Select committee: Public Accounts Committee
Recommendation 3
58th Report - Government services: Identifying costs
Published 12 Dec 2025
Addressed to HM Treasury
Public Accounts Committee Government services: Identifying costs and generating income All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Recommendation (the committee's words)
Legacy IT systems are a significant contributory factor in the cost of government services and an impediment to being able to gather better data to bring about improvements. Departments face major challenges in collecting and analysing cost data due to legacy IT systems and siloed data structures. These outdated systems are a significant cost driver, requiring additional people and processes to work around system limitations, and hinder consistent data gathering. The Cabinet Office recognises the need for Permanent Secretaries to understand their legacy estate, while DSIT has baselined government legacy systems and reviewed departmental bids for funding in the 2025 Spending Review. However, quick wins often mask deeper issues like poor data quality and entrenched cultural barriers. The lack of common data standards across government complicates benchmarking and granular cost analysis. The Shared Services strategy offers potential for improved consistency in the future, but technical solutions alone are insufficient–cultural and process reforms will be constantly needed. There is no standard policy on time recording in the civil service, and despite ERP systems offering 4 this capability, its use remains optional. The desired levels of productivity improvements will not be achieved without effective use of time for every civil servant as would be the norm in the private sector. A shift in mindset is needed to better understand how time is spent and to make use of data for meaningful insights. recommendation a. DSIT should provide the Committee with a baselined list of legacy systems identified and the services they support alongside the Treasury Minute response to this report. b. In addition, DSIT should,within six months from the publication of this report, indicate which legacy systems should be targeted as a priority for further investigation into how far their limitations result in additional people and process costs in the operational business areas they support
From: Public Accounts Committee, 58th Report - Government services: Identifying costs (HC 1421), 12 December 2025
Government response
The government responded to the whole report on 1 April 2026 (deadline 12 February 2026).
Summary written by Accountability Index from the government's response. It is not the government's own words.The government agrees with the Committee's recommendations on cost ownership, costing guidance, single service owners and data leadership, and disagrees with one on prioritising legacy systems for further investigation.
- On accountability for costs, the government agrees and sets a target date of July 2026: the Treasury will issue an updated Dear Accounting Officer letter setting expectations that senior leaders identify, use and improve service-level cost information.
- On the six-month request to prioritise legacy systems for investigation, the government disagrees, stating it "does not agree that this recommendation should be an immediate priority of the next 6 months" given work already in progress.
- On the baselined list of legacy systems, the government agrees and will share "the available data" with the Committee chair by March 2026, but does not intend to make the list publicly available because of cyber-attack concerns.
- On Senior Service Owners, the government agrees with a target of March 2027: it will issue a letter encouraging Permanent Secretaries to assess gaps within 6 months and appoint SSOs within 12 months, with the timescale "accelerated if possible".