Source · Select Committees · Public Accounts Committee
Recommendation 2
2
Accepted
Set out plan for building and retaining essential skills across Treasury, DMO and NS&I.
Recommendation
We are concerned that the Treasury, DMO and NS&I will not have the necessary skills, experience, and institutional knowledge needed to overcome the challenges they face now, and in the years to come. The DMO and NS&I are both specialist organisations, with distinctly different skills sets and experience to those normally found in the Treasury. The Treasury faces challenges in maintaining the appropriate expertise in its debt management functions to be able to adequately scrutinise and challenge the work of the DMO and NS&I, which can be affected by staff turnover levels. The DMO is entering a period of transition with the current CEO due to retire at the end of June 2024 after being in post for over 20 years. This role has a long and steep learning curve and benefits from having deep, specialist knowledge which can only be developed over time. The Treasury has started the process of finding a replacement but needs to ensure a successor is willing to be in post long enough to develop this expertise. The DMO’s small executive team has other key members nearing retirement, highlighting the need for a clear succession plan. The Treasury asserts that NS&I has been upskilling and increasing the size of its workforce to reduce reliance on contractors and make it a better IT customer as it delivers its Rainbow Programme. NS&I currently outsources its entire back- office and customer-facing operations to a single service provider and the Rainbow Programme, which is already significantly delayed owing to a poorly executed procurement process, will see it move to a multiple service provider model. Recommendation 2: The Treasury should set out, as part of the Treasury Minute response, its overarching plan for building and retaining skills and experience, which should include, but not limited to, the following: • How NS&I is upskilling its workforce to deliver its Rainbow Programme; 6 Managing government borrowing • Details of the DMO’s succession planning, in particular an asse
Government Response Summary
The government agreed, stating the recommendation is implemented. NS&I plans to upskill its workforce by insourcing IT and service integration skills and growing commercial expertise, while the DMO has a developed resourcing strategy including succession planning.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. Recommendation implemented It is important for HMT, DMO, and NS&I, to have the right skills and resources to execute their duties effectively, given the critical role played in delivering value for money for the taxpayer. To support delivery of the transformation programme (formally known as Rainbow), NS&I has plans in place to upskill the organisation by insourcing functional skills in IT and service integration, alongside growth in its commercial and contract management expertise. In the context of a wider Civil Service Headcount cap, NS&I has retained the ability to grow their headcount to support core transformation activity whilst using external contractors and consultants where needed to provide additional short-term support. The DMO has a developed resourcing strategy to maintain skills and capacity, and enhance resilience for its operations, including to identify where there is greater potential for the loss of critical skills. It has examined the key person risk for all direct reports of its Executive Committee, considering mitigation measures for each person or skill set, the route to hire suitable skills, and to capture and retain knowledge within the team. The DMO has developed an action plan for both short and longer term by role, and is now expanding knowledge and providing further training across the organisation to help develop specialist skills. In December 2023, HMT launched a campaign to recruit a new DMO Chief Executive. HMT announced the successful candidate on 16 April 2024, after undertaking a full and open recruitment. The DMO Chief Executive is a vitally important and high-profile leadership role, which is further reflected in the recent upgrade to Director General, with an increase in the salary. The role has been offered on a permanent basis. HMT launched the campaign with plenty of notice to find the right candidate to take on this critical public role, and to allow for a handover period before the incumbent retires. This approach will ensure a smooth transition in leadership at the DMO, which is now underway. The Treasury also places great weight on knowledge management within the department, ensuring policy decisions and key stakeholder engagements are adequately captured and shared over time. The department invests in its people to develop the skills and capabilities required to undertake varied and complex work and to respond flexibly to the evolving needs of the department. Throughout 2023-24 a range of corporate learning and development initiatives were delivered, including for example: People Management workshops and a Policy Leadership Programme, as well as offering a range of external qualifications in policy, economics, tax, and analytics. In recognition of some of the key challenges around retention and skills shortage, HM Treasury has recently undertaken a programme of work to de-merge one of its grades, which provides a pay uplift to approximately a third of its largest cohort of staff. This brings the department’s grading structure in line with the rest of the Civil Service, which will help to respond to issues it has experienced attracting and retaining staff at this grade. billion programme. As set out in evidence to the Committee, an additional 12 months of termination assistance services was agreed with Atos to March 2025, the cost of which is encompassed in the total cost of the programme. The contract enables NS&I to utilise this provision for a further 12 months beyond March 2025 if needed. Commercial terms, which would then determine the subsequent costs, would be agreed at point of extension with Atos. Should Atos not agree to extend, NS&I would seek to ensure an orderly transition to a new supplier in a manner that does not disrupt services to customers. There are a range of approaches NS&I could take, all of which at this time are commercially sensitive. 4.6 NS&I’s programme governance has been audited and assured by the Government Internal Audit Agency (GIAA) over the last year. A representative from GIAA’s Project and Programme Management Assurance practice and a representative of the Infrastructure and Projects Authority are standing attendees at the Transformation Programme Board. NS&I is also in the process of adding a member of the executive team of another government department to the programme board to provide additional insights and experience from another public body. It is also working with the Cabinet Office’s complex transaction team to provide additional expert support.