UK Inquiry Tracker

Government services: Identifying costs and generating income

Public Accounts Committee Open Inquiry

Opened: 6 May 2025 Parliament page

The Committee (PAC) is holding an inquiry to look at government’s management of fees and charges to recover the costs of providing services and how government is identifying costs to sustainably improve productivity. Improved productivity is key to the government’s aims to improve the affordability of public services. Government’s roadmap … Read more The Committee (PAC) is holding an inquiry to look at government’s management of fees and charges to recover the costs of providing services and how government is identifying costs to sustainably improve productivity. Improved productivity is key to the government’s aims to improve the affordability of public services. Government’s roadmap for digital and data 2022-25 included an attempt to identify and quantify what is driving the cost of government’s services. Having a firm grip on the baseline costs of delivering an organisation's services is considered foundational in the private sector. The PAC reported in 2019 on the challenges in using data across government and found that a step-change in government’s approach to data was long overdue. It also found that a long-standing failure to improve the quality of data in government was leading to inadequate services and poor decision-making. Data on the drivers of cost in government’s services is important for identifying the potential for waste and prioritisation of transformation activities. The National Audit Office (NAO) has since reported in 2025 on progress since the PAC’s 2019 report. Following the NAO’s report, the PAC will hear from government officials from the Cabinet Office and the Government Finance Function as it scrutinises how government can better identify the costs of public services. The inquiry will also examine how, in delivering public services, some government bodies set and collect fees, charges and levies to recover costs or achieve other goals. The key guidance for managing these charges is laid out in HM Treasury’s Managing Public Money . The National Audit Office conducted a study – published in June 2025 – examining how effectively government adheres to Managing Public Money in implementing charges, identifying both good practice and areas of concern. The Secondary Legislation Scrutiny Committee in 2024 looked at government fees charged without clear legal authority, with their report highlighting concerns around transparency. This is the first time the PAC has scrutinised fees and charges separately, and the Committee will hear from senior officials from the Treasury, Ministry of Justice and DVLA to take forward scrutiny informed by the NAO’s report. Likely case studies include provision of charges around passports, visas, Companies House fees, driving licence fees, data protection fees, court fees, and gambling licences. If you have evidence on these issues, please submit it here by 23:59 on Thursday 2 October 2025. Please look at the requirements for written evidence submissions and note that the Committee cannot accept material as evidence that is published elsewhere. You can request anonymity or confidentiality when you send evidence, but it is the Committee which decides what information to publish and how. It may treat submissions confidentially, even where you have not requested this. Please note that the Committee’s inquiry cannot assist with individual cases. If you need help with an individual problem you are having, you may wish to read the information on Parliament’s website about who you can contact with different issues . On 10 July this inquiry’s name was changed from Government fees, charges and levies. Show less

29 Recommendations

17 Conclusions

2 Reports

2 Oral sessions

9 Letters

2 Events

Activity timeline 17 events

27 Apr
2026

Correspondence

Letter to the Permanent Secretary to HM Treasury relating to Treasure Minute response - Government Services identifying costs, 27 April 20…

27 Apr
2026

Correspondence

Letter from the Permanent Secretary to the Department of Science, Innovation and Technology relating to Treasury Minute response - Govern…

27 Apr
2026

Correspondence

Letter to the Permanent Secretary to HM Treasury relating to Treasury Minute response - Government Services: generating income, 27 April 20…

1 Apr
2026

Report published

Treasury minutes: Government response to the Committee of Public Accounts on the Fifty-seventh report from Session 2024-26

1 Apr
2026

Report published

Treasury minutes: Government response to the Committee of Public Accounts on the Fifty-eighth report from Session 2024-26

12 Mar
2026

Correspondence

Letter from the Permanent Secretary at the Department for Science, Innovation and Technology relating to recommendation 3a of the Committee…

12 Dec
2025

Report published

58th Report - Government services: Identifying costs

10 Dec
2025

Report published

57th Report - Government services: Generating income

1 Dec
2025

Correspondence

Letter from the Permanent Secretary at HM Treasury relating to the Committee’s evidence session on Identifying costs and generating income …

1 Dec
2025

Correspondence

Letter from the Chief Executive of the Driver and Vehicle Licensing Agency relating to the Committee’s evidence session on Government Servi…

13 Nov
2025

Correspondence

Letter from the Permanent Secretary of the Cabinet Office to the Chair relating to the Committee’s inquiry into Identifying costs: Governme…

13 Nov
2025

Correspondence

Letter from the Director for Digital Strategy and Assurance of the Department for Science, Innovation and Technology relating to an Update …

Oral evidence sessions 2 sessions

20 Oct 2025

View on parliament.uk

Andrew Cartner · HM Treasury Bonnie Wang · DSIT Cat Little CB · Cabinet Office Conrad Smewing · HM Treasury

16 Oct 2025

View on parliament.uk

Farhad Chikhalia · Ministry of Justice James Bowler CB · HM Treasury Matthew Taylor · HM Treasury Nick Donlevy · HM Treasury Tim Moss CBE · Driver and Vehicle Licensing Agency

Reports 2 reports · click to expand

Title	HC No.	Published	Items	Response
58th Report - Government services: Identifying costs	HC 1421	12 Dec 2025	21	Responded
57th Report - Government services: Generating income	HC 890	10 Dec 2025	25	Responded

Recommendations & Conclusions

46 results

2 Recommendation Rejected

57th Report - Government services:…

Introduce an annual review cycle and targeted deep-dives for charged services missing cost recovery targets.

The Treasury has been too passive in its oversight of fees and charges resulting in large surpluses and deficits which unfairly impacts taxpayers and potentially future service users. The Treasury’s current oversight of fees and charges is through its spending … Read more

Government Response

The government disagrees with the recommendation, rejecting an annual review cycle and targeted deep-dives. Instead, it will update the Financial Reporting Manual (FReM) with clearer guidance and embed oversight through bi-annual Spending Review returns.

HM Treasury

Government services: Identifying costs and generating income

Activity timeline 17 events

Oral evidence sessions 2 sessions

Reports 2 reports · click to expand

Recommendations & Conclusions

Introduce an annual review cycle and targeted deep-dives for charged services missing cost recovery targets.

Publish a detailed plan to reduce time and complexity in amending public service fees.

Establish standardised reporting requirements for fee-charging public bodies to enable effective public and parliamentary scrutiny.

Publish a plan to embed efficiency incentives within the fee-setting framework to reward productivity improvements.

Committee took evidence on financial management of government fees and charges.

Treasury's reliance on departmental accounting officers creates inconsistency in fee monitoring.

Government bodies require practical examples and clearer guidance for managing fee-setting challenges.

Charging bodies would benefit from improved sharing of best practice and expert advice.

Most charged services missed cost-recovery targets, resulting in significant financial shortfalls.

Government services consistently fail to meet cost-recovery targets, leading to persistent financial imbalances.

Significant fee-cost imbalances risk public service financial resilience and create unfair taxpayer burden.

Persistent fee imbalances create inequities, forcing future users to overpay or current users to subsidise.

Treasury's full cost recovery principle in Managing Public Money is not effectively monitored.

Fee amendment process is slow, complex, and lacks standardised data, undermining financial sustainability.

Slow fee amendment process prevents keeping pace with changing costs, especially during inflation.

Time-consuming fee adjustment process hinders routine, low-risk changes and consistent proposals.

Legislative scheduling for fee changes adds uncertainty and delays, competing for Parliamentary time.

Inconsistencies between MPM and FReM create ambiguity in fee disclosure requirements for departments.

Incomplete and inconsistent fee disclosures hinder parliamentary and Treasury oversight of departments.

Charged services lack transparency in disclosing full cost details and over-recovery funding.

Treasury recognises the need for proportionate financial reporting and improved fee transparency.

Cost-recovery models offer little incentive for departments to achieve efficiencies or innovate.

Departments struggle to identify efficiencies due to inconsistent cost-modelling and insufficient data.

DVLA and MoJ demonstrate successful efficiency gains through digitisation and process redesign.

Treasury acknowledges reactive efficiency system and plans a more proactive, strategic approach.

Require HM Treasury and GFF to provide departments with practical guidance for identifying and recording service costs.

Require DSIT to provide a baselined list of legacy systems and prioritise those for cost investigation.

Require Cabinet Office to mandate Permanent Secretaries to appoint Senior Single Service Owners for all services.

Require DSIT to lead systemic data and systems improvement and detail specialist retention plans.

Committee took evidence on improving government productivity via better service cost information.

Accountability for departmental cost information is jointly held but not systematically enforced.

Incentivise departments to collect detailed service cost data and clarify Permanent Secretaries' responsibilities.

Political sponsorship and senior leadership are essential for identifying service costs effectively.

Existing service costing standards lack sophistication and are applied inconsistently across departments.

Limited practical guidance and systematic support exist for identifying departmental service costs.

Government Finance Function recognises need for significant upskilling and data-driven improvements.

GFF co-produces good practice guidance with receptive departments to meet efficiency targets.

Legacy systems significantly increase costs and hinder data gathering across government.

“Quick wins” often mask persistent issues like poor data quality and cultural barriers.

Lack of common data standards complicates cost analysis, requiring cultural and process reforms.

Departments lack insight into staff time costs due to optional time tracking.

Absence of Single Service Owners hinders understanding of end-to-end service costs.

Require Permanent Secretaries to appoint Single Service Owners with appropriate authority for every service.

Legacy systems and poor data quality hinder government's adoption of new technologies.

Government pay rates remain insufficient to recruit and retain skilled transformation leaders.

Establish clear milestones and prioritise efforts to address government's long-standing legacy and data issues.

Government Response AI assessment · 46 of 29 classified

Correspondence 9 letters