Source · Select Committees · Public Accounts Committee
Recommendation 5
5
Accepted
Write to the Committee outlining committed and planned spending of £55 million for jobs service.
Recommendation
It is not fully clear how the Department is spending the £55 million allocated for 2025–26 to test elements of the new jobs and careers service. In the 2024 Autumn Budget, the government allocated £55 million for the Department to invest in developing and testing elements of the jobs and careers service in 2025–26. The Department is spending some of this money on a coaching academy to upskill its work coaches, on ‘pathfinder projects’ in some parts of the country and on developing digital services, but has not yet allocated all of the £55 million. The Department says that funding is available for good proposals coming forward from different parts of the organisation. But it did not indicate how much of the £55 million has so far been committed and how much is left to be allocated. We are now several months into the financial year so it is important that the Department works out quickly how to make best use of the funding, rather than making rushed decisions at the last minute. recommendation Alongside its Treasury Minute response, the Department should write to us setting out how much of the £55 million has been committed and what its plans are for using the remainder of the money. 6
Government Response Summary
The government agrees and confirms the recommendation is implemented, providing a detailed breakdown of how the £55 million for 2025-26 has been allocated across tests and trials (£15m), alternative delivery solutions (£5m), digital activity (£20m), and resources/staffing (£13m, including a £2m contingency).
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. Monitoring Financial Resilience (MFR) report but its monitoring and engagement with companies is conducted year-round. Where Ofwat identifies an elevated concern or a need for the company to take action regarding the risks to its financial resilience, the regulator engages on a more frequent or targeted basis, requiring more information from the company and, as required, reporting on improvements, including action plans to address the issues identified. In 2025, six water companies have had injected or made an unconditional commitment to invest new equity totalling £1.9 billion, of which £1 billion relates to four companies which were in Ofwat's "Action Required" or "elevated Concern" categories in last year's MFR report (Southern Water, South East Water, Affinity Water and SES Water). Should a regulated company become insolvent, the Special Administration Regime (SAR) exists to ensure that services to customers continue while the business is rescued or transferred to a new owner. In the majority of cases the costs of the SAR process would be borne by the company's investors/creditors, but if this is not possible then any costs incurred by the Government can be recovered from the company's customers through future bills. The government has announced that a new single regulator will be established, bringing together the functions of Ofwat, Environment Agency, Natural England and the Drinking Water Inspectorate into one regulator. Ofwat will remain in place during the transition to the new regulator and government will ensure they provide the right leadership to oversee the current price review and investment plan during that time. The Independent Water Commission provided several recommendations on strengthening financial resilience. The government is considering the Commission's recommendations and will respond to them in its White Paper due to be published for consultation this autumn. Ofwat will work with Government over the next six months and beyond to ensure that this approach continues to improve the financial resilience of the water sector.