Incomplete Public Project Cost-Benefit Analysis

#22 —

Public Accounts Committee

Recommendation: The condensed timetable for introducing the schemes meant that a lot of the standard documentation that would accompany such a major policy initiative—business cases, options appraisal and detailed cost-benefit analysis—wasn’t undertaken back in the spring.57 HM Treasury asserted that the …

Not Addressed

#6 —

Transport Committee

Recommendation: Without having completed a full analysis of the wider economic impacts, it is difficult to see how the Government has fully assessed the levelling-up agenda and the case for different NPR options. Leaving out these key elements of analysis means …

Gov response: The Government accepts this recommendation and will publish the terms of reference for this work before the summer recess. The Government anticipates that work on the study will take around 18 months. Preparatory work has …

Accepted

#13 — Home Office underestimated large accommodation site set-up costs due to optimism bias and inadequate expertise.

Public Accounts Committee

Recommendation: We were concerned by the Home Office’s assessment of the set-up costs to convert the two former RAF bases to accommodation. At the outset, the Home Office estimated that such costs would be £5 million for each site, but the …

Gov response: 2.1 The government agrees with the Committee’s recommendation. Recommendation implemented 2.2 A raft of measures has been implemented to address weaknesses. The programme was recently restructured to deliver smaller sites, requiring lighter touch refurbishment and …

Accepted

#10 — Home Office unable to explain significant additional escort training costs for Rwanda scheme.

Public Accounts Committee

Recommendation: The Home Office has estimated that it would cost £11,000 to fly each relocated individual to Rwanda. Witnesses told us that this was an internal estimate and actual costs would depend on a number of variables. The Home Office will …

Gov response: 1.1 The government agrees with the Committee’s recommendation. Recommendation implemented 1.2 The Home Office has already set out the funds paid to the Government of Rwanda as part of the Migration and Economic Development Partnership …

Not Addressed

#1 — Provide comprehensive cost estimates and actual expenditures for the new Office for Value for Money.

Treasury Committee

Recommendation: The Treasury must provide an estimate of how much the OVfM will cost including the cost of any external consultants it intends to procure, and then provide the actual cost of OVfM after it completes its initial work. (Recommendation, Paragraph …

No Published Response

#22 — Home Office failed to adequately assess acquisition risks and costs for Northeye site.

Public Accounts Committee

Recommendation: When the Chief Secretary to the Treasury approved the acquisition of the Northeye site on 25 March 2023, he noted that the value-for-money case was marginal and based on assumptions that were highly uncertain.71 The cost of remediating the building …

Under Consideration

#15 — Home Office failed to complete a full business case for the Northeye site acquisition.

Public Accounts Committee

Recommendation: The Small Ministerial Group, established around November 2022, implemented concessions to the process of acquiring sites, including dispensing with the requirement for a full business case before approving acquisitions. The Home Office began drafting an outline business case for the …

Under Consideration

#2 — Set out changes to ensure Home Office investment decisions use comprehensive information and transparent consultation

Public Accounts Committee

Recommendation: In its haste to purchase the Northeye site, the Home Office ignored opportunities to properly understand the risks and costs of developing it, leading to poor value for money for the taxpayer. The Home Office asserts it did a “fair …

Under Consideration

#14 — Uncertainty remains regarding precise consumer/taxpayer funding balance for the £22 billion CCUS programme

Public Accounts Committee

Recommendation: The Department told us it expects around three quarters of the allocation of financial support of almost £22 billion will be from levies on consumers (such as those using power generated by the Net Zero Teesside project).46 The remaining 25% …

Gov response: 3.1 The government agrees with the Committee’s recommendation. Target implementation date: Summer 2025 3.2 The department continuously assesses the affordability and value for money of government support for CCUS as part of key policy and …

Not Addressed

#7 — Department and Treasury agree CCUS funding limits but recognise substantial contingent liabilities

Public Accounts Committee

Recommendation: A major factor in the failure of the second CCUS competition was the lack of agreement between the Department and HM Treasury on funding limits.15 The Department told us that this time it had agreed an affordability envelope with HM …

Gov response: Introduction from the Committee Carbon capture, usage and storage (CCUS) technologies capture carbon before it is released into the atmosphere and store it permanently underground. They can be applied to a range of industrial applications, …

Not Addressed

#3 — Assess the full CCUS programme's affordability for taxpayers and consumers amid cost of living pressures

Public Accounts Committee

Recommendation: The Department and HM Treasury have yet to assess the full financial impact of the CCUS programme on taxpayers and consumers. The costs of the CCUS programme are significant: in November 2024 the government announced £21.7 billion of funding over …

Gov response: The government agrees with the Committee’s recommendation. government support for CCUS as part of key policy and decision-making processes to keep the UK on the least cost pathway to net zero, including Carbon Budget Delivery …

Accepted

#8 — HMRC significantly underestimated additional tax revenue from online marketplace VAT liability legislation.

Public Accounts Committee

Recommendation: In January 2021 government introduced legislation making online marketplaces liable for VAT from overseas sellers, resulting in £1.5 billion of additional tax a year. This is five times greater than HMRC estimated at the time.15 We asked HMRC why this …

Gov response: 1a. PAC recommendation: HMRC should assess why the additional tax it now collects from online marketplaces is five times greater than it predicted. In particular, how much is due to underestimating the scale of evasion, …

Partially Accepted

#26 — HS2 Ltd fails to monitor total spending on environmental mitigation schemes.

Public Accounts Committee

Recommendation: HS2 Ltd does not monitor how much in total it spends on environmental mitigation. For example, we asked HS2 Ltd how much it was spending on wildlife migration schemes such as for the great crested newt at Halse Copse. In …

Gov response: 4.1 The government agrees with the Committee’s recommendation. Target implementation date: Summer 2025 4.2 The department intends to provide the Committee with a preliminary response in its letter to the Committee before the Summer recess …

Not Addressed

#28 — MoJ lacks confidence in securing resources for criminal justice reforms

Public Accounts Committee

Recommendation: We asked witnesses for a breakdown of the £477 million received in the 2021 Spending Review, and an outline of what it achieved. We were told that it “depends on what the counterfactual is”. Without that funding, MoJ told us …

Gov response: 6.1 The government agrees with the Committee’s recommendation. Recommendation implemented: April 2025 6.2 In response to this recommendation, the Ministry of Justice has written to the Committee alongside this Treasury Minute response.

Not Addressed

#27 — Ministry of Justice cannot quantify total spending on Crown Court backlog accurately.

Public Accounts Committee

Recommendation: As the NAO report found, MoJ cannot put a figure on how much has been spent on addressing the backlog in the Crown Court, as actions to address the backlog are spread over different parts of the criminal justice system.73 …

Gov response: 6.1 The government agrees with the Committee’s recommendation. Recommendation implemented: April 2025 6.2 In response to this recommendation, the Ministry of Justice has written to the Committee alongside this Treasury Minute response.

Not Addressed

#6 — Set out total spending and impact of investments on Crown Court backlog reduction.

Public Accounts Committee

Recommendation: MoJ could not tell us which of the actions it funded from nearly £500 million of additional funding it received through the 2021 Spending Review had the biggest impact on reducing the backlog, nor could it quantify what it expects …

Gov response: The government agrees with the Committee’s recommendation. Committee alongside this Treasury Minute response.

Accepted

#18 — Ministry of Justice has not assessed additional costs incurred for urgent prison place delivery

Public Accounts Committee

Recommendation: We asked MoJ if it has assessed the costs of needing to deliver prison places so urgently, such as paying contractors more to take on a higher level of risk.62 MoJ said it had not and indicated this could be …

Gov response: 4.1 The government agrees with the Committee’s recommendation. Recommendation implemented 4.2 As the Committee notes, there have been acute issues in responding to prison capacity which have also led to additional costs in the Criminal …

Accepted

#4 — Set out methodology to estimate Criminal Justice System costs due to prison capacity pressures.

Public Accounts Committee

Recommendation: The prison capacity crisis has led to decisions and inefficiencies which represent poor value for money. Maintaining and making best use of the existing prison estate represents better value than building new places. However, capacity constraints mean that MoJ and …

Gov response: The government agrees with the Committee’s recommendation. Recommendation implemented As the Committee notes, there have been acute issues in responding to prison capacity which have also led to additional costs in the Criminal Justice System, …

Accepted

#46 — MHCLG expects Building Safety Levy to have minimal impact on housing supply.

Public Accounts Committee

Recommendation: We asked MHCLG about the potential impacts of the Building Safety Levy on housing provision. MHCLG said it had not published any impact assessment or produced specific numbers, but believed the impact would be relatively small. It told us that …

Gov response: 7.1 The government agrees with the Committee’s recommendation. Target implementation date: December 2025 7.2 The government will write to the Committee before the end of 2025 to provide an update on the interaction between remediation …

Accepted

#7 — Publish formal assessment of remediation policies' impact on housebuilding targets and identify mitigation actions.

Public Accounts Committee

Recommendation: We are not convinced that MHCLG is taking the potential impact of its remediation plans on wider housebuilding targets seriously enough. The government has pledged to build 1.5 million homes during this Parliament. The construction sector is reporting workforce shortages. …

Gov response: The government agrees with the Committee’s recommendation. update on the interaction between remediation policies and housebuilding ambitions. Specifically on the Building Safety Levy, the government will publish an impact assessment alongside the draft levy regulations …

Accepted

#15 — Department reviewing strategic options for loan book, including sale or consolidation with other loans

Public Accounts Committee

Recommendation: We therefore asked the Department how, if it did not have estimates of future costs beyond 2025–26, it was modelling the expected balance of costs against income in future years. It replied that it was conducting 24 Qq 62, 73; …

Gov response: 3.1 The government agrees with the Committee’s recommendation. Target implementation date: March 2026 3.2 The department continues to keep its long-term strategic options under review. The department commissioned external advice on its strategic options in …

Not Addressed

#14 — Department conducted minimal analysis of future loan management costs beyond March 2025

Public Accounts Committee

Recommendation: The Department has conducted minimal analysis of the costs of managing the loans over their lifetime, with no assessment of the factors that might increase costs or reduce income. It forecast that it would spend £17.3 million over the three …

Gov response: 3.1 The government agrees with the Committee’s recommendation. Target implementation date: March 2026 3.2 The department continues to keep its long-term strategic options under review. The department commissioned external advice on its strategic options in …

Not Addressed

#12 — Conduct urgent analysis on targeted HETV Audio-Visual Expenditure Credit uplift for domestic productions

Culture, Media and Sport Committee

Recommendation: We recommend the BFI urgently conducts analysis on the potential design and return on investment of a targeted uplift to HETV Audio-Visual Expenditure Credit for domestic productions with budgets of £1 million to £3 million per hour. The Government should …

Gov response: The government has shown its commitment to keeping the UK’s Audio-Visual Expenditure Credit (AVEC) competitive by providing additional support for independent films at a rate of 53% and introducing a 5% uplift in relief for …

Not Accepted

#20 — Provide clarity on public expenditure for industrial strategy and Growth Mission through Spending Review.

Business and Trade Committee

Recommendation: We recommend that through the Spending Review the Government provides clarity about the sum of public expenditure that will be allocated to the industrial strategy and the wider Growth Mission over the remainder of this Parliament. (Recommendation, Paragraph 91) Pro-business …

Gov response: 12.1. The government is investing billions to support the Industrial Strategy’s 8 growth driving sectors, including with £4bn of additional capital through the British Business Bank, and up to £4.3bn for Advanced Manufacturing. Through these …

Accepted

#29 — Government lacks precise data on digital procurement spend and future demand pipeline.

Public Accounts Committee

Recommendation: Government lacks data on spend and the pipeline of supply and demand. Available estimates from third parties suggest that government spends at least £14 billion annually on digital procurement, but government has not been able to provide a more precise …

Gov response: 5.1 The government agrees with the committee’s recommendation. Target implementation date: December 2025 5.2 The GCF Digital & Data Team will set out the process to leverage commercial insights from data held across the eco-system, …

Accepted

#5 — Set out how to ensure data and capability for informed technology supplier spending decisions.

Public Accounts Committee

Recommendation: Government’s ability to get the best deals with technology suppliers is being hampered by its lack of knowledge of what it is spending or its future needs. Government estimates that it spends over £14 billion each year on digital commercial …

Gov response: The government agrees with the committee’s recommendation. from data held across the eco-system, which will include the development of a standard framework for procurement platforms as well as the delivery of the central digital platform, …

Accepted

#18 — Ministerial decisions on industry support trade-offs lack explicit, detailed methodology

Public Accounts Committee

Recommendation: We asked the Department how it balances trade-offs when making decisions about support, and how it makes this explicit. Officials told us that it assesses interventions using HM Treasury’s five principles. Proposals are then put to Ministers who make decisions …

Gov response: 4.1 The government agrees with the Committee’s recommendation. Target implementation date: Summer 2026 4.2 The government is aligning industry support with strategic priorities, including the Industrial Strategy. Following the Green Book Review 2025: Findings and …

Not Addressed

#23 — Estimated lifetime value of T Levels based on uncertain assumptions.

Public Accounts Committee

Recommendation: The Department’s current “best judgement” is that T Levels will be 25% more valuable than other level 3 qualifications (around £23,000 per student over their lifetime, in 2019–20 prices).71 It will get a better understanding of this uplift as the …

Not Addressed

#2 — Publish comprehensive evaluation of Skilled Worker visa route’s costs, benefits, and impact on skill shortages.

Public Accounts Committee

Recommendation: The Home Office has not had a full understanding of how immigration has helped to address skill shortages or the unintended consequences of the much higher than anticipated use of the Skilled Worker route. More people have used the Skilled …

Gov response: The government agrees with the Committee’s recommendation. Immigration White Paper on 12 May. Skilled worker evaluation. The evaluation of the Skilled Worker route found that visa holders were primarily motivated to come to the UK …

Accepted

#24 — Department lacks comprehensive analysis comparing cost-effectiveness of incentives against direct teacher pay increases.

Public Accounts Committee

Recommendation: We asked the Department if it has assessed whether spending on initiatives such the Early Career Framework (£131 million budget in 2024–25) provides better outcomes than simply increasing teachers’ pay. The Department did not confirm if it had undertaken this …

Gov response: 6.3 Evidence suggests that pay can be an effective lever at scale; for example, the National Foundation for Educational Research (NFER) estimates that a 1% improvement in competitiveness of school teacher pay increases recruitment by …

Not Addressed

#10 — Department lacks robust value-for-money analysis for teacher recruitment initiatives and spending

Public Accounts Committee

Recommendation: We asked the Department how confident it was that the initiatives funded through the £700 million represented the best value for money. It told us it had allocated the funding in a way to make what is described as “as …

Gov response: 2.3 The department is investing in analysing and evaluating policies to understand impact, maximise value for money and ensure focus on our best evidenced levers. The department’s strategy is underpinned by a robust and expanding …

Accepted

#6 — Assess effectiveness and value-for-money of teacher pay against other recruitment initiatives

Public Accounts Committee

Recommendation: The Department recognises pay as important in recruiting and retaining teachers, but is less clear on how it considers pay alongside other initiatives and how schools and colleges can afford pay rises. Pay is important in recruiting and retaining teachers. …

Gov response: The government agrees with the Committee’s recommendation. inform which actions best ensure schools and colleges have sufficient high-quality teachers. Evidence suggests that pay can be an effective lever at scale; for example, the National Foundation …

Accepted

#23 — Treasury prioritises private finance for incentivised risk management and expert due diligence.

Public Accounts Committee

Recommendation: We asked the Treasury how it decides on which private finance model to use, and how it assesses the additional cost of private finance against the benefits of risk transfer. The Treasury told us that the benefit of private finance …

Gov response: 5.1 The government agrees with the Committee’s recommendation. Target implementation date: May 2026 5.2 Identifying where the private sector is better placed to identify, assess, price and manage risks – and structuring contracts to reliably …

Accepted

#22 — Inappropriate risk transfer to private sector incurs disproportionately high costs for government.

Public Accounts Committee

Recommendation: There are many risks to delivering major infrastructure projects, such as financing risk, construction risk, and demand for the asset being lower than expected.49 These risks should be transferred to those best able to manage them, and when they are …

Gov response: 5.1 The government agrees with the Committee’s recommendation. Target implementation date: May 2026 5.2 Identifying where the private sector is better placed to identify, assess, price and manage risks – and structuring contracts to reliably …

Accepted

#14 — Historical choice of private financing for 'fiscal illusion' is not appropriate practice

Public Accounts Committee

Recommendation: Historically, private financing was sometimes selected over public financing because it did not increase short-term government borrowing. This kept public sector debt levels down, as the assets were considered off-balance sheet for national accounts purposes. The Office for Budget Responsibility …

Gov response: 2.1 The government agrees with the Committee’s recommendation. Recommendation implemented 2.2 The government’s 10 Year Infrastructure Strategy sets out several of the main basic models available to deploy private finance into projects, many of which …

Accepted

#5 — Develop an infrastructure financing toolkit for quantifying and managing public project risks

Public Accounts Committee

Recommendation: There is no comprehensive framework for considering risk allocation between the public and private sector when working in partnership. Risks should be borne by those who are best able to manage them and should be priced appropriately. Not all risks …

Gov response: The government agrees with the Committee’s recommendation. manage risks – and structuring contracts to reliably incentivise and capture that expertise – is key to private finance projects being able to demonstrate value for money. Where …

Accepted

#2 — Evaluate alternate infrastructure financing models to identify preferred options for project types

Public Accounts Committee

Recommendation: The Treasury has not identified which financing models represent value for money for different types of infrastructure assets. A range of financing models are currently in use for delivering public infrastructure including but not limited to: Contracts for Difference; Regulated …

Gov response: The government agrees with the Committee’s recommendation. Recommendation implemented The government’s 10 Year Infrastructure Strategy sets out several of the main basic models available to deploy private finance into projects, many of which have been …

Accepted

#3 — Provide government departments and public routine access to UKRI funding allocation data.

Public Accounts Committee

Recommendation: There is insufficient clarity about, and visibility of, where UKRI is investing its money. Knowing where UKRI invests its money is essential to good financial management, while also helping organisations in the private sector to guide their investment decisions. For …

Gov response: The government agrees with the Committee’s recommendation. UKRI Gateway to Research website. UKRI Gateway to Research provides ongoing open access to data on projects, people, organisations and outcomes from 2006 to the present day and …

Accepted

#18 — Green Book changes aim to improve place-based interventions by aggregating benefits from multiple projects.

Public Accounts Committee

Recommendation: We asked about how changes to the Green Book will ensure that projects are effective place-based interventions. The Treasury outlined that the key objective of the place-based business case is to bring together all the different projects that will make …

Gov response: 3. PAC conclusion: We are not yet convinced there is a coherent approach to making decisions on major projects as part of wider plans for local areas and national missions. 3. PAC recommendation: Alongside its …

Accepted

#26 — Total cost of the family justice system remains unknown to the MoJ.

Public Accounts Committee

Recommendation: MoJ told us that there are separate accounting officers for each part of the system, and that each could account for the costs for which they were responsible.62 MoJ accepted, however, that they did not know the cost of the …

Gov response: MoJ told us that there are separate accounting officers for each part of the system, and that each could account for the costs for which they were responsible. MoJ accepted, however, that they did not …

No Published Response

#4 — GT-EPD scrutiny limited due to informal negotiation and absent economic impact analysis.

Business and Trade Committee

Recommendation: We welcome the extension of the treaty parliamentary scrutiny period from 10 to 20 sitting days, as set out in the Trade Strategy. However, we regret that scrutiny of the GT-EPD are limited due to the trade-related provisions having been …

Gov response: The previous Secretary of State for Business and Trade delivered statements to the House regarding UK-US trade on 2 April, 12 May and 18 June, and the previous Minister for Trade delivered a statement on …

Not Addressed

#3 — UK exporters face worse US trade terms; GT-EPD economic impact remains uncertain.

Business and Trade Committee

Recommendation: We welcome the Government’s work to date in securing swift tariff relief for key sectors under the GT-EPD and acknowledge the progress made in challenging circumstances. However, we must acknowledge that UK exporters are now trading with our most significant …

Gov response: President Trump’s State Visit was a valuable opportunity to further strengthen our existing economic relationship with the US. During the visit, the UK and US announced the Technology Prosperity Deal that builds on the EPD. …

Accepted

#17 — Provide analysis of Single Trade Window delays and outline renewed implementation timeline and costs.

Environment, Food and Rural Affairs Committee

Recommendation: Future border systems must prioritise ease of use, interoperability, and support for trade growth. In its response to this Report, the Department should provide an analysis of the reasons for the Single Trade Window’s delay. It should also outline the …

Gov response: The recently published Trade Strategy reiterates the Government’s commitment to the delivery of a Single Trade Window and a commitment to minimising burdens and frictions by those trading internationally. Delivery of the Single Trade Window …

Not Addressed

#71 — Undertake rigorous cost-benefit analysis of investing in a fully inclusive education system.

Education Committee

Recommendation: The Government should undertake a rigorous cost-benefit analysis to understand the short- and long-term economic benefits of investing in a fully inclusive education system. (Recommendation, Paragraph 254)

Gov response: The Government is grateful to the Education Select Committee for its inquiry report into Solving the SEND Crisis and we welcome the opportunity to respond to the Committee. Every child should have a childhood rich …

Not Addressed

#27 — Airport expansion risks climate targets and lacks demonstrated economic benefits outweighing environmental harm.

Environmental Audit Committee

Recommendation: Whilst it may be possible for the Government to deliver airport expansion alongside its climate and environment targets, we are concerned that the proposed environmental impact from airport expansion will make such targets significantly more difficult to achieve and at …

Gov response: The Government’s legal commitment to net zero by 2050 is non-negotiable. Airport expansion, including a third runway at Heathrow, has always been factored into carbon budget planning, and the refreshed Carbon Budget and Growth Delivery …

Not Addressed

#23 — Set out detailed analysis on aviation impacts and mitigations if airport expansion proceeds.

Environmental Audit Committee

Recommendation: If the Government proceeds with airport expansion it should set out to the Committee in its response to this report, in-depth analysis on: • How it will ensure carbon costs will reach the level the Government expected in the Jet …

Gov response: The Government is committed to the use of carbon pricing, through the UK Emissions Trading Scheme (UK ETS) and Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), to drive cost-effective decarbonisation of the aviation …

Not Addressed

#7 — Current airport planning approach lacks strategic UK-wide consideration and scrutiny.

Environmental Audit Committee

Recommendation: The Government should be taking a more strategic approach that should consider wider growth and planning across the whole of the UK. Finally, we are very disappointed that this approach does not allow proper consideration and scrutiny of airport expansion …

Gov response: The review of the ANPS, which commenced in October, will take into consideration changes to legislation, policy and data, and the scheme decision announced in November. It will also ensure that any proposed scheme meets …

Accepted

#4 — Publish analysis of London airport expansion's economic impact on wider UK regions.

Environmental Audit Committee

Recommendation: In response to this report the Government should set out how the planned expansion of London Airports will impact the aviation and airport sector around the rest of the UK and the economic impact and level of growth in the …

Gov response: The Government has been clear that any airport expansion proposals need to demonstrate that they contribute to economic growth. As set out in response to Recommendation 1, as part of the ANPS review, the DfT …

Partially Accepted

#2 — Commission detailed research and set out expected economic growth from airport expansion.

Environmental Audit Committee

Recommendation: Before formally agreeing any airport expansion plans, the Government should: (Recommendation, Paragraph 14) 1) Commission more detailed and serious research into the net economic benefits. (Recommendation, Paragraph 15) 2) Clearly set out what level of growth to the UK economy …

Gov response: The Government has been clear that any airport expansion proposals need to demonstrate that they contribute to economic growth. As set out in response to Recommendation 1, as part of the ANPS review, the DfT …

Accepted

#1 — Unclear economic benefits of airport expansion due to insufficient government evidence.

Environmental Audit Committee

Recommendation: While airport expansion is likely to provide some economic growth through growth of the aviation sector, the level of growth to the UK economy provided by airport expansion is unclear and the Government has so far failed to provide substantial …

Gov response: The Government has been clear that any airport expansion proposals need to demonstrate that they contribute to economic growth as well as being delivered in line with the UK’s legally binding climate change commitments and …

Accepted