Source · Select Committees · Public Accounts Committee
Recommendation 9
9
Despite the Cabinet Office’s stance that ALBs should be used only as a last resort,...
Conclusion
Despite the Cabinet Office’s stance that ALBs should be used only as a last resort, 38% of business cases submitted between 2016 and 2020 did not seriously consider a long-list of alternative delivery models. One quarter of business cases submitted in the same period did not contain a cost-benefit analysis of the chosen delivery model.15 Without complete information it is difficult for the Cabinet Office and HM Treasury to determine whether the proposed ALB is the most appropriate and effective way to deliver a policy objective. This in turn can lead to complicated accountability and governance arrangements, and a poor 8 Qq 38–39; C&AG’s report, para 3.25 9 C&AG’s Report, para 3.25 10 Qq 85- 86; C&AG’s report, para 3.20 11 Q 89; C&AG’s report, Figure 16 para 3.25 12 Q 47 13 C&AG’s report, paras 14. 2.3 14 Qq 44–45 15 Qq 45–46 10 Government’s delivery through arm’s-length bodies delineation of roles and responsibilities between the ALB and its sponsor department. The Cabinet Office told us that it was considering a more stringent approach to its assessment of departmental business cases.16 Cabinet Office support
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.