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

5 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

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5 Recommendation Rejected

57th Report - Government services:…

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

The Treasury’s system for fees and charges has failed to incentivise cost reduction or productivity improvements, leading to missed opportunities to improve services. Where charged services aim to recover all costs, any potential savings would be passed on to the … Read more

Government Response

The government rejects the recommendation, stating its existing Government Efficiency Framework and Spending Review targets already provide adequate incentives for departments to drive efficiencies in fee-funded services and track performance.

HM Treasury

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22 Recommendation Rejected

57th Report - Government services:…

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

Most services are designed to recover their costs, meaning any efficiencies achieved would be passed onto fee-payers rather than retained by the department. Conversely rising costs can simply be transferred to users without challenge.45 The NAO highlighted the challenges of … Read more

Government Response

The government disagrees with the recommendation but states that the Government Efficiency Framework (GEF) already provides extensive guidance for efficiency in the fee-setting framework. They state that departments are incentivised to drive efficiencies in their fee-funded services as this will count towards their bespoke technical efficiency targets agreed at the 2025 Spending Review.

HM Treasury

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23 Recommendation Rejected

57th Report - Government services:…

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

Departments and arm’s-length bodies struggle to identify opportunities to improve efficiency and value for money as they do not maintain detailed cost information. The NAO found charging bodies use different methods to calculate costs including a range of cost models … Read more

Government Response

HM Treasury

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24 Conclusion Rejected

57th Report - Government services:…

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

We heard evidence that some organisations have demonstrated how efficiencies can be achieved. The DVLA told us it has held its fees at 2014 levels by absorbing inflation through digitisation and process redesign, while improving customer service.52 It operates under … Read more

Government Response

The government disagrees with the recommendation but states that the Government Efficiency Framework (GEF) already provides guidance for efficiency and that departments are incentivized to drive efficiencies in their fee-funded services, which will count towards their technical efficiency targets.

HM Treasury

View details

Government Response AI assessment · 46 of 29 classified

Accepted 19

Accepted in Part 8

Acknowledged 10

Deferred 1

Not Addressed 3

Rejected 5

Total 29 recs + 17 conclusions

Correspondence 9 letters

27 Apr 2026 From committee Letter to the Permanent Secretary to HM Treasury relating to Treasure Minute response - Government Services identifying costs, 27 April 2026

Parliament page

27 Apr 2026 To committee Letter from the Permanent Secretary to the Department of Science, Innovation and Technology relating to Treasury Minute response - Government Services: Identifying costs

Parliament page

27 Apr 2026 From committee Letter to the Permanent Secretary to HM Treasury relating to Treasury Minute response - Government Services: generating income, 27 April 2026

Parliament page

12 Mar 2026 To committee Letter from the Permanent Secretary at the Department for Science, Innovation and Technology relating to recommendation 3a of the Committee’s Fifty-eighth Report on Government services: Identifying costs, 23 February 2026

Parliament page

1 Dec 2025 To committee Letter from the Permanent Secretary at HM Treasury relating to the Committee’s evidence session on Identifying costs and generating income on 20 October 2025 along with the draft checklist for fees and charges, 24 November 2025

Parliament page

1 Dec 2025 To committee Letter from the Chief Executive of the Driver and Vehicle Licensing Agency relating to the Committee’s evidence session on Government Services: Identifying Costs and Generating Income on 16 October, 24 November 2025

Parliament page

13 Nov 2025 To committee Letter from the Permanent Secretary of the Cabinet Office to the Chair relating to the Committee’s inquiry into Identifying costs: Government Services, 04 November 2025

Parliament page

13 Nov 2025 To committee Letter from the Director for Digital Strategy and Assurance of the Department for Science, Innovation and Technology relating to an Update on Chief Digital Information Posts 2025 following up from the Committee sessions on 16 and 20 October, 04 November 2025

Parliament page

3 Nov 2025 From committee Letter to the Chair relating to Committee hearing: Identifying costs and generating income, 24 October 2025

Parliament page