Recommendation 5

The Cabinet Office has not assessed or coherently identified the skills and expertise needed for monitoring and responding to companies in distress. We have previously raised concerns about the level of commercial, risk management and corporate finance expertise in government amid increasing demand for these skills, all of which are important for monitoring and responding to companies in distress. Departments and regulators face the challenge of competing with the private sector for these high-in-demand skills. The Government Commercial Function, UK Government Investments (UKGI) and HM Treasury are having to do more work to support companies with restructuring. The UKGI special situations team has been involved in over 200 company distress cases in the last six years. HM Treasury acknowledges that having the right skills and capabilities in place is a critical lesson, but also that they are currently patchy across government. There are pockets of expertise, but no one has taken responsibility for assessing the varied skills needed for monitoring and responding to companies in distress. Recommendation 5: The Cabinet Office Commercial Function should set functional standards for monitoring and responding to companies in distress. As part of this process, the Function should write to the Committee within six months, explaining: • The skill requirement across government for monitoring and responding to companies or suppliers in distress; • The current level of these skills and expertise across government and where gaps exist; • How the Commercial Function plans to close the gaps identified; and • How the Commercial Function will ensure departments know where, how and when to access support.