Kerslake backs call for new government efficiency watchdogs

Ex-civil service chief says reforms are needed to increase the public’s trust in government and over how public services are funded


By Richard Johnstone

28 Feb 2019

Photo: Parliament TV

The former head of the civil service Lord Kerslake had backed plans for the creation of two new government watchdogs to boost the effectiveness of government spending through increased use of evidence in policy development and better understanding of previous initiatives.

Writing a foreword to the Spending fairly, Spending well report that set out a series of public audit reforms when published by the Smith Institute earlier this month, Kerslake said that as government prepares for the Spending Review later this year, “a desire to increase the public’s trust in government and over how public services are funded, delivered and accounted for is now centre stage in both Whitehall and town halls”.

The report, which was written by John Tizard, a former senior executive at Capita and ex-Labour leader of Bedfordshire County Council, and David Walker, a former Audit Commission communications director, set out a series of reforms to make both central and local government spending more efficient, effective and equitable.


They stated that such an approach could only be achieved through new spending watchdogs that can examine the effectiveness of spending across local and central government. Currently, efficiency measures in NHS pay little regard to what is done in local government, while initiatives within Whitehall pay no heed to either, the authors concluded.

“We need a new, cross-cutting end-to-end approach, able to compare, contrast, learn and improve,” they said. “The paper argues for a system-wide review of how public money is planned, spent and monitored.”

It calls for the creation of two new agencies – an independent Office of the 3Es (effectiveness, efficiency and equity) to unify the pursuit of fair value for money across the public sector in England, with possible participation by the devolved administrations, and a new Public Interest Appraisal Unit, modelled on the Office for Budget Responsibility to provide greater evidence of efficacy before spending decisions are made in both Whitehall and local authorities. This will include providing evidence of how policy has been delivered in the past and modelling likely distributional effects and operational issues.

There is also a call for the National Audit Office’s remit to be reconfigured to take responsibility for the quality of audit across the public sector, including local government and the NHS, and the watchdog’s current value for money work and thematic reviews (a recent innovation) to transfer to the new Office of the 3Es.

In his foreword to the report, Kerslake, who was head of the civil service from 2011 to 2014, said the authors' call for reforms could help increase public confidence in public spending.

“They call for new agencies, including an independent Office of the 3Es (efficiency, effectiveness and equity), a large extension of the remit of the National Audit Office and a new Public Interest Appraisal Unit,” he said. “These reforms alone won’t restore Whitehall and Westminster’s credibility with the public or solve all the longstanding problems facing government, such as the lack of skills and capability, but they could make an important difference.”

Kerlsake said that “the Treasury is of course at the heart of the agenda for change”, and reiterated the call from his 2017 review of the finance ministry for it to “up its game and change its mindset on its public spending role”.

He added: “HMT needs to be more strategic and look end to end, from decisions about tax and programmes through to those everyday encounters the public have with employment and benefit services, schools, clinics, policing and care. As the authors rightly propose, new mechanisms are needed to pre-screen spending and then to follow it through, ensuring it delivers what ministers intended – and does so equitably.”

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