Source · Select Committees · Public Accounts Committee
Recommendation 18
18
Accepted
Looking to the future, departments face several challenges which may lead to significant changes to...
Conclusion
Looking to the future, departments face several challenges which may lead to significant changes to their programmes.54 We have seen estimates of a reduction in the size of the civil service of between 5% and 25%.55 The IPA told us that it estimates a skills gap on programmes of around 3,000 across all departments, of which fewer than half may 44 Q 42 45 Q 64 46 Q 67 47 Qq 69, 70 48 Qq 67, 79 49 Q 19 50 C&AG’s report, para 1.13 51 C&AG’s report, para 1.13 52 Qq 10, 13; C&AG’s report, para 1.13 53 Q 10 54 Qq 10, 13; C&AG’s report, para 1.13 55 Q 48 Improving the Accounting Officer Assessment process 13 be considered key positions. HM Treasury, working with IPA, is completing an exercise to understand this position in more detail after taking into account, for example, the potential for efficiency savings as well as constraints.56
Government Response Summary
The government agrees that challenges may significantly change major programmes, requiring AO assessments to understand the impact. It considers defined thresholds, such as investment committee advice or IPA assurance ratings, sensible as triggers to update AOAs, with updated assessments provided to HM Treasury.
Government Response
Accepted
HM Government
Accepted
5. PAC conclusion: Government major programmes are experiencing significant challenges, such as skills gaps and inflation, which will impact on their feasibility and value for money. 5. PAC recommendation: HM Treasury and IPA should outline the extent to which current challenges may significantly change major programmes to help accounting officers determine when an AO assessment is required. They should then use these assessments to understand the impact of these challenges on programmes being delivered in line with the standards set out in Managing Public Money. 5.1 The government agrees with the Committee’s recommendation. Recommendation implemented 5.2 It is important to consider that the AO assessment process is owned by the AO and the departments, and it is for the AO and SRO to decide what they consider important and must defend that decision to Parliament 5.3 The government considers that challenges posed by high inflation, materials shortages, labour market disruption, high interest rates or other events likely to have significant impact on delivery can signal extended periods of volatility and uncertainty. It is unlikely that the supply chain and pricing disruption will quickly settle back into the stable, low interest rate, low inflation environment that has been seen for the past decade and a half and as such AOs must consider this in light of their ongoing duties to consider feasibility and value for money. 5.4 Meeting these challenges will require departments to plan and deliver projects in ways that can address this turbulence and maintain delivery outcomes. IPA continuously monitors its assurance and support activities in light of the impact that market conditions can have on project and programme performance. 5.5 The government agrees with common AO practice that having defined thresholds such as advice from an investment committee or IPA assurance ratings are sensible to have as a trigger to update AOAs. As part of the IPA’s ‘Response to Red’ process, updated AO assessments should be produced following a case conference when a project receives a red stage gate assessment. This updated AO assessment should be provided to HM Treasury to support TAP or MPRG decision making as part of the escalation process.