Accounting officers should play a greater role in the approval and assurance process for major projects, MPs have said, in a new report on government’s accountability to parliament.
The latest report by the Public Accounts Committee says there are “too many examples” of accounting officers letting initiatives such as public funding for the beleaguered Kids Company charity and the Home Office’s e-borders programme to continue “unchallenged, despite strong evidence of poor value for money”.
As the most senior official in a department or executive agency accounting officers have a personal responsibility to assure parliament of value for money when spending public money. In the case of a department, the permanent secretary is the accounting officer.
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They can request a ministerial direction if they have serious concerns about a particular policy or initiative. These are published, but are “not being used effectively as an accountability control”, the report says.
During PAC’s inquiry, the MPs heard from the then-Treasury perm sec Nick MacPherson that accounting officers may also use ‘AO assessments’ to challenge ministers.
These “examine whether policies are feasible and value for money, as well as whether the spending involved is lawful and proper”, the report says, but the committee is concerned that these assessments “are not commonly used and never made public”.
The committee recommends that these assessments “should be made available to parliament to strengthen transparency and accountability”.
MPs also called for AOs to play a greater role in major project oversight, arguing that recent changes which make senior responsible owners (SROs) accountable to parliament should not detract from AO responsibilities.
“We are particularly concerned that accountability arrangements have lagged behind changes in the way government conducts its business" - Public Accounts Committee chair Meg Hillier
The report says: “While SROs of major projects are directly accountable to parliament for project implementation, AOs retain ultimate responsibility for projects overall.”
It also notes that an improved system of approval and assurance for projects, through the Infrastructure and Major Projects Authority (IPA), “does not replace the basic discipline required of AOs to satisfy themselves that projects and other initiatives are a good use of taxpayers’ money and are on track”.
The committee therefore recommends that AOs should provide “greater positive assurance over major projects and initiatives during their implementation, for example through requiring explicit AO sign-off at key stages of implementation”.
Outsourcing accountability fears
MPs were also concerned that government is not creating clear accountability arrangements to oversee devolved or outsourced public services.
“Accountability to parliament for the use of public funds has been weakened by the failure of the government’s accountability arrangements to keep pace with increasingly complex ways of delivering policies and services,” the report says.
For example, the report notes that when the committee investigated City Deals, the communities permanent secretary “could not explain clearly and simply whether responsibility for the outcomes of individual City Deal programmes rested with local or central government”.
Some permanent secretaries publish accountability statements which set out how responsibilities are distributed within the system they oversee.
The report calls for all departments to publish accountability system statements with their next annual report and accounts — currently only seven of the 17 main departments have published an accountability statement.
“Each statement should cover all of the accountability relationships and processes within that department, making clear who is accountable for what at all levels of the system from the AO down," the committee says.
MPs also highlight the need for greater, and better, cost and performance data on public services. Accountability statements should specify the financial and performance data which AOs need to oversee systems of delivery, the report says.
Launching the report, PAC chair Meg Hillier (pictured) said taxpayers were “entitled to know how their money is spent and whether they are getting good value”.
“We are particularly concerned that accountability arrangements have lagged behind changes in the way government conducts its business,” she added.
“Data is persistently inadequate and there is an urgent need for greater clarity on lines of responsibility.
“We also believe that notwithstanding their responsibility to government ministers, departmental permanent secretaries and other accounting officers could and should be more robust in standing up for taxpayers’ interests.
“The recommendations in our report represent an important step towards addressing these concerns. We urge the government to demonstrate a commitment to transparency and value for money by acting on them.”