Conclusions and recommendations
1. The centre of government comprises the Cabinet
Office, HM Treasury and Number 10. Together, these central bodies
are responsible for coordinating and overseeing the work of government
as a whole, to help government achieve its aims and priorities.
The centre also works with departments to improve the efficiency
and effectiveness of their operations, for example by providing
direction on making cost savings, standards for financial management
and reporting, and assurance over the delivery of major projects.
2. The current lack of clarity about the precise
role and responsibilities of the centre jeopardises government's
ability to deliver value for money in key public spending areas.
Correspondence we received indicates that agreement between the
civil service and ministers on the role of the centre does not
yet exist. The civil service remains committed to departmental
autonomy whilst ministers want an effective, smart and challenging
centre. This lack of agreement means that there is no clear definition
of the role of the centre and the accountabilities for implementing
cross-government initiatives are not always clear. We accept there
needs to be a balance between central control and departmental
autonomy. Nevertheless, too often we see a failure of the centre
to intervene appropriately and quickly to avoid poor value for
money for the taxpayer. Universal Credit is a case in point. The
Cabinet Office, the Treasury and Number 10 need to focus more
effectively on their central role and on working together as an
integrated centre of government. We welcome the permanent secretaries'
commitment to provide us with a statement of the role of the centre.
Recommendation: The permanent secretaries'
statement on the centre should set out:
- the role of the centre
as one integrated capability;
- the respective roles and responsibilities
of the Cabinet Office, the Treasury and Number 10;
- how these three bodies work together; and
- how the centre works with other central
government departments.
As a starting point, they should use the suggested
responsibilities of the centre set out in the Comptroller and
Auditor General's report.[1]
3. The centre is not working effectively with
departments to maintain a focus on timely implementation of cross-government
priorities. Departments are making unacceptably slow progress
on some central efficiency initiatives such as shared services,
resulting in taxpayers' money being wasted. The centre needs to
challenge departments more actively on their implementation of
cross-government initiatives, like debt collection, including
by holding permanent secretaries more strongly to account for
departmental performance. While Accounting Officers do have an
obligation to deliver value for money across government, as well
as within their own departments, they do not then have meaningful
incentives to work in the wider interests of government as a whole.
Recommendation: The centre should set out
how it will improve performance management and incentives, to
ensure that departments deliver cross-government priorities successfully
and within the intended timescales.
4. The centre does not intervene early enough
to prevent major departmental projects and programmes from failing.
The permanent secretaries told us that the centre does intervene
in individual departments when departmental programmes or projects
are at risk of failure or Accounting Officers have failed on the
job; although this is not usually done in public and they acknowledged
that their interventions tend to occur when there is a crisis.
Our examinations of failings with major projects such as Universal
Credit indicate the centre is not intervening effectively before
serious problems arise. Central departments have various sources
of intelligence about strategic risks, such as information from
Treasury spending teams, Major Projects Authority assurance reviews,
and Implementation Unit stocktakes, and should ensure that this
information is used to anticipate significant risks and intervene
appropriately. The centre also needs to ensure lessons are learned
from past experience of project failures or poor performance,
and that this process is formalised. For example, in letting recent
renewables contracts, government appeared to have learned little
from its experience of PFI contracts in terms of ensuring some
clawback of any excessive returns.
Recommendation: The centre should:
· draw
together its strands of intelligence to form an integrated, single
view of strategic risks. Where such risks are identified, the
centre needs to robustly challenge departments, intervening earlier
and more effectively to prevent project failure; and
· explain
how it will ensure that lessons from past experience are properly
considered when planning new projects.
5. Key specialist skills are in short supply
and are not distributed effectively between departments and the
centre. The effectiveness of government is undermined by shortages
in specialist skills and capability, for example there are recognised
gaps in commercial, contracting and financial management expertise.
Some progress is being made, such as the Major Projects Leadership
Academy's training of senior project managers, more coordinated
central leadership of corporate functions such as procurement
and civil service HR, and the Civil Service Reform Plan's focus
on developing project management, digital and commercial skills.
However, much of the talk about improving skills is still of future
actions rather than what is being delivered now. Implementation
of the Treasury's financial management review is a clear example
of where the centre must lead the push to build key skills and
capability across government. We look forward to seeing the Treasury's
promised action plan for implementing the financial management
review.
Recommendation: The centre should:
· clarify
what is the right balance between the skills and expertise that
should reside in departments, and specialist capability that should
be located centrally and deployed flexibly across departments
when required (for example, when a major contract is being negotiated
by a smaller department); and
· in
its financial management review implementation plan, set out detail
of the concrete actions the Treasury is taking to strengthen the
finance function across government, through providing central
expertise and helping departments improve their financial capability.
1 C&AG's Report, The centre of government,
Session 2014-15, HC 171, 19 June 2014, para 11 Back
| 
