Recommendation 4

The Department has regularly failed to follow public spending rules and across the Departmental Group there is a track record of failing to comply with the requirements of Managing Public Money. The Department is required to obtain approval from the Treasury before committing to expenditure where such authority is needed. The Treasury has confirmed that £1.3 billion of the Department’s spending in 2020–21 did not have HM Treasury consent and was therefore ‘irregular’. The Treasury has stated that ‘in the vast majority of cases’ this was because either the Department and/or the NHS had spent funds without approval or in express breach of conditions. While the Department consciously relaxed financial controls during its pandemic response, this is not the first-time such instances of non-compliance have been identified. In 2019–20 the value of unapproved special payments across the Departmental Group was estimated as £18 million. Recommendation: The Department should write to us by October 2022 setting out the systems and processes it has established as part of its ‘financial reset’ to ensure the regularity of expenditure and compliance with spending controls across the Departmental Group going forward.