Source · Select Committees · Public Accounts Committee
Recommendation 6
6
Government still does not have a good grip on how much taxpayers’ money is being...
Recommendation
Government still does not have a good grip on how much taxpayers’ money is being spent on cross-government priorities. The Treasury has acknowledged the need for more timely, transparent financial information on cross-government areas of work, including both EU Exit and the Covid-19 response. Before the NAO’s analysis, it did not have its own comprehensive information on government spending on EU Exit for 2019–20 or any earlier period, although it is now tracking information in-year for 2020–21. It has relied on departmental processes to ensure money on EU Exit has been used as expected. Departments are expected to publish information on EU Exit spending in their 2019–20 Annual Reports, but these have been delayed due to Covid-19 and the Treasury has identified inconsistencies in what has been presented so far. The Treasury plans to use its new OSCAR II finance system to collect better information from departments in the future, and this functionality is planned to be introduced in phases over the next year. It is not clear how this system will overcome difficulties in recording data from multiple bodies, especially that which does not fit into accounting categories, such as spending on Covid-19 or EU Exit. Recommendation: The Treasury should set out how it plans in future to have the additional tools needed to deal with cross-government spending issues, over and 8 Whitehall preparations for EU Exit above the existing Accounting Officer framework of control. This should cover how it will assure the quality and consistency of information departments provide, and how its systems will provide meaningful information on areas of spending which don’t meet “accounting definitions”. Whitehall preparations for EU Exit 9 1 Learning from EU Exit preparations
Government Response
Not Addressed
HM Government
Not Addressed
6.1 The government agrees with this recommendation. Re commendation implemented 6.1 HM Treasury has established a dedicated central team tracking COVID-19 and EU Exit funding decisions. This team centrally records all funding decisions and works with spending teams to maintain a record of departmental spend against that funding. 6.2 HM Treasury has been providing updates on both funding and spend to the Committee. For example, the department wrote to the Committee in November 2020 setting out how much had been spent by departments against their EU Exit budgets in the first six months of 2020-21. 6.3 In addition to its existing managing and reporting processes, HM Treasury is in the process of upgrading the Online System for Central Accounting and Reporting (“OSCAR”). This aims to provide a more straightforward solution to inputting, storing and updating the “single source of truth” for spending data. 6.4 HM Treasury has also continued to adapt and improve its cross-government accounting guidance to address challenges in reporting spending on cross-government priorities, such as COVID-19; particularly regarding materiality and the allocation of indirect costs (for instance, staff working between projects). 6.5 In addition, it is reviewing the Annual Report and Accounts (ARA) guidance for reporting COVID-19 and EU Exit spend and has written to the Committee on this. Performance reporting guidance now clarifies that departments must summarise and link the main areas of spend to department goals, strategic objectives and priority outcomes. This includes information on the impact of EU Exit and COVID-19 on departmental activity and outcomes within their 2020-21 performance reports. Departments will be asked to report on dedicated COVID-19 interventions (including public expenditure) and analyse wider resources deployed in the government response. EU Exit expenditure should also be reported in the ARAs.