Source · Select Committees · Public Accounts Committee
Recommendation 5
5
Acknowledged
Update Government Corporate Finance Profession strategy to ensure civil service skills for supplier failures.
Conclusion
The complex nature of the Special Administration Regime and sale process has required specialist skills and advice that are in limited supply within government. During the SAR and sale process for Bulb, government sought and appointed various advisers to support the Bulb process and also to advise on matters such as creditor disputes and structuring the sale deal to protect taxpayers’ money. By the end of January 2023, the Department had spent £53 million on advisers. Of this, the Department spent £2.8 million on financial and legal advice on the oversight of the SAR and sale of Bulb and £49.9 million on Teneo as of 31 January 2023. The need for commercial and corporate finance skills across government has increased. It is important that all departments have access to these skills and expertise in order to make appropriate judgements concerning complex activities that link the public and private sectors. The Department has indicated that in addition to the cost of external advisers, it also sought advice during the SAR process from UKGI, the government’s centre of expertise for corporate finance. While the Department was responsible for scrutinising, the fees charged by Teneo, the Department delegated some of the responsibilities for scrutinising these fees to professional advisers. Teneo estimates its total fee, including future work necessary until the conclusion of the SAR, will be in the region of £60 million, which will be paid by energy consumers. Recommendation 5: Within 12 months, HM Treasury, working with UKGI, should update the Government Corporate Finance Profession’s vision and strategy to ensure that departments have access to the right skills and experience from within the civil service to handle future supplier failures and similar transactions related to corporate finance.
Government Response Summary
The government agrees with the recommendation, outlining that the GCFP continuously evaluates its purpose and will include raising awareness of specialist skills in its forward plan, as well as continuing to monitor and update knowledge-sharing tools and arranging seminars.
Government Response
Acknowledged
HM Government
Acknowledged
The government agrees with the Committee’s recommendation. Finance Profession’s (‘GCFP’ or ‘the Profession’) forward plan to include raising awareness of the specialist skills that are available across HMG in a supplier failure scenario and similar situations, including drawing on the recent NAO Lessons Learned paper – ‘Monitoring and responding to companies in distress. UK Government Investments leads the Government Corporate Finance Profession and the UKGI’s Chief Executive is the Head of the Profession. The GCFP’s purpose is to promote skills development, knowledge sharing, networking, collaboration, and career development in corporate finance across Whitehall. The Profession focuses on technical skills development targeting civil and public servants undertaking corporate finance work across government, to help them develop an understanding of the wider external market and to provide an opportunity to support profile raising for corporate finance practitioners. The Profession continuously evaluates its purpose and vision, interacting with its membership base and utilising a series of surveys to understand the existing level of skills and knowledge of the membership across its published competencies, and its future needs. The Profession will continue to monitor and update its knowledge sharing tools for its members. It regularly arranges sharing excellence seminars for members, with contributions from both the private and public sector, drawing on recent case studies to promote best practice and share learnings.