Source · Select Committees · Public Accounts Committee
Recommendation 22
22
Accepted
DMO faces significant leadership transition with long-serving CEO and other key members retiring.
Conclusion
The DMO is entering a period of transition, with the current Chief Executive Officer (CEO) due to retire at the end of June 2024 after being in post for over 20 years. We noted that an advert had been placed for the role, and asked the Treasury what the timeframe was for appointing a successor. The Treasury told us it had started the process of finding a successor with the aim of having them in post with enough time to allow for a “sensible transition”.42 We asked the DMO what the minimum term should be for the new CEO to ensure they understand the role and create confidence in the market. The DMO told us that the new CEO should ideally be in post for “long periods” because the learning curve for the role is steep. It explained that this was because the DMO is a specialist agency and it takes time to develop the “specialisms, skills and experience” that it relies on when making important judgements, such as understanding how government policy making works and developing key relationships.43 We asked the DMO what impact the CEO leaving will have on its small executive team, which has other key members nearing retirement. The DMO explained that the CEO leaving now will mean that the rest of the executive team will be around a little longer to help pass on “institutional memory” and “foster talent and growth” further down the organisation.44
Government Response Summary
The government states the recommendation is implemented, highlighting ongoing plans by NS&I to upskill, the DMO's developed resourcing strategy, and HM Treasury's recent pay uplift for staff to address retention and skills shortages.
Government Response
Accepted
HM Government
Accepted
2.1 The government agrees with the Committee’s recommendation. Recommendation implemented 2.2 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. 2.3 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. 2.4 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. 2.5 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. 2.6 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. 2.7 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.