Source · Select Committees · Public Accounts Committee
Recommendation 12
12
Acknowledged
Persistent fee imbalances create inequities, forcing future users to overpay or current users to subsidise.
Conclusion
The NAO report highlighted that persistent imbalances can also create potential inequities for users. When government bodies undercharge for services, cumulative losses are often recouped through higher fees for future users. Conversely, when services over-recover, current users end up overpaying.22 We were interested to hear how the Treasury make sure users are not unfairly affected. The Treasury acknowledged this is a challenge and hopes to address this through stronger incentives for departments to encourage lower costs through efficiencies.23
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.