twenty-Eighth Report - Efficiency …
In the past, we have seen how departments failing to consider the full effects of...
In the past, we have seen how departments failing to consider the full effects of their plans to improve efficiency have led to increased costs elsewhere in government, or have led to reductions in service quality which were costly to … Read more
Government Response
The government response addresses a different PAC recommendation regarding considering impact on service users and tracking data, rather than the committee's conclusion #7 which describes past failures in efficiency programmes due to lack of full impact consideration.
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8 Conclusion Not Addressed
Twenty-Eighth Report - Efficiency …
We asked the Treasury how it will ensure efficiency plans consider the risk of ‘cost...
We asked the Treasury how it will ensure efficiency plans consider the risk of ‘cost shunting’, where money saved in one area increases costs in another area, and whether it would be asking departments to identify where knock-on impacts could … Read more
Government Response
The government response addresses a different PAC recommendation regarding considering impact on service users and tracking data, rather than the committee's conclusion #8 which reports on questions asked and answers received about cost shunting.
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9 Conclusion Not Addressed
Twenty-Eighth Report - Efficiency …
We questioned the Treasury and the Cabinet Office on how departments are expected to estimate...
We questioned the Treasury and the Cabinet Office on how departments are expected to estimate the impact of efficiency savings on service user behaviour, and how this is incorporated into plans for efficiency.22 The Treasury told us that it agreed … Read more
Government Response
The government response addresses a different PAC recommendation about considering impact on service users and tracking data, rather than the committee's conclusion #9 which reports on an exchange about estimating impacts of efficiency savings on user behaviour.
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10 Conclusion Accepted
Twenty-Eighth Report - Efficiency …
‘Optimism bias’ refers to the tendency for project appraisers to be impractical and unrealistic, which...
‘Optimism bias’ refers to the tendency for project appraisers to be impractical and unrealistic, which can lead to a failure to deliver, delays, poor service quality or a need for later funding injections.24 The prevalence of optimism bias in government … Read more
Government Response
The government agreed with the committee's recommendation (quoted in the response) that HM Treasury needs to ensure plans are adequately challenged, testing realism and using pilots. It described implementing this by leading engagement to test departmental proposals, developing Outcome Delivery Plans, enhancing financial reporting, and planning to share best practices based on successful pilots.
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11 Conclusion Not Addressed
Twenty-Eighth Report - Efficiency …
We asked the Treasury and Cabinet Office what is being done to minimise optimism bias,...
We asked the Treasury and Cabinet Office what is being done to minimise optimism bias, particularly how they can ensure efficiency plans are subject to adequate challenge and properly evidenced.26 The Cabinet Office told us that government functions will help … Read more
Government Response
The government response addresses a different PAC recommendation about ensuring efficiency plans are adequately challenged and realistic, rather than the committee's conclusion #11 which reports on an exchange about minimising optimism bias.
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12 Conclusion Accepted
Twenty-Eighth Report - Efficiency …
The Treasury told us that it is trying to prevent poor data leading to optimism...
The Treasury told us that it is trying to prevent poor data leading to optimism bias by improving the raw financial data that government captures. It gave the new Online System for Central Reporting and Accounting (OSCAR 2) as an … Read more
Government Response
The government agreed with the committee's recommendation (quoted in the response) that HM Treasury needs to ensure plans are adequately challenged, testing realism and using pilots. It outlined implementation through testing departmental savings proposals, developing Outcome Delivery Plans, enhancing financial reporting, and sharing best practices based on successful pilots.
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13 Conclusion
Twenty-Eighth Report - Efficiency …
We asked the Cabinet Office whether it had pushed back on any plans for reducing...
We asked the Cabinet Office whether it had pushed back on any plans for reducing the size of government estates because they were over-optimistic. The Cabinet Office explained that the government’s plan to shrink the London property estate has not … Read more
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14 Recommendation Accepted
Twenty-Eighth Report - Efficiency …
The Cabinet Office has overall responsibility for capability within the civil service and should ensure...
The Cabinet Office has overall responsibility for capability within the civil service and should ensure departments have the capability required to achieve planned efficiency programmes.33 Capability shortfalls have led to problems on numerous occasions, such as in the InterCity West … Read more
Government Response
The government accepted the recommendation, outlining several initiatives like a new curriculum, Finance Career Framework, and capability-based pay for Senior Civil Service to build capability. The Cabinet Office committed to providing an update in May 2022.
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15 Conclusion Not Addressed
Twenty-Eighth Report - Efficiency …
We questioned the Cabinet Office on how it can ensure capability is in place across...
We questioned the Cabinet Office on how it can ensure capability is in place across government to deliver departments’ efficiency programmes. The Cabinet Office told us that processes such as the Outcome Delivery Plans, where outcomes are matched against resources, … Read more
Government Response
The government response addresses a different PAC recommendation regarding HM Treasury and Cabinet Office working to understand and build capability, and report on progress of the Declaration on Government Reform, rather than the committee's conclusion #15 which reports on an exchange about capability delivery.
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16 Conclusion Accepted
Twenty-Eighth Report - Efficiency …
We asked the Cabinet Office how it can ensure that skills are situated in the...
We asked the Cabinet Office how it can ensure that skills are situated in the right places across government. The Cabinet Office explained how the growth in cross-government functions has helped achieve this, as has the internal government job market, … Read more
Government Response
The government agreed with the committee's recommendation (quoted in the response) regarding HM Treasury and Cabinet Office ensuring sufficient skills and capability. It outlined specific actions including establishing a Leadership College, improving functional skills training with targets, creating a Government Consulting Hub, developing the Finance Career Framework, improving spending team skills, and implementing capability-based pay, with an update to be provided in May 2022.
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17 Conclusion Accepted
Twenty-Eighth Report - Efficiency …
We asked the Cabinet Office whether it intends to reduce departments’ spending on consultants, which...
We asked the Cabinet Office whether it intends to reduce departments’ spending on consultants, which has been high and increasing following Brexit and COVID-19. The Cabinet Office told us it has a strong programme to try and cut the external … Read more
Government Response
The government agreed with the committee's recommendation (implied by the conclusion's content) to build internal capability, outlining specific actions such as allocating £26 million to a Leadership College, improving functional skills training with targets, creating a Government Consulting Hub, developing the Finance Career Framework, and implementing capability-based pay. The Cabinet Office will provide a progress update in May 2022.
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18 Conclusion Accepted
Twenty-Eighth Report - Efficiency …
The National Audit Office’s report described how it is important that departments track the progress...
The National Audit Office’s report described how it is important that departments track the progress of efficiency plans, enabling timely intervention and providing assurance that the benefits promised are being realised.42 We questioned the Treasury and the Cabinet Office how … Read more
Government Response
The government agreed with the committee's recommendation that the Cabinet Office and Treasury should use Outcome Delivery Plans (ODPs) to track the costs and benefits of efficiency plans. It stated ODPs for 2022-2025 are being produced to provide ongoing departmental performance pictures, supported by business case processes, IPA assurance for major projects, and monthly monitoring by Treasury spending teams.
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19 Conclusion Not Addressed
Twenty-Eighth Report - Efficiency …
The Treasury described how some of the processes used to scrutinise government plans, such as...
The Treasury described how some of the processes used to scrutinise government plans, such as benchmarking and ongoing project reviews, enable the Treasury and Cabinet Office to monitor the progress of efficiency programmes over time.46 The Cabinet Office told us … Read more
Government Response
The government response addresses a different PAC recommendation about using Outcome Delivery Plans to track costs and benefits of efficiency plans, rather than the committee's conclusion #19 which describes existing scrutiny processes and intentions regarding benefit tracking.
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20 Conclusion Not Addressed
Twenty-Eighth Report - Efficiency …
We asked the Cabinet Office how it is going to deal with the constraints of...
We asked the Cabinet Office how it is going to deal with the constraints of inconsistent and poor-quality data and legacy systems in tracking the progress of efficiency plans, as described in the National Audit Office’s report.51 The Cabinet Office … Read more
Government Response
The government's response addresses forecasting expenditure and Accounting Officer processes, which does not engage with the committee's conclusion about the Cabinet Office's plans for data quality, legacy IT systems, and data sharing.
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21 Conclusion Not Addressed
Twenty-Eighth Report - Efficiency …
The report by the National Audit Office emphasises the need for efficiency to remain a...
The report by the National Audit Office emphasises the need for efficiency to remain a priority on an ongoing basis, rather than only being taken seriously at major fiscal events such as Spending Reviews.53 The report describes the need for … Read more
Government Response
The government response addresses a different PAC recommendation about HM Treasury and the Cabinet Office working jointly to instil a culture of continuous improvement, rather than the committee's conclusion #21 which reports on the need for ongoing efficiency and asks how this will be encouraged.
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22 Conclusion Accepted
Twenty-Eighth Report - Efficiency …
The Treasury told us that the nature of the tight budgets in Spending Reviews forces...
The Treasury told us that the nature of the tight budgets in Spending Reviews forces departments to look within their budgets for improvements and savings, which it says will cause departments to constantly seek improvement.55 The Treasury said that strengthening … Read more
Government Response
The government agreed with the committee's recommendation that HM Treasury and Cabinet Office should instill a culture of continuous improvement. It outlined plans for HM Treasury to collaborate closely with Government Functions on efficiencies and to provide written plans to the Committee by summer 2022, alongside the ongoing implementation of the Declaration on Government Reform through various initiatives.
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Government Response AI assessment · 21 of 6 classified
Accepted 13
Not Addressed 8
Total 6 recs + 16 conclusions