Source · Select Committees · Public Accounts Committee
Recommendation 5
5
Accepted
Set out how the Department ensures robust oversight and accountability for third parties delivering major policies.
Recommendation
It is not clear how the Department holds to account third parties that deliver multi-billion-pound programmes on its behalf. The Department stated that responsibility lies with the commercial bank lenders and local authorities and that it is the Department’s role to enable, support and challenge them. HM Treasury’s Managing Public Money guidelines are clear that accounting officers are personally responsible for the resources of their own organisation, even when working with other organisations. This is a point also made to us by the Institute of Chartered Accountants in England and Wales. The Committee is clear that accountability for the Department’s resources lies with the Accounting Officer, and we are concerned that a laissez faire approach to Departmental oversight may lead to taxpayers money not being properly protected. Recommendation 5: The Department should set out how it retains robust oversight and challenge of third parties delivering major policies and holds these bodies to account for achieving value for money and protecting taxpayer interests.
Government Response Summary
The government agrees and states it uses designated Accounting Officers for public bodies, an Arm’s Length Body Review Programme, and Senior Responsible Officers for each scheme to ensure oversight and accountability. DBT is currently considering how to best manage future relationships and ensure consistency following machinery of government changes.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. Recommendation implemented Public bodies have a pivotal role in the delivery of departmental policy objectives. DBT has 19 bodies in its more immediate delivery chain which carry out a wide range of functions on behalf of government. This includes the delivery of public services, provision of independent advice, as well as the regulation of different sectors. Whilst the sources of income vary for different bodies, they are all equally bound by the duty to assure Parliament and the public of high standards of probity in the management of public funds. To support them in doing this, the Principal Accounting Officer for DBT has designated the Chief Executives of these bodies as Accounting Officers; responsible for ensuring that their organisation has robust governance, decision-making and financial management arrangements in place. Crucially, Accounting Officers must scrutinise significant policy proposals and plans for major projects to ensure that spend meets the high standards of regularity, propriety, value for money, and feasibility. Meaningful oversight by DBT is exercised through a comprehensive and robust framework of engagement. The sponsorship arrangements form a key part of this, and DBT applies the Cabinet Office Sponsorship Code of Good Practice to ensure that rigorous expectations and standards are being met in respect of relationship management, the setting of strategy and objectives, outcome assurance, financial oversight, and governance and accountability. Bodies are also subject to reviews as part of the Arm’s Length Body Review Programme - the objectives of which aim to ensure that bodies remain accountable, and operate efficiently, effectively, aligned with the government’s priorities. Ultimately, reviews provide a mechanism for ensuring that bodies deliver outstanding public services and value for money for the taxpayer. Following the machinery of government (MOG) changes in February 2023, DBT is considering how best to manage its future relationship with public bodies and the type of assurance arrangements that should be established to monitor risk and performance. Beyond that each scheme or support programme delivered via third parties is overseen by a departmental Senior Responsible Officer. It is their role to ensure effective oversight of all aspects of delivery and to protect public money. DBT is considering how best to ensure consistency of such delivery following the MOG changes.