Recommendations & Conclusions
13 items
2
Recommendation
Twenty-Eighth Report - Efficiency in go…
Accepted
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 …
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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 Ministry of Justice attempted to reduce demand for legal aid, there was a large increase in litigants in person which created extra costs elsewhere in the justice system. The collection of data around user behaviour is important when planning, implementing and running efficiency programmes in order to avoid future remedial changes with additional costs attached. However, as the Committee highlighted in its 2019 report Challenges in using data across government, government has not treated data as a valuable asset. Recommendation: HM Treasury should ensure that, in their efficiency plans, departments consider what the potential impact might be on service users, and that data around user behaviour and sentiment is tracked as programmes are implemented.
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Government response AI summary
The government agrees with the recommendation, stating it has already been implemented through the SR21 Priority Outcomes and Metrics, which include tracking user sentiment. HM Treasury guidance and recent efficiency exercises also require departments to consider impacts on service users and demonstrate deliverable proposals.
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HM Treasury
3
Recommendation
Twenty-Eighth Report - Efficiency in go…
Accepted
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 …
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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 Plan 2020–2030. These problems occur due to poor data on costs and performance, but also because departments and central government do not consistently challenge existing plans. The Treasury and Cabinet Office told us that “test-and-learn pilots” gather programme data to give departments 6 Efficiency in government the flexibility to react when programmes do not meet their assumptions. However, government needs to be more agile in responding to these results: currently too few schemes are halting early enough after showing signs of poor progress. These issues could re-emerge if government prematurely over commits to efficiencies based on changes that have occurred during the pandemic which may not endure, such as reducing the government estate as a result of staff working from home. 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.
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Government response AI summary
The government agrees, stating the recommendation is already implemented. HM Treasury uses various mechanisms, including the Chief Secretary's engagement during SR21, spending control processes, and Outcome Delivery Plans, to challenge and test the realism of departmental savings and efficiency proposals.
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HM Treasury
4
Recommendation
Twenty-Eighth Report - Efficiency in go…
Accepted
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 …
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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 its collapse, and the Common Agricultural Policy Delivery Programme suffered from a high turnover of senior leaders. Increasing the capability to conduct successful efficiency programmes may require government to ‘spend to save’, putting upfront investment in place to increase departmental capability and capacity. There is also a risk that multiple efficiency programmes rely on the same pool of specialists within government functions, to the extent that the functions do not have the capacity to meet the demand. Increased government spending on consultants as a result of EU exit and COVID-19 may well have been less efficient than building capability within the civil service. We welcome that the Cabinet Office has begun to reduce spending on consultancy and intends to build capabilities within government, as set out in its Declaration on Government Reform. Recommendations: HM Treasury needs to work with departments to understand the skills and capability required to deliver plans successfully, identifying any specialist and technical skills needed. The Cabinet Office should ensure, through its workforce planning, that there are enough resources and skills available to teams to deliver efficiency programmes and must write to us in six months on its progress in implementing the key measures within the Declaration on Government Reform.
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Government response AI summary
The government agreed with the recommendation, outlining several actions to improve civil service skills and capability, including allocating £26 million to a Leadership College, improving functional skills training with specific targets, creating a Government Consulting Hub, launching a Finance Career Framework, improving spending team skills, …
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HM Treasury
5
Recommendation
Twenty-Eighth Report - Efficiency in go…
Accepted
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 …
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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 lead to cost shunting, where an apparent cost saving in one area has an unintended negative consequence elsewhere. The timely sharing of data between departments is essential in tracking the effects of efficiency programmes across government. However, the quality and availability of data continues to be an issue. For efficiency programmes to be successful, an effective performance management system needs to be in place. This will allow the reporting of progress against milestones and increase the collection of data relating to both costs and benefits. The Cabinet Office expects that use of the new Outcome Delivery Plans, which mandate the publication by departments of what is expected from programmes, will improve transparency and accountability. However, this has only recently been implemented and is still unproven. Efficiency in government 7 Recommendation: The Cabinet Office and Treasury should work together to ensure that the new system of departmental Outcome Delivery Plans is able to track the costs and benefits of efficiency plans for government as a whole.
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Government response AI summary
The government agrees and states the recommendation is already implemented through Outcome Delivery Plans (ODPs), which track outcomes, costs, and benefits of efficiency plans. ODPs cover 2022-2025, with regular reporting and integration with existing financial monitoring and major projects assurance.
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HM Treasury
6
Recommendation
Twenty-Eighth Report - Efficiency in go…
Accepted
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 …
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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 Spending Reviews risks departments losing focus in between fiscal events and there is little evidence of a continuous improvement culture in government. Leadership behaviour that promotes a long-term view and encourages continuous improvement through a culture of openness and transparency that allows everyone to contribute must be properly incentivised. Recommendation: HM Treasury and the Cabinet Office should work jointly from the centre of government to consider how best to instil a culture of continuous improvement across government that lasts beyond this Spending Review process. 8 Efficiency in government 1 Planning efficiency savings
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Government response AI summary
The government accepted the recommendation, committing to closer collaboration with Government Functions, regularising links between functional experts and Treasury teams, and outlining plans for writing to the Committee in Summer 2022. It also highlighted the Declaration on Government Reform and its implementation to instil a …
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HM Treasury
1
Conclusion
Twenty-Eighth Report - Efficiency in go…
Accepted
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 AI summary
The government accepted an inferred recommendation about planning for crises and ensuring efficiency plans don't impede them. It highlighted existing flexibility, new Outcome Delivery Plan guidance for 2022-23, a new forecasting framework, revised AO assessment guidance, and committed to a fuller assessment of lessons learned …
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HM Treasury
10
Conclusion
Twenty-Eighth Report - Efficiency in go…
Accepted
‘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 …
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‘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 initiative fell far short of the planned savings and failed to achieve value for money and, more recently, we reported on the Ministry of Defence’s Equipment Plan for 2019–2029 including unrealistic expectations for £4.7 billion of efficiency savings, a figure for which it had no plans.25
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Government response AI summary
The government agreed with the committee's recommendation (quoted in the response) that HM Treasury needs to ensure plans are adequately challenged, testing realism and using pilots. It described implementing this by leading engagement to test departmental proposals, developing Outcome Delivery Plans, enhancing financial reporting, and …
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HM Treasury
12
Conclusion
Twenty-Eighth Report - Efficiency in go…
Accepted
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. …
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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. The Treasury described how it is working with the government functions to collect benchmarking data, which can be used to sense check information. The Treasury noted how it would like to see more improvements to benchmarking data and more analytical insight driven by the functions to help make improvements in government.29 When we asked the Treasury whether departments should start programmes if they knew the data was not good enough, it told us that departments can use predictions based on historic data, which can be refined using small test-and- learn pilots, and then scaled-up if the new data proves the initial assumptions.30
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Government response AI summary
The government agreed with the committee's recommendation (quoted in the response) that HM Treasury needs to ensure plans are adequately challenged, testing realism and using pilots. It outlined implementation through testing departmental savings proposals, developing Outcome Delivery Plans, enhancing financial reporting, and sharing best practices …
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HM Treasury
14
Recommendation
Twenty-Eighth Report - Efficiency in go…
Accepted
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 …
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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 contributed to its collapse, and the Common Agricultural Policy delivery programme, which suffered from a high turnover of senior leaders.34
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Government response AI summary
The government accepted the recommendation, outlining several initiatives like a new curriculum, Finance Career Framework, and capability-based pay for Senior Civil Service to build capability. The Cabinet Office committed to providing an update in May 2022.
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HM Treasury
16
Conclusion
Twenty-Eighth Report - Efficiency in go…
Accepted
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 …
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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 right jobs.37 The Cabinet Office also explained how the Infrastructure and Projects Authority is beginning to use specialists who can find the right people for the job on behalf of departments, and that it plans to do the same for the Digital, Data and Technology profession.38
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Government response AI summary
The government agreed with the committee's recommendation (quoted in the response) regarding HM Treasury and Cabinet Office ensuring sufficient skills and capability. It outlined specific actions including establishing a Leadership College, improving functional skills training with targets, creating a Government Consulting Hub, developing the Finance …
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HM Treasury
17
Conclusion
Twenty-Eighth Report - Efficiency in go…
Accepted
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 …
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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 they offer unique skills which would not be efficient to have permanently within government.39 The Cabinet Office aims to develop skills and capability within government and make better use of the civil service’s knowledge and experience of difficult programmes.40 We asked the Cabinet Office how it would prevent any attempted efficiencies through reducing staff numbers merely leading to replacement with temporary staff or consultants. The Cabinet Office referred 33 C&AG’s report, paragraph 24 34 Committee of Public Accounts, Thirty-first report of Session 2012–13, Department for Transport: Lessons from cancelling the InterCity West Coast franchise competition, HC 813, paragraphs 7, 14–16; C&AG’s report, para 25 35 Q 97 36 Qq. 92, 93, 95 37 Q 95 38 Q 99 39 Q 92 40 Qq. 92, 109 Efficiency in government 13 to controls to prevent this from happening, such as limits on the number of staff who can be employed in this way, controlling the money available, and controlling departments’ freedom to procure consultants externally.41 Tracking progress
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Government response AI summary
The government agreed with the committee's recommendation (implied by the conclusion's content) to build internal capability, outlining specific actions such as allocating £26 million to a Leadership College, improving functional skills training with targets, creating a Government Consulting Hub, developing the Finance Career Framework, and …
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HM Treasury
18
Conclusion
Twenty-Eighth Report - Efficiency in go…
Accepted
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 …
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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 extent to which they achieve their goals or have knock-on impacts.43 We were particularly interested in what processes were in place to monitor benefits realisation, and how they planned to mitigate the limitations of poor data when it comes to tracking progress.44 We also asked the Treasury for a detailed breakdown of which 2015 efficiency targets were met within the 2015 Spending Review period. The Treasury responded in writing that efficiency targets set at Spending Reviews cannot be tracked centrally, and that it is the responsibility of Accounting Officers to monitor and report on progress.45
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Government response AI summary
The government agreed with the committee's recommendation that the Cabinet Office and Treasury should use Outcome Delivery Plans (ODPs) to track the costs and benefits of efficiency plans. It stated ODPs for 2022-2025 are being produced to provide ongoing departmental performance pictures, supported by business …
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HM Treasury
22
Conclusion
Twenty-Eighth Report - Efficiency in go…
Accepted
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 …
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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 efficiencies more frequently. The Treasury suggested that if the finance function can have a bigger impact on departmental strategy and service delivery, then departments will unlock efficiencies year on year. The Cabinet Office added that government’s greater focus on service users, such as by using the Public Value Framework, will provide another incentive for continuous improvement since departments will need to respond to their experiences.56 We asked whether staff would be sufficiently incentivised to pursue efficiency plans which might put their own jobs at risk. The Treasury told us that it tries to encourage innovation and suggested that the prospect of career progress would be sufficient incentive for people to come forward with such ideas.57 52 Q 74, 89 53 C&AG’s report, para 33 54 C&AG’s report, para 35 55 Qq. 31, 100 56 Q 102 57 Q 101 Efficiency in government 15
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Government response AI summary
The government agreed with the committee's recommendation that HM Treasury and Cabinet Office should instill a culture of continuous improvement. It outlined plans for HM Treasury to collaborate closely with Government Functions on efficiencies and to provide written plans to the Committee by summer 2022, …
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HM Treasury