Efficiency in Government
Public Accounts Committee
Closed
Inquiry
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 …
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6
Recommendations
16
Conclusions
1
Report
1
Oral session
1
Event
Activity timeline 3 events
1 Mar
2022
2022
3 Dec
2021
2021
Report published
13 Sep
2021
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
Reports 1 report · click to expand
| Title | HC No. | Published | Items | Response |
|---|---|---|---|---|
| Twenty-Eighth Report - Efficiency in government | HC 636 | 3 Dec 2021 | 22 | Responded |
Recommendations & Conclusions
13 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 …
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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.
HM Treasury
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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 …
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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.
HM Treasury
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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 …
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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.
HM Treasury
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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 …
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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.
HM Treasury
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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 …
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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.
HM Treasury
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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.
HM Treasury
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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 …
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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.
HM Treasury
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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 …
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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.
HM Treasury
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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 …
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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.
HM Treasury
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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, …
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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.
HM Treasury
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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 …
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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.
HM Treasury
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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 …
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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.
HM Treasury
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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 …
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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.
HM Treasury
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