Source · Select Committees · Public Accounts Committee
Recommendation 7
7
Not Addressed
In addition to its guaranteed loan schemes, the Department provided £21.8 billion in grant funding...
Conclusion
In addition to its guaranteed loan schemes, the Department provided £21.8 billion in grant funding to local authorities to distribute to businesses in their areas. The Department set the eligibility criteria and provided guidance on grant making to local authorities.20 In the first three grant schemes, which account for £11.5 billion21 of this funding, the 11 Qq 10, 13, 67, 72–77, 99–101; C&AG’s Report, page 134 12 Q 67; C&AG’s Report, page 130 13 Q 24 14 Qq 9, 17 15 C&AG’s Report, Introduction, page 130 16 C&AG’s Report, pages 130–133 17 Department for Business, Energy & Industrial Strategy, Annual report and accounts 2020–21, 25 November 2021, Accountability report, page 121 and Note 19, page 215; C&AG’s Report, page 133 18 Q 10; C&AG’s Report, page 132 19 If 11.15% implies a fraud loss of £4.9 billion, 7.5% would equate to approximately £3.3 billion 20 Q 67; C&AG’s Report, pages 130, 133–134 21 Department for Business, Energy & Industrial Strategy, Annual report and accounts 2020–21, 25 November 2021, Note 4.4, page 167: £10,824 million in 2019–20 plus £683 million in 2020–21 = £11,507 million or £11.5 billion 10 Department for Business, Energy & Industrial Strategy Annual Report and Accounts 2020–21 Department estimates 8.9%, or just over £1 billion, is lost to fraud and error.22 Again, this figure represents a central estimate in a range between £514 million (4.4%) and nearly £1.6 billion (13.4%).23 The Department told us that this was an estimate that it has low confidence in.24 In written evidence, the Institute of Chartered Accountants in England and Wales (ICAEW), a regulator of the accountancy and audit profession, believes there is a significant chance that this underestimates the level of fraud and error; however, it also considers that the Department has had sufficient time to collect the information it needs from local authorities and perform adequate checks to calculate a more accurate estimate.25 As a result of these material levels of fraud and erro
Government Response Summary
The government response discusses the Programme, committing to meet the indicative timeframe and recruit/retain skills, and manages short-term risks to value for money; it doesn't address the conclusion about grant funding.
Government Response
Not Addressed
HM Government
Not Addressed
1. PAC conclusion: The considerable uncertainty facing the Programme has caused a loss of the critical skills needed to develop the business case, created delays and increased the risk of nugatory spending and health and safety incidents. 1. PAC recommendation: As soon as possible, the Clerks should: • commit to meet the indicative timeframe set out by the Commissions to resolve uncertainties around how the Programme will be governed and the work to be undertaken. This should involve engaging all parties, such as domestic parliamentary committees, and setting interim milestones; and • set out how they will recruit and retain the skills and expertise they recognise is needed to deliver the Programme. During this period of uncertainty, the Sponsor Body, Delivery Authority and House authorities should set out a clear plan and structure as to how they will manage the short-term risks to value for money to avoid nugatory expenditure. First bullet - Indicative timeframe The Clerk of the House and the Clerk of the Parliaments commit to implement this recommendation, where it is within their powers to do so. Target implementation date: The Commissions’ timeframe for the debates in both Houses (before the summer recess) has been achieved, with the House of Commons debate tabled for 12 July 2022 and the House of Lords debate announced for 13 July 2022. The Commissions’ report sets out a timeframe for the drafting of the necessary regulations in autumn 2022. The Clerk of the House and the Clerk of the Parliaments are committed to meeting the indicative timeframe in the Commissions’ Report, set out at paragraph 73. However, the Committee will be aware that, subject to the agreement of the two Houses to the relevant motions, laying of the necessary regulations is not within the control of either the Clerk of the House or the Clerk of the Parliaments. Although officials in Parliament will be closely involved in the drafting of the regulations under section 10 of the 2019 Act, the timetable for bringing forward the regulations for approval by each House is for the Government to determine. Nevertheless, the intended timeframe for the debates (to take place before the summer recess) is on track to be met, with the House of Commons debate tabled for 12 July 2022 and the House of Lords debate announced for 13 July 2022. The Clerk of the House and Clerk of the Parliaments undertake to provide any assistance required to facilitate the indicative timeframe for the regulations being met. The Clerk of the House and the Clerk of the Parliaments have made preparations to support the Commissions to take timely decisions to enable the establishment of the Client Board and Programme Board, subject to the Houses’ approval of the motions. In addition to the indicative dates given at paragraph 73 of the Commissions’ report, milestones for the various strands of transition activity will be recorded and monitored via a shared plan (The Phase 1 Plan) between Parliament and the Delivery Authority. The new governance structure, and the Programme Board in particular, will play an important role in monitoring progress against milestones. Paragraph 51 of the Commissions’ Report notes: “The Domestic Committees of the two Houses will also have an important role to play in advising the Commissions on the discharge of their new functions.” The Clerks will ensure that the domestic committees of both Houses are engaged effectively so they are in a position to provide informed advice to the Commissions. Second bullet - skills and expertise The Clerk of the House and the Clerk of the Parliaments commit to implement this recommendation. Target implementation date: Not applicable, as this recommendation is ongoing. As noted in paragraph 27 of the Commissions’ report, the Delivery Authority will remain in place, and will remain independent, under the Commissions’ proposals. It is worth noting that the vast majority of the people working on the programme are employed by the Delivery Authority or its supply chain. The CEO of the Delivery Authority will remain accountable for the skills and expertise to deliver the Programme, and their independence remains unchanged. The creation of the Client Team as a new Joint Department within Parliament is the responsibility of the Clerk of the Parliaments and Clerk of the House, and they will be responsible for ensuring it has the right capabilities. An interim CEO was announced on 26 May 2022. Dr Patsy Richards has been seconded from the House of Commons to provide the leadership and stability needed by the sponsor function at this time. The interim CEO is assessing capability and capacity gaps within the sponsor function to ensure it has the necessary skills and expertise. This exercise will be completed by the end of the summer recess. Proposals by the two Clerks regarding the application of TUPE legislation to transfers of those staff working in the Sponsor Body aim to mitigate the risk of losing staff with the right