Select committee: Public Accounts Committee
Recommendation 7
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)
However, current obligations are focused on wider overall value for money and there are no specific objectives or accountability for Permanent Secretaries or senior leaders to collect detailed data on costs at the service level.8 Although the Cabinet Office and HM Treasury expect permanent secretaries to understand their cost drivers and how they evolve, the level of sophistication is often insufficient.9 Departments should be better incentivised to collect the information that is currently lacking. HM Treasury told us this could be done through clarifying accounting officers’ responsibilities for understanding their detailed costs and following this up through end of year financial assessments.10 The Treasury plans to clarify expectations for permanent secretaries in an upcoming “Dear Accounting Officer” letter.11 Providing central visibility of departments’ maturity levels would also help by shining a light on what others are doing across government.12 5 C&AG’s Report, para 1.4 6 Qq 84, 106 7 Q 84 8 Qq 105, 106 9 Qq 86, 89, 90, 94, 106 10 Q 107 11 Q 93 12 Q 110 8
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".