Select Committee · Public Accounts Committee

Lessons for government: monitoring and responding to companies in distress

Status: Closed Opened: 13 Dec 2023 Closed: 28 May 2024 17 recommendations 10 conclusions 1 report

Direct intervention in the private sector has generally been seen as a last resort by the Government, with private sector companies allowed to fail as part of the efficient working of markets and the economy. The Government’s approach in this area is now changing, with the pandemic, war in Ukraine and the energy crisis all …

Clear

Reports

1 report
Title HC No. Published Items Response
Twentieth Report - Monitoring and responding to companies i… HC 425 13 Mar 2024 27 Responded

Recommendations & Conclusions

6 items
22 Recommendation Twentieth Report - Monitoring and respo… Deferred

Specialist skills for company distress are concentrated centrally, resulting in patchy government capabilities.

The Treasury told us that having the right skills and capabilities in place is “a really critical lesson” highlighted by the NAO’s report. It acknowledged that these skills are currently “patchy across government”.61 The relevant specialist skills for responding to company distress situations are concentrated mainly at the centre of …

Government response. The government agrees with the recommendation to address patchy skills across government, setting an April 2025 target. It outlines existing guidance and training but commits to the Cabinet Office Commercial Function working with relevant bodies to look at developing a …
HM Treasury
23 Recommendation Twentieth Report - Monitoring and respo… Deferred

Departments and regulators face ongoing challenges in securing high-demand commercial and financial skills.

Nonetheless, the Treasury reiterated that it is up to departments and regulators to ensure they have the capability and capacity to discharge their duties, including understanding what financial expertise they need.66 The Department for Business and Trade explained how the kinds of skills it requires, including commercial, financial and accounting …

Government response. The government agrees with the recommendation regarding skills and capabilities across government, setting an April 2025 target. It refers to existing guidance and risk management frameworks, and commits to the Cabinet Office Commercial Function working with other bodies to look …
HM Treasury
24 Recommendation Twentieth Report - Monitoring and respo… Deferred

Government company interventions are not consistently or robustly evaluated, hindering learning and accountability.

Evaluation is a systematic assessment of the design, implementation, and outcomes of an intervention.69 It is important for learning what works and why, and to demonstrate accountability for the use of public money.70 Our work on the use of evaluation in government found that much of government activity is not …

Government response. The government agrees with the recommendation on the importance of evaluation and sets a target date of July 2024. It acknowledges that evaluation of company cases has not been formalized and will work with Cabinet Office and UKGI to consider …
HM Treasury
25 Recommendation Twentieth Report - Monitoring and respo… Deferred

Treasury acknowledges government's current lack of systematic evaluation for company interventions and non-interventions.

We asked the witnesses about how robustly government collates and shares evaluation findings and lessons on this topic. The Treasury suggested that this was something they “can probably be a bit more systematic on”. It provided the example of the covid support business grant schemes as a “systemic evaluation that …

Government response. The government agrees with the recommendation to systematically evaluate interventions and non-interventions, setting a target date of July 2024. It commits to working with Cabinet Office and UKGI to consider future changes, potentially including placing conditions on departments to report …
HM Treasury
26 Conclusion Twentieth Report - Monitoring and respo… Deferred

Challenges persist in recovering costs from third parties after airline insolvencies.

We asked the witnesses whether there had been any learning from the experiences of airline collapses about industry insurance schemes and also how government manages the risks around recuperating money from private insurers. UKGI suggested that there was some work undertaken to identify where there might be similar risks but …

Government response. The government agrees with the recommendation and aims for a July 2024 implementation, acknowledging that evaluation of company cases has not been formalized. It states HM Treasury will work with Cabinet Office and UKGI to consider future changes to internal …
HM Treasury
27 Recommendation Twentieth Report - Monitoring and respo… Deferred

Value in exploring international frameworks for company intervention and non-intervention approaches.

We also asked the witnesses whether they looked to different international regimes to learn any lessons about how to deal with companies and sectors that might be in trouble. The Treasury and the Cabinet Office said that each country is unique and will have its own way of handling insolvency …

Government response. The government agrees with the recommendation and aims for a July 2024 implementation, but focuses its response on improving and formalizing the internal evaluation of company distress cases. HM Treasury will work with the Cabinet Office and UKGI to consider …
HM Treasury

Oral evidence sessions

1 session
Date Witnesses
17 Jan 2024 Hannah Gray · UK Government Investments, Jess Glover · HM Treasury, Neil Johnson · Department for Business and Trade, Sir Gareth Rhys Williams CB · Cabinet Office View ↗

Correspondence

2 letters
DateDirectionTitle
6 Feb 2024 Correspondence from Gareth Rhys Williams CB, Government Chief Commercial Office…
6 Feb 2024 Correspondence from Jessica Glover, Director General, Growth and Productivity, …