Source · Select Committees · Public Accounts Committee
Recommendation 12
12
We asked witnesses about the process for determining value for money and whether it monitors...
Conclusion
We asked witnesses about the process for determining value for money and whether it monitors whether programmes remain so. The Department told us that there are routine ‘touchpoints’ through a capability’s life, but acknowledged that it does not routinely take a step back and evaluate whether VFM has been achieved. It believes more regular evaluation of VFM is ‘worth thinking through’.30 29 C&AG’s report para 5.9 and Figure 8 30 Q 87 Improving the performance of major defence equipment contracts 13 2 Managing suppliers and learning from mistakes
Government Response
Not Addressed
HM Government
Not Addressed
The government agrees with the Committee’s recommendation. Target implementation date: Spring 2022 2.2 Although the department agrees with the Committee’s recommendation it does not agree with the Committee’s conclusion. The department assesses the value for money of all its investments. Value for money is evidenced and scrutinised at key approvals and assurance milestones and all programmes in the Government Major Programmes Portfolio must comply with HM Treasury’s Accounting Officer Assessments: guidance (2021). Programmes are also considered against the accounting officer tests where the programme is in breach, or potential breach, of the agreed performance, cost, and time envelope. 2.3 The department has a well-documented and embedded accounting officer assessment process, whereby assessments and their accompanying letters are generated by the relevant SRO, before being considered by the Director General Finance and finally decided on by the Permanent Secretary. All four standards - regularity, propriety, value for money, and feasibility - are carefully considered as part of this process. In considering value for money, all assessments are based on evidence and in line with HM Treasury guidance “…make the most plausible projection available”.1 2.4 To ensure continuous review and improvement of activities to drive value for money, the department will ensure that in the future, letters to the Committee contain more of the detailed evidence provided to the Permanent Secretary on which value for money is assessed. The Permanent Secretary writes annually to all SROs as a reminder of this obligation to the Accounting Officer and to ensure the transparency of this process and will do so again by 31 January 2022.