Source · Select Committees · Public Accounts Committee
Recommendation 21
21
Accepted
Ensure departments possess or access essential specialist skills for company distress interventions throughout their lifecycle.
Recommendation
Departments must have, or be able to access, the skills, expertise and capacity needed through the whole lifecycle of any intervention in a company, including to prepare for and respond to company distress scenarios.56 We have repeatedly highlighted longstanding issues with a lack of specialist skills in the civil service and the challenges with attracting and retaining specialist staff.57 We recently found in our 2023 Bulb Energy report that the need for commercial and corporate finance skills across government has increased but these are in limited supply.58 We highlighted the importance of all departments being able to access these skills to make appropriate judgements concerning activities that link the public and private sectors. Our report on Competition in public procurement raised concerns that the government may not fully understand the commercial skills and 51 Q59 52 Qq64–65 53 C&AG’s Report, paras 3.1, 3.7–3.8 54 Qq67–68; NAO Report, page 20 55 Dr John Tribe (Senior Lecturer in Law, University of Liverpool) (LGD0001) 56 NAO Report, page 7; C&AG’s Report, Figure 1 57 Committee of Public Accounts, Specialist skills in the civil service, Thirty-Second Report of Session 2019–21, HC 686, 7 December 2020, Summary 58 Committee of Public Accounts, Bulb Energy, Seventy-Fourth Report of Session 2022–23, HC 1232, 1 November 2023, Conclusions and recommendations, para 5 16 Monitoring and responding to companies in distress capabilities needed across government to implement far-reaching changes to the public procurement landscape.59 We have also highlighted the variability in departments’ risk management capabilities.60
Government Response Summary
The government agrees to the recommendation and aims to implement it by April 2025. The Cabinet Office Commercial Function will collaborate with other bodies to develop a more targeted approach for building skills in monitoring and responding to companies in distress.
Government Response
Accepted
HM Government
Accepted
5.1 The government agrees with the Committee’s recommendation. Target implementation date: April 2025 5.2 The Government Commercial Functional Standard refers to ‘Sourcing Playbook’ guidance regarding the monitoring of the supplier financial standing and identifying and responding to financial distress. This, together with the work by the Government Finance Function on developing the Risk Management Strategy to strengthen leadership and enhance credibility, collaborate across boundaries and enhance capabilities and drive professionalism precludes the need for setting new functional standards. 5.3 The Government Commercial Function Learning and Development Programmes have a risk-based approach running through all commercial training programmes as well as dedicated sessions with this focus. Both training and guidance documents signpost departments to sources of further support, including sourcing of expertise such as UKGI as outlined in response to recommendation 4, and the Cabinet Office proactively engages with departments to identify gaps in capability with the commercial standards process benchmarking department performance. 5.4 The Government Risk Profession was formally established in 2022. The core principles of the profession’s Risk Management Strategy include the need for risk management planning to be central to government planning, policy making, service delivery, monitoring, and reporting activities and that risks are best managed closest to source with professionals and skills embedded in departments at different levels. 5.5 The Cabinet Office Commercial Function will work with the Risk Centre of Excellence in the Government Finance Function, UKGI and HM Treasury’s Special Situations Team to look at a more targeted approach to develop the skills required across government for monitoring and responding to companies or suppliers in distress.