Source · Select Committees · Public Accounts Committee
77th Report - Accountability in small government bodies
Public Accounts Committee
HC 887
Published 24 April 2026
Recommendations
4
Sponsor departments and the centre of government can do more to help small bodies apply...
Recommendation
Sponsor departments and the centre of government can do more to help small bodies apply requirements effectively and proportionately. Small bodies would benefit from greater support to help them comply with requirements. In large organisations, staff can specialise in specific …
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HM Treasury
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5
Relying on shared corporate services such as HR, estates and finance is not always the...
Recommendation
Relying on shared corporate services such as HR, estates and finance is not always the best option for small bodies. Shared corporate services, such as estates and IT, have the potential to deliver efficiencies and free up resources in small …
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HM Treasury
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Conclusions (20)
2
Conclusion
A tailored financial reporting regime for small, low-risk bodies would allow for more meaningful reports and free up time for frontline delivery. Financial reporting requirements are disproportionately 2 onerous for smaller, low-risk bodies. The costs of producing and auditing lengthy, overly detailed annual reports and accounts often outweigh the associated …
3
Conclusion
Government’s requirements for delivering specialist functions such as digital and procurement effectively are often ill-suited to small bodies. Government’s requirements for delivering specialist functions (functional standards) and their associated guidance can be useful to small bodies, but they are often designed with larger organisations in mind. For example, the guidance …
1
Conclusion
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Cabinet Office and HM Treasury on accountability in small government bodies.1 We also took evidence from the Government’s Actuary Department, the Office of the Children’s Commissioner and the Ministry of Justice.
6
Conclusion
Since launching the ongoing public bodies review, government’s efforts have focused on consolidating larger bodies. However, there are also significant benefits in consolidating smaller bodies where appropriate, beyond the potential to achieve efficiency savings and economies of scale. The Government Actuary’s Department and the Office of the Children’s Commissioner have …
7
Conclusion
While successive governments have consolidated some public bodies, they have also set up new bodies, including small ones. When our predecessor Public Accounts Committee reported on arm’s-length bodies in 2021, it found that, despite the guidance that creating a new arm’s-length body should be a “last resort”, government often did …
8
Conclusion
The Ministry of Justice and the Office of the Children’s Commissioner told us that, there can be a sound rationale for having separate small bodies, such as when legislation requires an office holder to be independent.9 But the opposite is also true. All Government Departments should think carefully about the …
9
Conclusion
There is no single, commonly agreed definition of a small, low-risk central government body. The NAO report classified central government or parliamentary bodies that spent up to £30 million in 2022–23 or had up to 50 full-time equivalent (FTE) employees on 31 March 2023 as small.11 HM Treasury has not …
10
Conclusion
Small central government bodies are largely subject to the same financial reporting and external audit requirements as large bodies. This is unlike small companies and charities in the UK, and small central government bodies in countries such as New Zealand and Portugal, which benefit from exemptions and simplified requirements.15 The …
11
Conclusion
The Government’s Actuary’s Department and the Office of the Children’s Commissioner told us that the preparation and audit of their ARAs can be timeconsuming.17 This limits their ability to pursue other valuable work and brings limited benefits.18 The Electoral Commission told us in a written submission that compliance with requirements …
12
Conclusion
HM Treasury told us that it is considering opportunities for simplifying disclosures in annual report and accounts, but that it would want to consider the risks and benefits of a streamlined reporting regime for small central government bodies.21 HM Treasury also told us that savings arising from a small body …
13
Conclusion
Some aspects of the functional standards, their supporting guidance and self-assessments are better suited to large organisations which have experts in a range of specialist areas than to small organisations which operate in a more agile way.26 For instance, the Government Actuary’s Department told us that the security standard, which …
14
Conclusion
The functional standards include advisory elements. Organisations can choose to either comply with them or explain why they have not complied with them.29 The Ministry of Justice told us that this approach is probably more weighted towards “comply” than “explain”.30 It noted that more openness on when certain types of …
15
Conclusion
The Cabinet Office told us that, in the light of feedback from government bodies, it has asked the government functions to provide more guidance on how to apply the standards proportionately.33 The functions are currently revising standards and guidance in the light of Project Reset, which plans to transfer more …
16
Conclusion
Some of the functions’ self-assessments and guidance require specialist expertise that small bodies often lack. For instance, the criteria for a ‘good’ level of compliance with the HR standard include escalation to complex casework specialists.35 Small bodies often rely on their sponsor department to access this expertise.36 The Ministry of …
17
Conclusion
Small bodies rely on support from the Cabinet Office, HM Treasury, and other central government bodies to comply with requirements. It can be hard for small bodies to access this support.38 For instance, the Government Property Agency provides data that the small bodies leasing its office space use to report …
18
Conclusion
Small bodies are not always aware of the support and resources provided by sponsor departments and the centre of government. The Director of Finance and Operations of the Government Actuary’s Department told us that she is only aware of many forums and groups because she has worked in the civil …
19
Conclusion
Small government bodies often rely on shared corporate services, which are provided by their sponsor department or other organisations. For example, HM Treasury provides IT services and the Government Property Agency provides estates services to the Government Actuary’s Department.42 The Office of the Children’s Commissioner uses the Department for Education’s …
20
Conclusion
Under the government’s shared services strategy, departments are moving HR, payroll and other back-office functions to shared service centres. Arm’s-length bodies are expected to join their sponsor department’s shared service centres.45
21
Conclusion
The Cabinet Office told us that greater adoption of shared services across government, including by small bodies, can deliver significant savings.46 The Cabinet Office, HM Treasury and Ministry of Justice stated that, for small bodies, relying on shared corporate services is more efficient than maintaining specialist capabilities in-house. Shared services …
22
Conclusion
Small bodies told us that shared corporate services do not always suit them. The Office of the Children’s Commissioner told us that delivering back-office functions, such as payroll, in-house allows it to operate more flexibly, at very low cost, and with fewer processes than by using shared services.49 A submission …