Source · Select Committees · Public Accounts Committee
Recommendation 10
10
Acknowledged
Government services consistently fail to meet cost-recovery targets, leading to persistent financial imbalances.
Conclusion
Over the five-year period from 2019-20 to 2023-24, none of the seven government services reviewed consistently met their cost-recovery targets. Poor cost-recovery persisting over time results in a build-up of surplus and deficits in some services. Both passports and family court fees have repeatedly missed their cost-recovery targets by more than 10% each year over this five-year period.18 We asked the Treasury how it will help government bodies manage the persistent deficits and surpluses more proactively in the future. The Treasury told us that it plans to 13 Qq 26, 28, 30 14 Qq 27-28; C&AG’s Report, para 3.3 15 Qq 27, 28, 46 16 C&AG’s Report, paras 8, 2.21 17 Qq 26, 46, 18 C&AG’s Report, para 2.21 9 introduce more regular reporting, promote greater professionalism, and standardise practices to ensure a more systematic approach to fees and recovering costs.19
Government Response Summary
The Treasury acknowledged the challenge of potential inequities for users when government bodies under or overcharge for services and hopes to address this through stronger incentives for departments to encourage lower costs through efficiencies.
Government Response
Acknowledged
HM Government
Acknowledged
2.1 The government disagrees with the Committees recommendation. 2.2 However, the government agrees with the principles behind the Committee’s recommendation that cost recovery should be a conscious and transparent choice but considers improvements can be better achieved by other means. The Treasury will update the Financial Reporting Manual (FReM) to align to 6.11 of Managing Public Money (MPM) to include clearer reporting guidance for fee-charging public bodies to ensure more effective Parliamentary scrutiny and rather than an annual cycle will embed oversight through the Spending Review (SR) returns to ensure departments consider the appropriate subsidies and fees which will now occur every two years.