Recommendations & Conclusions
22 items
2
Conclusion
Twenty-Eighth Report - Efficiency in go…
Past experience shows that attempts to improve efficiency can inadvertently reduce the quality of services or increase costs elsewhere – what this committee has called cost shunting. Efficiency plans without a clear idea of the implications for service users have led to problems in the past. For example, when the …
Government response. The government agrees with the Committee’s recommendation. Recommendation implemented HM Treasury published at Spending Review 2021 (SR21) an updated set of Priority Outcomes and Metrics. The outcomes capture the real-world impacts for public service users that departments have committed to …
HM Treasury
3
Conclusion
Twenty-Eighth Report - Efficiency in go…
Previous efficiency programmes have over-promised and under-delivered. ‘Optimism bias’ is a long-standing problem within government where project plans are impractical and unrealistic, and do not always achieve the expected objectives. We have seen this across a range of programmes, such as Shared Service Centres and, more recently, the Defence Equipment …
Government response. The government agrees with the Committee’s recommendation. Recommendation implemented HM Treasury recognises the need to underpin the planned efficiencies and savings agreed through SR21 with departmental plans for delivery. SR21 confirmed savings of 5% against day-to-day central departmental budgets in …
HM Treasury
4
Conclusion
Twenty-Eighth Report - Efficiency in go…
Skills shortages in the civil service could compromise departments’ ability to achieve efficiency savings. A lack of skills and leadership capability has caused delays, inefficiencies, and increased costs in several previous government projects. For example, the InterCity West Coast franchise competition saw a lack of leadership and expertise contribute to …
Government response. The government agrees with the Committee’s recommendation. Declaration on Government Reform, made a number of commitments, a number of which have already been delivered, including: • The creation of a new curriculum and campus for training civil servants: £26 million …
HM Treasury
5
Conclusion
Twenty-Eighth Report - Efficiency in go…
Departments often struggle to track benefits as closely as they track costs. The Treasury holds departments to account much more vigorously for their programme expenditure than the benefits they deliver. In turn, departments are often much better at estimating, and tracking, costs than they are at tracking benefits. This can …
Government response. The government agrees with the Committee’s recommendation. Recommendation implemented Beyond the regular reporting on whether efficiencies are being achieved, Outcome Delivery Plans (ODPs) also enable government to track progress in delivering real outcomes for citizens, with agreed funding. Departments have …
HM Treasury
6
Conclusion
Twenty-Eighth Report - Efficiency in go…
Government efficiency drives tend to be one-off events rather than being embedded as a continuous priority. The Treasury believes that well-defined, tight budgets provide departments with enough of a financial incentive to strive for efficiency continuously. But its emphasis on driving efficiency from departments primarily in the run up to …
Government response. The government agrees with the Committee’s recommendation. closely with the Government Functions and other parts of the centre of government to drive the identification of further efficiencies. HM Treasury intends to do this through closer collaboration with the functions within …
HM Treasury
1
Conclusion
Twenty-Eighth Report - Efficiency in go…
On the basis of a report by the Comptroller and Auditor General, we took evidence from HM Treasury (the Treasury) and the Cabinet Office on the government’s plans to increase its efficiency as part of the Spending Review.1
Government response. The government agrees with the Committee’s recommendation. Recommendation implemented The Government agrees that plans should be put in place to allow a response to crises; and that efficiency measures must be genuinely deliverable and not impede those plans. The pandemic …
HM Treasury
7
Conclusion
Twenty-Eighth Report - Efficiency in go…
In the past, we have seen how departments failing to consider the full effects of their plans to improve efficiency have led to increased costs elsewhere in government, or have led to reductions in service quality which were costly to fix.15 For example, the National Audit Office found that the …
Government response. 2. PAC conclusion: Past experience shows that attempts to improve efficiency can inadvertently reduce the quality of services or increase costs elsewhere – what this Committee has called cost shunting. 2: PAC recommendation: HM Treasury should ensure that, in their …
HM Treasury
8
Conclusion
Twenty-Eighth Report - Efficiency in go…
We asked the Treasury how it will ensure efficiency plans consider the risk of ‘cost shunting’, where money saved in one area increases costs in another area, and whether it would be asking departments to identify where knock-on impacts could occur. The Treasury said that the Spending Review process will …
Government response. 2. PAC conclusion: Past experience shows that attempts to improve efficiency can inadvertently reduce the quality of services or increase costs elsewhere – what this Committee has called cost shunting. 2: PAC recommendation: HM Treasury should ensure that, in their …
HM Treasury
9
Conclusion
Twenty-Eighth Report - Efficiency in go…
We questioned the Treasury and the Cabinet Office on how departments are expected to estimate the impact of efficiency savings on service user behaviour, and how this is incorporated into plans for efficiency.22 The Treasury told us that it agreed with the National Audit Office’s recommendations that it should collectively …
Government response. 2.1 The government agrees with the Committee’s recommendation. Recommendation implemented 2.2 HM Treasury published at Spending Review 2021 (SR21) an updated set of Priority Outcomes and Metrics. The outcomes capture the real-world impacts for public service users that departments have …
HM Treasury
10
Conclusion
Twenty-Eighth Report - Efficiency in go…
‘Optimism bias’ refers to the tendency for project appraisers to be impractical and unrealistic, which can lead to a failure to deliver, delays, poor service quality or a need for later funding injections.24 The prevalence of optimism bias in government has been highlighted before. For example, the Shared Service centres …
Government response. 3. PAC conclusion: Previous efficiency programmes have over-promised and under- delivered. 3: PAC recommendation: HM Treasury need to ensure plans are subject to adequate challenge, testing the realism of departments’ expected savings, and considering the use of pilots where appropriate. …
HM Treasury
11
Conclusion
Twenty-Eighth Report - Efficiency in go…
We asked the Treasury and Cabinet Office what is being done to minimise optimism bias, particularly how they can ensure efficiency plans are subject to adequate challenge and properly evidenced.26 The Cabinet Office told us that government functions will help scrutinise efficiency plans, with experienced professionals able to assess project …
Government response. 3. PAC conclusion: Previous efficiency programmes have over-promised and under- delivered. 3: PAC recommendation: HM Treasury need to ensure plans are subject to adequate challenge, testing the realism of departments’ expected savings, and considering the use of pilots where appropriate. …
HM Treasury
12
Conclusion
Twenty-Eighth Report - Efficiency in go…
The Treasury told us that it is trying to prevent poor data leading to optimism bias by improving the raw financial data that government captures. It gave the new Online System for Central Reporting and Accounting (OSCAR 2) as an example of how government is capturing new and important datasets. …
Government response. 3. PAC conclusion: Previous efficiency programmes have over-promised and under- delivered. 3: PAC recommendation: HM Treasury need to ensure plans are subject to adequate challenge, testing the realism of departments’ expected savings, and considering the use of pilots where appropriate. …
HM Treasury
13
Conclusion
Twenty-Eighth Report - Efficiency in go…
We asked the Cabinet Office whether it had pushed back on any plans for reducing the size of government estates because they were over-optimistic. The Cabinet Office explained that the government’s plan to shrink the London property estate has not been progressing as quickly as it had wished due to …
HM Treasury
14
Conclusion
Twenty-Eighth Report - Efficiency in go…
The Cabinet Office has overall responsibility for capability within the civil service and should ensure departments have the capability required to achieve planned efficiency programmes.33 Capability shortfalls have led to problems on numerous occasions, such as in the InterCity West Coast franchise competition in 2012, where a lack of expertise …
Government response. 4. PAC conclusion: Skills shortages in the civil service could compromise departments’ ability to achieve efficiency savings. 4: PAC recommendation: HM Treasury needs to work with departments to understand the skills and capability required to deliver plans successfully, identifying any …
HM Treasury
15
Conclusion
Twenty-Eighth Report - Efficiency in go…
We questioned the Cabinet Office on how it can ensure capability is in place across government to deliver departments’ efficiency programmes. The Cabinet Office told us that processes such as the Outcome Delivery Plans, where outcomes are matched against resources, helps them identify where skill shortages are present.35 The Cabinet …
Government response. 4. PAC conclusion: Skills shortages in the civil service could compromise departments’ ability to achieve efficiency savings. 4: PAC recommendation: HM Treasury needs to work with departments to understand the skills and capability required to deliver plans successfully, identifying any …
HM Treasury
16
Conclusion
Twenty-Eighth Report - Efficiency in go…
We asked the Cabinet Office how it can ensure that skills are situated in the right places across government. The Cabinet Office explained how the growth in cross-government functions has helped achieve this, as has the internal government job market, since it matches people with the right skills to the …
Government response. 4. PAC conclusion: Skills shortages in the civil service could compromise departments’ ability to achieve efficiency savings. 4: PAC recommendation: HM Treasury needs to work with departments to understand the skills and capability required to deliver plans successfully, identifying any …
HM Treasury
17
Conclusion
Twenty-Eighth Report - Efficiency in go…
We asked the Cabinet Office whether it intends to reduce departments’ spending on consultants, which has been high and increasing following Brexit and COVID-19. The Cabinet Office told us it has a strong programme to try and cut the external spend, and that departments should only use external staff when …
HM Treasury
18
Conclusion
Twenty-Eighth Report - Efficiency in go…
The National Audit Office’s report described how it is important that departments track the progress of efficiency plans, enabling timely intervention and providing assurance that the benefits promised are being realised.42 We questioned the Treasury and the Cabinet Office how it will track the progress of efficiency plans, including the …
Government response. 5. PAC conclusion: Departments often struggle to track benefits as closely as they track costs 5: PAC recommendation: The Cabinet Office and Treasury should work together to ensure that the new system of departmental Outcome Delivery Plans is able to …
HM Treasury
19
Conclusion
Twenty-Eighth Report - Efficiency in go…
The Treasury described how some of the processes used to scrutinise government plans, such as benchmarking and ongoing project reviews, enable the Treasury and Cabinet Office to monitor the progress of efficiency programmes over time.46 The Cabinet Office told us that quarterly reviews are held between the Cabinet Office, the …
Government response. 5. PAC conclusion: Departments often struggle to track benefits as closely as they track costs 5: PAC recommendation: The Cabinet Office and Treasury should work together to ensure that the new system of departmental Outcome Delivery Plans is able to …
HM Treasury
20
Conclusion
Twenty-Eighth Report - Efficiency in go…
We asked the Cabinet Office how it is going to deal with the constraints of inconsistent and poor-quality data and legacy systems in tracking the progress of efficiency plans, as described in the National Audit Office’s report.51 The Cabinet Office told us that these are huge issues for government, which …
HM Treasury
21
Conclusion
Twenty-Eighth Report - Efficiency in go…
The report by the National Audit Office emphasises the need for efficiency to remain a priority on an ongoing basis, rather than only being taken seriously at major fiscal events such as Spending Reviews.53 The report describes the need for system incentives to be in place, with leadership behaviour that …
Government response. 6. PAC conclusion: Government efficiency drives tend to be one-off events rather than being embedded as a continuous priority. 6: PAC recommendation: HM Treasury and the Cabinet Office should work jointly from the centre of government to consider how best …
HM Treasury
22
Conclusion
Twenty-Eighth Report - Efficiency in go…
The Treasury told us that the nature of the tight budgets in Spending Reviews forces departments to look within their budgets for improvements and savings, which it says will cause departments to constantly seek improvement.55 The Treasury said that strengthening the finance team in each department will make departments seek …
Government response. 6. PAC conclusion: Government efficiency drives tend to be one-off events rather than being embedded as a continuous priority. 6: PAC recommendation: HM Treasury and the Cabinet Office should work jointly from the centre of government to consider how best …
HM Treasury