Recommendation 7

HM Government Acknowledged

The Government partially accepts this recommendation. We entirely agree with the principle that senior management of Government public bodies should have clear lines of accountability and should be held to account for the delivery of objectives. The Government has a comprehensive system of clear accountabilities for its public bodies. The roles and responsibilities of both the Department for Transport (DfT) and the senior leadership of its public bodies are clearly set out in documentation and actively managed. In practice, Chief Executives of public bodies have regular and open lines of communication with the Department’s Permanent Secretary and with junior Ministers, supported by a robust internal governance architecture, led and assured by a sponsorship function. Executives and Boards have a clear mission—communicated and agreed by DfT—to deliver a programme to plan, time and budget. This is hard-wired into performance against agreed objectives, key performance indicators (KPIs) and annual business plans, for which delivery is overseen by the Departmental Sponsor. In turn these performance metrics are factored into organisational and individual performance assessment (and where appropriate, performance-related pay). The Government disagrees that senior management of Government public bodies are unaccountable for overruns. The Boards of all ALBs (Arm’s Length Bodies) are accountable to DfT for their performance and effective use of resources. As Principal Accounting Officer (PAO), DfT’s Permanent Secretary reports to parliament on the day-to-day running of DfT and its ALBs, including the budget. The Permanent Secretary delegates financial authority to an Accounting Officer (AO) within each public body (usually the Chief Executive) who reports to the PAO on their organisation’s use of public money. The duties of an AO are set out in Chapter 3 of Managing Public Money. They include specific obligations to account for stewardship of resources, assurance to parliament and the public of high standards of probity in the management of public funds, and a responsibility to carry out procurement and project appraisal objectively and fairly, using cost benefit analysis and by seeking good value for the Exchequer. The Government agrees that performance should be incentivised. Our ALBs have clear objectives to deliver infrastructure to time, cost and quality and the performance of senior staff is considered against achievements. As set out in response to recommendation 5, we agree Parliamentary scrutiny is necessary but disagree with the need to implement a formal duty. A number of the Department’s major projects currently provide information through detailed 6-monthly reports that enable effective, additional parliamentary scrutiny at regular intervals (e.g. Crossrail, HS2).