58th Report - Government services: Identifying costs

Select Committee
Public Accounts Committee HC 1421 12 December 2025
Report Status Response document linked Recorded deadline: 12 Feb 2026

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Conclusions & Recommendations 21 items (13 recs)
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Government response
Treasury minutes: Government response to the Committee of Public Accounts on the Fifty-eighth report from Session 2024-26 · published 1 Apr 2026
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Recommendations & Conclusions

21 results
2 Recommendation
Require HM Treasury and GFF to provide departments with practical guidance for identifying and recording service costs.
Recommendation
Most departments lack a sufficient understanding of their service costs and departments need help from HM Treasury and the Government Finance Function on the practical steps they can take to improve and upskill. While standards for service costing and financial … Read more
HM Treasury
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3 Recommendation
Require DSIT to provide a baselined list of legacy systems and prioritise those for cost investigation.
Recommendation
Legacy IT systems are a significant contributory factor in the cost of government services and an impediment to being able to gather better data to bring about improvements. Departments face major challenges in collecting and analysing cost data due to … Read more
HM Treasury
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4 Recommendation
Require Cabinet Office to mandate Permanent Secretaries to appoint Senior Single Service Owners for all services.
Recommendation
The lack of Single Service Owners with accountability for all aspects of an end-to-end service inhibits departments’ ability to identify the visibility of a service’s end-to-end cost and the incentive to reduce it. The absence of Single Service Owners (SSOs) … Read more
HM Treasury
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5 Recommendation
Require DSIT to lead systemic data and systems improvement and detail specialist retention plans.
Recommendation
There is a lack of urgency and clear leadership for resolving the legacy systems and poor data issues that inhibit the realisation of benefits through greater productivity and efficiency that departments will reap from new technology such as AI. Government … Read more
HM Treasury
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1 Conclusion
Committee took evidence on improving government productivity via better service cost information.
Conclusion
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Cabinet Office, HM Treasury and the Department for Science, Innovation and Technology on improving government’s productivity through better information on the costs of … Read more
HM Treasury
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6 Conclusion
Accountability for departmental cost information is jointly held but not systematically enforced.
Conclusion
Responsibility for holding departments to account for improving their cost information is joint between the Cabinet Office and HM Treasury. The Cabinet Office sets the overall performance management framework expectations, including financial minimum standards.6 However, it does not systematically enforce … Read more
HM Treasury
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7 Recommendation
Incentivise departments to collect detailed service cost data and clarify Permanent Secretaries' responsibilities.
Recommendation
However, current obligations are focused on wider overall value for money and there are no specific objectives or accountability for Permanent Secretaries or senior leaders to collect detailed data on costs at the service level.8 Although the Cabinet Office and … Read more
HM Treasury
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8 Recommendation
Political sponsorship and senior leadership are essential for identifying service costs effectively.
Recommendation
The Cabinet Office told us that political sponsorship and support is considered essential as well as that of senior leaders within departments.13 This aligns with government’s goal of creating a more “productive and agile state”.14 Introducing targets for getting processes … Read more
HM Treasury
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9 Recommendation
Existing service costing standards lack sophistication and are applied inconsistently across departments.
Recommendation
Some standards for service costing and financial management exist.16 However, we repeatedly heard that they lack the necessary sophistication and are applied inconsistently across departments.17 We heard examples of where costing activities were taking place at a more granular level, … Read more
HM Treasury
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10 Conclusion
Limited practical guidance and systematic support exist for identifying departmental service costs.
Conclusion
We found that there is limited practical guidance and systematic support for people in departments who own the services and are responsible for identifying their costs.20 Forums such as the Finance Foundations Group aim to share best practice.21 While we … Read more
HM Treasury
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11 Conclusion
Government Finance Function recognises need for significant upskilling and data-driven improvements.
Conclusion
We were pleased to hear that the Government Finance Function (GFF) recognises the need for a significant shift.23 It told us that it has conducted an internal skills assessment and will recruit additional experts to help 13 Qq 147, 148 … Read more
HM Treasury
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12 Conclusion
GFF co-produces good practice guidance with receptive departments to meet efficiency targets.
Conclusion
GFF is seeking to co-produce guidance with departments demonstrating good practice.27 Both Cabinet Office and GFF said that departments are receptive to this push, especially given the efficiency targets they are expected to meet as set out in the 2025 … Read more
HM Treasury
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13 Recommendation
Legacy systems significantly increase costs and hinder data gathering across government.
Recommendation
Legacy systems are problematic for two main reasons. Firstly, they are a significant driver of cost, comprising around one-third of government’s technology estate but representing almost half of its costs.30 This may not include the excess costs that arise from … Read more
HM Treasury
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14 Conclusion
“Quick wins” often mask persistent issues like poor data quality and cultural barriers.
Conclusion
“Quick wins” can be valuable. However, we are concerned that they often mask deeper and more persistent issues like poor data quality and entrenched cultural barriers. As the Cabinet Office has itself identified, these will need ongoing tenacity and effort … Read more
HM Treasury
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15 Conclusion
Lack of common data standards complicates cost analysis, requiring cultural and process reforms.
Conclusion
The lack of common data standards across government further complicates benchmarking and granular cost analysis because it makes data more difficult to analyse and interpret.35 GFF told us that the introduction of new Enterprise Resource Planning systems and new data … Read more
HM Treasury
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16 Recommendation
Departments lack insight into staff time costs due to optional time tracking.
Recommendation
Departments do not generally have a good view of the additional time and people costs associated with specific business processes or different stages of the customer journey.38 We were therefore surprised to learn that there is no standard policy in … Read more
HM Treasury
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17 Conclusion
Absence of Single Service Owners hinders understanding of end-to-end service costs.
Conclusion
It is difficult for departments to gain a full view of the end-to-end costs of a service where there is no Single Service Owner (SSO) with overall mandate and responsibility for the service concerned.41 This also weakens the incentives to … Read more
HM Treasury
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18 Recommendation
Require Permanent Secretaries to appoint Single Service Owners with appropriate authority for every service.
Recommendation
The SSO role is not well understood across departments compared to other senior roles in departments. Both Cabinet Office and DSIT told us that more can and should be done to raise its profile and ensure that an SSO is … Read more
HM Treasury
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19 Recommendation
Legacy systems and poor data quality hinder government's adoption of new technologies.
Recommendation
Government transformation and efficiency efforts are increasingly reliant on newer technologies such as artificial intelligence (AI).47 Legacy systems and poor-quality data remain a major barrier to reaping the full benefits.48 We heard that addressing data and legacy issues requires sustained … Read more
HM Treasury
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20 Recommendation
Government pay rates remain insufficient to recruit and retain skilled transformation leaders.
Recommendation
Resource constraints at the centre of government mean that less support is available to departments compared to what was available under previous initiatives like the Top 75 programme.50 We have often observed on this committee that government pay rates cannot … Read more
HM Treasury
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21 Recommendation
Establish clear milestones and prioritise efforts to address government's long-standing legacy and data issues.
Recommendation
Progress must be focused and purposeful. We accept that trying to solve everything at once risks losing momentum, and that having a roadmap is helpful. Nevertheless, prioritisation and having clear milestones to aim for are key to avoiding drift in … Read more
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