Sceptical Business Case Scrutiny

These recommendations can be accepted in full.

It is important to note that public expenditure in NI is governed by the UK Budgeting rules set by HM Treasury. These rules mean that there is limited flexibility available to the Executive in some areas.

Some elements are addressed in existing guidance, including the stipulation that resources should be utilised in line with regularity, propriety and value for money considerations. Funding for some specific issues may be provided by HMT on a time-limited basis. In addition the HMT public expenditure rules mean that only very limited funding can be carried forward between financial years. However, this does not override the value for money requirement. Departments have the opportunity to revise annual budget allocations through the in-year process.

Value for Money is already a requirement in the NICS core competency framework.

These recommendations have been addressed in work to date through:
• Departments’ response to the lessons learned following PWC’s Heat Reports;
• the major and fundamental Review of the Expenditure Approval and Business Case Processes, incorporating many of the recommended elements;
• the delivery of an online package of Public Expenditure training for both budget holders and general-service grades;
• the initiation of a review of MPMNI;
• re-establishment of DoF-led Finance Director meetings
• the issue of a formal protocol for engagement with HMT.

Further work is required to:
• give consideration to the role of Casework Committees to ensure that they are rigorous and deliver the necessary scrutiny and independence, in line with the existing role of GatewayTM reviews;
• Implementation of Five Case Model guidance
• Engagement with the Treasury around ‘false economies’
• Consideration by DoF of the introduction of an Approval Panel for the highest cost and most complex proposals
• As part of the Annual Assurance Statement, departments will be asked to confirm:
- that the appropriate approvals process has been followed for all expenditure;
- that Ministers have been made aware of conditions that apply to all expenditure approvals as standard and specifically have been made aware of any non-standard conditions that had been applied to expenditure; and
- that they are content all expenditure activity has adhered to the conditions of its approval.
• Supply shall:
- include a line in non-standard approval letters to say that Ministers should be made aware of the additional conditions; and
- issue a Finance Directors letter to advise this change is coming in and that it would be for departments to determine the most suitable method for advising their Minister of such conditions.
• Progress and finalise the review of MPMNI
• deliver the strategy currently under development for the NICS finance profession;
• Gauge the demand for a further classroom-based training course. As part of that process DoF will engage with Finance Directors on departmental requirements. Should there be demand for such a course DoF will develop in conjunction with CAL.;
• keep the information sharing and knowledge transfer protocols under review, engaging with HMT and departments on their effectiveness and revising where necessary.
• assess position with both HMT and departments and review any breaches for lessons learned as part of its first review.

No statement on delivery from Department of Finance has been found in the sources searched. This is separate from the response above.

Implemented.

In respect of previous actions undertaken which resulted in an NIAO assessment of Implemented by 2022, DoF has provided the following confirmations in 2024:

to date, evaluative work has taken the form of an interim evaluation (after 18 months) of the rollout of the Five Case Model produced in November 2022 – this provided an assessment against the 16 recommendations which had resulted from the 2019 review. In DoF’s view, the review outcomes were largely positive, both in relation to the use of the Five Case Model and the quality of Business Cases drafted using the ‘new’ guidance. We understand that a full evaluation (after 36 months) is to be undertaken by the end of 2024; and

issue of a Best Practice Guide by DoF in October 2020 took place in response to a recommendation arising from the November 2022 interim Five Case Model evaluation. DoF has told us that this is regularly reviewed and updated as required, and most recently in August 2021 (including an updated list of Frequently Asked Questions to aid understanding of the business case process under the current guidance).