Value for Money Priority

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 Northern Ireland Executive 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, we sought assurances from DoF in relation to the operational arrangements which are currently in place and any further developments over the intervening period.

DoF has told us that the arrangements operate as previously described. As part of the business case submission process to DoF (that is, for projects where departments do not have delegated authority to approve), there is a requirement in place for departments to complete the DoF Supply pro forma – this indicates if specialist advice has been provided for each of the five cases or provide reasons as to why this has not taken place. We understand that, at the Interim Five Case Evaluation (November 2022), the use of these pro formas was tested and, in the majority of projects, the process in place had been used. It is intended that further testing will be carried out as part of the Final Evaluation.

Whilst we understand that there have been no further developments over the intervening period, DoF has also told us guidance dictates that value for money considerations take precedence over budgetary time constraints, and that the use of the Five Case Model requires the relevant specialists (financial; commercial; economic; policy and project management) to quality-assure the aspects of the business case relevant to them.