Source · Select Committees · Public Accounts Committee
Recommendation 12
12
Not Addressed
Government activity and private financing models lack robust evaluation frameworks
Recommendation
The National Audit Office’s (NAO) report on evaluating government spending highlighted that much of government’s activity is either not evaluated robustly or not evaluated at all, despite the government’s commitment to evidence-based decision-making.22 In addition, there 17 C&AG’s Report, para 3.26-3.27 18 C&AG’s Report, para 3.27-3.29 19 C&AG’s Report, para 3.26 20 C&AG’s Report, Figure 6 21 C&AG’s Report, para 1.7 22 C&AG’s Report, Evaluating government spending, Session 2021–22, HC 860, December 2021, p 15 10 have been no assessments of the merits of private financing models relative to public procurement. Attempts have been made to remedy this issue, such as in 2021 when the government set up the Evaluation Task Force to support best practice in public policy evaluation across its departments. The following year, the Task Force published the evaluation strategies setting out how departments would undertake and learn from evaluation activity.23
Government Response Summary
The government's response describes its existing pre-project appraisal process using the Green Book to ensure value for money, but does not commit to or address the recommendation for robust post-project evaluation or comparative assessments of financing models.
Government Response
Not Addressed
HM Government
Not Addressed
2.1 The government agrees with the Committee’s recommendation. Recommendation implemented 2.2 The government’s 10 Year Infrastructure Strategy sets out several of the main basic models available to deploy private finance into projects, many of which have been and continue to be highly successful in delivering infrastructure investment. 2.3 In general, while some model archetypes might be suitable for different markets or different asset types, the selection of a financing model will be highly dependent on the specifics of a given project (e.g. the risk profile, maturity of technology, and so on). The Treasury's preferred model for any type of infrastructure project is the one that offers the best value for money, and it appraises proposals on a case-by-case basis using the Green Book. 2.4 Contracting authorities should design their model with suitable provisions and appropriate risk transfer based on the specific project at hand ensuring value for money. This means that the appropriate model will often be a bespoke version of an existing basic model. NISTA provides advice and guidance to contracting authorities, and the Treasury teams and NISTA work together to implement the 10 Year Infrastructure Strategy including through considering how private finance can deliver the government’s infrastructure priorities. 2.5 The Treasury evaluates the costs and benefits of alternative options – including financing models – as part of the Business Case process to identify the preferred model for each project and to ensure value for money is achieved for each infrastructure investment.