Source · Select Committees · Public Accounts Committee
Recommendation 9
9
We questioned the Treasury and the Cabinet Office on how departments are expected to estimate...
Conclusion
We questioned the Treasury and the Cabinet Office on how departments are expected to estimate the impact of efficiency savings on service user behaviour, and how this is incorporated into plans for efficiency.22 The Treasury told us that it agreed with the National Audit Office’s recommendations that it should collectively assess the effects, behavioural impact and knock-on consequences of reforms, but stressed that these judgments can be inherently difficult. The Treasury expects departments to provide an initial assessment of the effects on service users, whilst their assessment of the likely impact of efficiency programmes are subject to further stress testing, including by experts in data, major projects or property. The Treasury also said it plans to learn from similar attempts at reforms in the past, such as the automation of services. The Treasury said it was hopeful the ‘Public Value Framework’, recommended by the Barber review, will improve departments’ ability to assess the initial impacts of reforms.23 Optimism bias
Government Response
Not Addressed
HM Government
Not Addressed
2.1 The government agrees with the Committee’s recommendation. Recommendation implemented 2.2 HM Treasury published at Spending Review 2021 (SR21) an updated set of Priority Outcomes and Metrics. The outcomes capture the real-world impacts for public service users that departments have committed to achieve with their SR21 settlements. Agreed metrics are being used to track these impacts and include metrics that measure user sentiment with public services. Departments are required to report on their progress against these metrics, which enables Ministers and officials to identify outcomes at risk of not being achieved and take prompt action to improve performance. 2.3 Treasury guidance also requires departments to consider the impact of their plans on the wider economy and service users. For example, the Green Book (2.3) requires departments to appraise social value, also known as public value, based on welfare economics principles and ideas and concerns overall social welfare efficiency, not simply economic market efficiency. Therefore, social or public value includes all significant costs and benefits that affect the welfare and well-being of the population (eg, carbon impacts), not just market effects. 2.4 The Green Book (2.12) also guides users to run stakeholder workshops to consider the longlist analysis and selection of the shortlist, including key experts and stakeholders. This method brings together the results of research, advice of experts, and knowledge of stakeholders 2.5 In addition, the Magenta Book (1.1) instructs users to include an evaluation that is useful, credible, robust, proportionate and tailored to the needs of various stakeholders, such as decision-makers, users, implementers and the public. The outputs should be usable and valuable by responding to potential users' needs. 2.6 And in its recent Efficiency and Savings exercise, HM Treasury required departments to demonstrate that their savings and efficiencies proposals were credible and deliverable. Starting before the formal launch of the Spending Review, HM Treasury commissioned departments to identify efficiencies and savings in line with Green Book principles. The proposals were then reviewed, where appropriate, by the Government functions. 2.7 The Chief Secretary to the Treasury led a process of engagement in summer 2021 to test departmental savings and efficiency proposals to test whether proposals were deliverable. This process also involved the Government Functions reviewing relevant efficiency proposals to ensure they were realistic and deliverable. These sessions agreed steps for departments, Government Functions and HM Treasury to further develop plans before being agreed at the Spending Review.