Perm secs take flak for major-project spending transparency

MPs complain of late, poor-quality and “missing in action” accounting-officer assessments

By Jim Dunton

02 Dec 2022

The Treasury has been urged to crack down on departments who fail to produce detailed and timely assessments of the cost and feasibility of their major projects – often multi-billion-pound programmes, such as HS2 or the Emergency Services Mobile Communication Programme.

Members of parliament’s Public Accounts Committee said they are “disappointed” with the variable quality and use of accounting officer assessments, which are a requirement for many major projects.

MPs pointed to data from the National Audit Office suggesting that just 52 AO assessments had been produced in relation to the 227 major projects on the Government Major Projects Portfolio as of December last year.

They also bemoaned a lack of specifics about when AO assessments need to be published, allowing departments to effectively set their own timescales for the work, and called on the Treasury to enforce its own requirements for AO assessments.

PAC chair Dame Meg Hillier said AO assessments could be valuable guides for navigating challenges such as inflation or looming workforce issues, protecting taxpayers’ money in the process. But she said not all departments were making good use of them.

“National, critical skills shortages and record inflation now pose major risks to the budgets and feasibility of major government programmes,” she said.

“The public spending squeeze will make effective delivery of major projects within tight budgets even more crucial.

“Accounting officer assessments have a crucial role in revealing the thinking of the civil service, separate to political decision making.

“If and when major projects fail, at unacceptable costs to the taxpayer and potentially to society, government cannot say it did not have fair warning.”

MPs praised the Department for Transport for its AO assessment summaries, and the Ministry of Defence for its publications on the equipment plan.

But they said many AO assessments were “of poor quality and do not provide the detail needed to ensure transparency on the value and efficiency of public spending”.

The PAC report noted that while the Cabinet Office described itself as a big user of AO assessments at an evidence session in July, it was one of five departments that had failed to publish any summaries of its own AO assessments that time.

Among their recommendations, committee members said the Cabinet Office and Treasury should embed AO assessments into training for senior civil servants and set up forums to support their use in relation to Managing Public Money spending guidance.

MPs also urged the Treasury and the Infrastructure and Projects Authority to set out more clearly when current challenges faced by major programmes mean an AO assessment is required.

A Treasury spokesperson said chancellor Jeremy Hunt had been clear that demonstrating spending discipline was crucial for building credibility with the financial markets, ensuring economic stability, driving long-term growth, and sustainably funding public services.

“Cost control and value for money remain paramount for the Treasury,” they said. “To keep spending focused on the government’s priorities and help manage pressures from higher inflation, government departments will continue to identify efficiency savings in day-to-day budgets.

“To support departments to do this, the government is launching an efficiency and savings review. This will include reprioritising spending away from lower-value and low-priority programmes.”

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