Source · Select Committees · Public Accounts Committee
Recommendation 7
7
Rejected
Absence of basic controls and awareness of pre-payment checks in early grant schemes.
Conclusion
We pressed witnesses about the absence of basic controls in the early schemes, and the level of consideration that had been given to how quickly these controls could have been put in place.9 DBT told us that the level of speed involved was “almost inconceivable”, but accepted that early in the pandemic the Department had not been sufficiently aware of the importance of pre-payment checks. DBT’s comments suggested it recognised that, while ministers can take responsibility for courses of action that do not meet normal tests, officials need to be in a position to advise ministers on the potential impact of any trade- offs and choices they may wish to make. We heard that DBT officials have drawn from the lessons to be learned from this experience, to enable better advice to be provided in future.10 HM Treasury told us it was still considering the question of “what would have been the optimum preparation for this scenario”.11 Recovery of losses
Government Response Summary
The government rejects the committee's implied recommendation for a single definition of basic controls in emergencies, arguing that HMT adapts controls proportionately and that existing spending frameworks provide sufficient flexibility while retaining accounting officers' responsibilities.
Government Response
Rejected
HM Government
Rejected
The government disagrees with the Committee’s recommendation. Every national emergency is different, and HM Treasury (HMT) adopts levels of control proportionate to the scale and nature of the emergency in question. It is therefore not appropriate to set a single precise definition for the basic level of control needed and exactly how the trade-offs with speed of response should be handled. The first principle, however, is that in the case of national emergency, the established spending framework continues to apply. Specifically: • accounting officers (AOs) remain responsible for departmental expenditure and for maintaining the AO standards of regularity, propriety, value for money and feasibility in relation to public spending; • departments must comply with Managing Public Money (including the requirement for HMT consent); and • requirements for appropriate budget cover, estimates authority and legal powers to spend money still apply. As seen during the COVID-19 pandemic, there is sufficient flexibility within this framework to tailor responses to the specific circumstances of the emergency in question. In such circumstances, AOs are expected to exercise sound judgement concerning the application of resources – as afforded them by Parliament – and they are responsible for the management of the associated risks and trade-offs, such as between the need for speed and the increased likelihood of fraud and error. Where appropriate, HMT may implement flexibilities within the spending framework tailored to the specific emergency, as it did during the COVID-19 pandemic, although these do not abrogate the AO’s responsibilities. In addition to these flexibilities, HMT may also enhance assurance to deal with heightened risks - for example reducing the risk of fraud by integrating the role of the Public Sector Fraud Authority into HMT approval processes. Should the AO consider that they are unable to meet these duties, they are expected to seek direction from their senior minister.