Recommendations & Conclusions
6 items
22
Recommendation
Twentieth Report - Monitoring and respo…
Deferred
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 …
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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.62 The Treasury told us that its special situations team, UKGI and the Cabinet Office were the “three pockets in the centre” that held the “expertise and experience in both the framework and the practice of how this all works.”63 UKGI told us that its special situations team of 18 has a total of 225 years of experience of financial distress, and has been involved in over 200 cases where distressed companies had approached government in the last six years.64 We also heard how these three central teams are “more in the restructuring business” as they have become trusted by companies who “tell us stuff confidentially so we can be part of the solution”.65
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Government response AI summary
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 more targeted approach for skills …
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HM Treasury
23
Recommendation
Twentieth Report - Monitoring and respo…
Deferred
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 …
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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 skills, are high in demand across the private sector and government. We heard how regulators face the same challenges in competing for these skills.67 The Department for Business and Trade told us that things had improved in getting people with the commercial negotiation and financial experience to be able to talk to companies, but did not specify whether this is the same experience across departments.68 Evaluation and learning
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Government response AI summary
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 at developing a more targeted …
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HM Treasury
24
Recommendation
Twentieth Report - Monitoring and respo…
Deferred
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 …
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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 evaluated robustly or at all, and the government does not know what works to improve outcomes in those areas.71 In 59 Committee of Public Accounts, Competition in public procurement, Sixth Report of Session 2023–24, HC 385, 13 December 2023, Conclusions and recommendations, para 5 60 Committee of Public Accounts, Government preparedness for the COVID-19 Pandemic: Lessons for government on risk, Forty-Sixth Report of Session 2021–22, HC 952, 23 March 2022, Summary 61 Q15 62 C&AG’s Report, para 3.6 63 Q16 64 Qq17, 83 65 Q21 66 Q53 67 Q30 68 Q69 69 Committee of Public Accounts, Use of evaluation and financial modelling in Government, Fourth Report of Session 2022–23, HC 254, 27 May 2022, para 2 70 C&AG’s Report, para 3.9 71 Committee of Public Accounts, Use of evaluation and financial modelling in Government, Fourth Report of Session 2022–23, HC 254, 27 May 2022, Conclusions and recommendations, para 1 Monitoring and responding to companies in distress 17 the case of government interventions in companies, the NAO found no indication that they are any more likely than other government spending to be formally and transparently evaluated.72
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Government response AI summary
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 future changes and how to …
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HM Treasury
25
Recommendation
Twentieth Report - Monitoring and respo…
Deferred
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 …
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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 is taking place right now”.73 It also said it would be keen to learn the lessons from the Silicon Valley Bank case and that the Financial Stability Board was carrying out an exercise to do this.74 UKGI told us that nine cases out of 10 that it examines do not result in a government intervention.75 However, the Treasury acknowledged that it does not systematically evaluate interventions or non- interventions in a way that would add understanding across government, and said that it was grateful to the NAO’s work for highlighting this.76
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Government response AI summary
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 back to the centre.
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HM Treasury
26
Conclusion
Twentieth Report - Monitoring and respo…
Deferred
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 …
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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 could not recollect where that had got to.77 The Treasury’s subsequent letter explained that the cases of Monarch and Thomas Cook highlight the challenges in recovering costs from third parties when government steps in. It said that the Department for Transport is “taking the time to thoroughly consider the most appropriate package of measures to take forward” in response to the Airline Insolvency Review, which was published in 2019.78
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Government response AI summary
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 evaluation, rather than specifically addressing …
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HM Treasury
27
Recommendation
Twentieth Report - Monitoring and respo…
Deferred
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 …
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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 or distress situations, but the Treasury told us that there would be value in looking at the way other countries structure their frameworks for intervention or non-intervention in companies.79 72 C&AG’s Report, para 3.9 73 Q70 74 Q28 75 Q18 76 Q70 77 Qq45–47 78 Correspondence from HM Treasury to Committee, 30 January 2024 79 Q54 18 Monitoring and responding to companies in distress
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Government response AI summary
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 future changes, including strengthening requirements …
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HM Treasury