Source · Select Committees · Public Accounts Committee
Recommendation 8
8
Accepted
Political sponsorship and senior leadership are essential for identifying service costs effectively.
Recommendation
The Cabinet Office told us that political sponsorship and support is considered essential as well as that of senior leaders within departments.13 This aligns with government’s goal of creating a more “productive and agile state”.14 Introducing targets for getting processes and systems in place to identify the costs of services would sharpen focus; while this would require a significant cultural shift, we were told that this would be “pushing at an open door”.15 Helping departments with the practical steps they can take
Government Response Summary
The Treasury will issue an updated Dear Accounting Officer letter by July 2026 that explicitly sets expectations for Accounting Officers and senior leaders to identify, use and continuously improve service‑level cost information.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. Target implementation date: July 2026 The Treasury will issue an updated Dear Accounting Officer letter that explicitly sets expectations for Accounting Officers and senior leaders to identify, use and continuously improve service‑level cost information, focusing on understanding cost drivers and productivity opportunities. For efficiency, this letter will be issued in tandem with the forthcoming fees and charges Dear Accounting Officer letter, reflecting the close link between understanding the cost base and setting fair, transparent fees and charges. Both letters will reinforce requirements under Managing Public Money and the government’s Value for Money guidance. Compliance will be monitored through end‑year finance assessments coordinated by the Government Finance Function, drawing on departmental evidence of service‑level costing, benchmarking and benefits realisation. Findings will inform Permanent Secretary objectives and functional performance discussions. Treasury will use cross‑government forums (including the Finance Foundations Group) to share best practice, address barriers, and support departments to embed cost ownership in service governance, aligned to the Government Finance Function Strategy. Where systemic issues are identified (for example, legacy systems or fragmented service ownership), the Treasury will work with departments to agree remediation plans and timelines, with progress reviewed through existing business planning and stocktake processes.