Source · Select Committees · Public Accounts Committee
Recommendation 11
11
Accepted
Cabinet Office failed to produce central business case, leading to rejected funding bids.
Recommendation
The Cabinet Office told us that it did not produce a business case for its current strategy as it believed time was of the essence in terms of both cost opportunities and the fact that old systems were coming to the end of their contracts. It did not want to “put the cart before the horse” in terms of the detailed work needed on costs and benefits and felt that this would be better done at the cluster level.15 Instead, it produced a “Case for Change” which lacked the requisite level of detail on costs, benefits and risks.16 As part of the 2021 Spending Review, three clusters submitted bids, totalling £759 million, to HM Treasury for funding to deliver the Shared Services Strategy.17 HM Treasury rejected all three bids due to concerns that the Cabinet Office and clusters had not done enough work to develop robust cost estimates or to consider fundamental elements of the strategy, including governance arrangements and cluster design.18
Government Response Summary
The government agrees to develop a hybrid business case/updated case for change by May 2024, which will address the previous lack of detail on costs, benefits, and risks, and will be assured by the IPA.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. Target implementation date: May 2024 (following Full Business Cases from Clusters) Upon Strategy launch, pace of delivery was prioritised, therefore business case development was led at the cluster level. Practical implication of a full business case is a centrally delivered programme, which was avoided as having the clusters act as one would have meant that the ‘convoy’ would have only been moving at the rate of the slowest cluster. Additionally, the Strategy is not a centrally funded programme, there are five individual programmes of work seeking funding and approval to be considered on their own merit by HM Treasury and Cabinet Office. A full business case would have added an additional layer of bureaucracy and gone against government norms. Guidance on the use of business cases is set out in the Government Functional Standard 002; they apply to Programmes & Projects (as defined in the same standard) and the HMT Green Book. As outlined in Annex A of the Green Book, Strategy teams, and the Portfolios that manage programmes and projects do not normally have business cases, they are set budgets based on spending reviews and business planning processes. As part of this recommendation a hybrid business case/updated case for change will be developed. This takes the key areas of a green book programme business case, that are relevant, and embeds them in our case for change, to cover all areas whilst not confusing it with the cluster business cases. This will be assured by the Infrastructure and Projects Authority (IPA). The National Audit Office (NAO) have agreed this is an acceptable approach.