Source · Select Committees · Public Accounts Committee
Recommendation 20
20
Acknowledged
Charged services lack transparency in disclosing full cost details and over-recovery funding.
Conclusion
The NAO reported the charged services it examined did not fully fulfil their disclosure requirements on areas such as unit costs, the cost-recovery targets, objectives, the extent and explanation for over or under-recovery.39 The lack of transparency affects public confidence and understanding of what they are paying for. The Treasury agree transparency is essential and that departments should clearly explain their fees, confirm it has appropriate consents, and document any changes made.40 We asked how this works in practice to ensure transparency for users that all the cost elements they are being charged for relate to the service. We noted that there is a higher risk, when fees over recover, to fund broader department priorities without disclosing this clearly to fee payers. The Treasury told us that such decisions must be made transparently, with departments clearly distinguishing between the cost of providing the core service and any supplementary policy-related charges approved by Parliament.41 Written evidence we received from Amnesty International UK and Migrant Voice also highlighted when services, such as visas, over-recover, unrelated costs should not be passed onto fee payers.42
Government Response Summary
The Treasury will update the Financial Reporting Manual (FReM) to align to 6.11 of Managing Public Money (MPM) by Spring 2026 to include clearer reporting guidance for fee-charging public bodies to ensure more effective Parliamentary scrutiny and will continue to keep this under review including considering as part of a wider review of Central Government financial reporting.
Government Response
Acknowledged
HM Government
Acknowledged
4.1 The government disagrees with the Committee’s recommendation. 4.2 The government agrees that published information on fees and charges should be improved. This needs to be balanced against the wider aim to reduce the financial reporting burden and efforts to improve timeliness of financial reporting more generally. The Treasury will update the Financial Reporting Manual (FReM) to align to 6.11 of Managing Public Money (MPM) by Spring 2026 to include clearer reporting guidance for fee-charging public bodies to ensure more effective Parliamentary scrutiny. 4.3 The government will continue to keep this under review including considering as part of a wider review of Central Government financial reporting and consider if this will be sufficient or whether additional reporting requirements are necessary to achieve the Committee’s objectives.