Source · Select Committees · Public Accounts Committee
Recommendation 8
8
When proposing a new ALB, the sponsoring department must submit a business case to ministers...
Conclusion
When proposing a new ALB, the sponsoring department must submit a business case to ministers at both the Cabinet Office and HM Treasury. Each business case must fulfil a number of requirements set by the two departments, including demonstrating the need for an ALB and identifying both a long-list and a short-list of alternative delivery options. The NAO found that not one of the 24 business cases submitted between 2016 and 2020 included all of the details requested by the Cabinet Office, but many of them were still approved.13 The Cabinet Office acknowledged that, in an ideal world, all business case requirements would be fully complied with, and noted that there is room for it to be tougher in its assessment of cases.14
Government Response
Acknowledged
HM Government
Acknowledged
2.1 The government agrees with the Committee’s recommendation. Target implementation date: January 2022 2.2 The government will continue to require that proposals to establish new arm’s length bodies (ALBs) are supported by a business case. Such business cases must: • follow HM Treasury’s Green Book: appraisal and evaluation in central government, including by structuring the business case around the Five Case Model; • assess how the functions of the proposed ALB pass at least one of the government’s three tests for delivery at arm’s-length; • include a long-list options appraisal, a fuller assessment of the shortlisted options, and cost-benefit analysis of the preferred option; and • explain how the proposed ALB will be established, governed, and reviewed. 2.3 To support departments in meeting these requirements more consistently, the Cabinet Office will develop an updated internal business case checklist by Spring 2022.