Recommendation 1

HM Government Accepted

The government agrees with the Committee’s recommendation. Recommendation implemented The Government agrees that plans should be put in place to allow a response to crises; and that efficiency measures must be genuinely deliverable and not impede those plans. The pandemic demonstrated that the spending framework has sufficient flexibility to respond to crises by providing time limited funding at short notice. For example, accessing the resourcing requirements for responses to unexpected events or emergencies are now part of the Outcome Delivery Plan guidance from 2022-23, ensuring that this is considered early alongside efficiency decisions. Cabinet Office (Civil Service Human Resources) works with government departments to ensure that robust and flexible departmental resourcing plans are in place, including a range of options such as redeployment, internal surge models and other flexible resourcing routes. In addition, HM Treasury guidance requires departments to retain flexibility in their budgets to be able to respond to unexpected events: Consolidated Budgeting Guidance, requires departments to identify around 5% of their DEL budgets for the purpose of contingency planning. This can be in the form of an unallocated provision within their budget or a list of options to reprioritise resources if needed. HM Treasury also recognised the need for deliverable efficiency measures. A savings and efficiency exercise was conducted ahead of the most recent Spending Review; HM Treasury and Government functions scrutinised deliverability of the plans put forward by departments. Appreciating the need for efficiency measures to be deliverable alongside maintaining service delivery, HM Treasury has incorporated this into efficiency planning. So, for example, when developing plans for headcount reductions to wind down staffing increases required to respond to EU Exit and the pandemic, the targets have been set excluding operational staff recognising their role in delivering essential services. HM Treasury has been considering the lessons learnt throughout the pandemic. As the previous Chief Secretary to the Treasury set out in his letter to the Treasury Committee in April last year, responding to the pandemic required HM Treasury to use the spending control framework more flexibly than during ‘normal’ times. For example, the Treasury increased delegated authority limits to enable departments to respond more quickly than during ordinary business. And, of course, departmental budgets were significantly increased at short notice to respond to the unprecedented pressures placed on them. 1.7. In addition, the pandemic exposed different approaches taken to forecasting of expenditure across departments and the challenges of forecasting new, demand-led programmes. Given the importance of forecasting in ensuring resources are properly allocated, the Treasury has prepared a new forecasting framework to support departments. The Treasury also facilitated a review for the Civil Service Board of the application of the Accounting Officer (AO) processes during the initial phases of the pandemic which identified various lessons, including the need for more support to AOs and on the role of the Finance Function. Revised AO assessment guidance was published in December 2021. The Treasury has committed to writing to the Committee with a fuller assessment of lessons learnt, building on the former Chief Secretary’s letter, later this year.