Now is the time to learn lessons about maintaining standards in an emergency

The NAO's review to learn lessons from spending during an emergency was extensive. Here are the key takeaways for government
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The National Audit Office's latest report examines what more the government can do to stop fraud and maintain public faith that it can manage taxpayer money well in a crisis. The amount of fraud reported in the accounts we audited rose from £5.5bn in the two years before the pandemic to £21bn the two years after. Alongside this significant increase in fraud against the taxpayer, the UK has fallen from 11th to 20th (out of 180) in the Transparency International Corruption Perceptions Index. 

In part, this reflects the nature of the government’s response to the emergency, which inevitably placed public bodies under enormous pressure. They had to pay large amounts of money to support people and the economy, at speed, in new ways, and often to unfamiliar parties. This reduced the government’s ability to minimise fraud. Difficult decisions had to be made. And this involved trade-offs between the speed of response and ensuring that the right money got to the right people.  

Government needs to challenge itself and ask “what could we do better next time, without hindering our response?” 

Our review to learn lessons from spending during an emergency was extensive. We looked at over 60 audit reports, interviewed 18 departments and held cross-government workshops. The result was we identified seven key areas where government could set itself up better to manage money in an emergency. 

That’s not to say that government hasn’t been doing anything itself. We found government has already learned some lessons, but that it had more to do before it has a clear "playbook" on how to manage money well in a crisis.  

Our report makes recommendations for what preparations can be made against each of the lessons.  

Lesson 1: Be clear on governance and rules 

There is often not time in an emergency for the normal formal decision-making processes that are routine in the civil service. But civil servants need to understand and practice the rules so that they know what part of the process they can and cannot forego in a crisis. Government may also need to work with other organisations, and they’ll need clear instructions on what they are expected to do. 

Lesson 2: Prioritise, but communicate that you will return to things you can’t cover immediately 

In the rush of an emergency response there won’t always be time to do everything. Leaders will need to prioritise and make judgements. But when the dust settles, there will be follow-up work to pursue any incorrect payments. Being clear upfront that you’ll need to return to areas you intentionally deprioritised can send an important signal – that you’ll be back!  

Lesson 3: Embed the fraud risk management cycle 

When it comes to managing the risk of fraud, there is a commonly held approach that works. We call this the fraud risk-management cycle: identify your risks, look at what you can do about those risks, look at what happened and then make improvements. It sounds simple, but getting that process fully worked into emergency schemes can be tough. It’s important that there is some planning and a upfront budget to do this. 

Lesson 4: Create a flexible counter-fraud capability 

Not everyone can be expert in all things. Government has some skilled counter-fraud staff, but they can’t be everywhere at all times. Planning can be done now as to how to best use these experts in a crisis. Central coordination of how those experts are deployed would really help.  

Lesson 5. Plan for the data you will need 

Data is the lifeblood of organisations. Sharing and accessing that data when time is pushed and results are needed can take time. Some of that hard work can be done now by looking at what data might be needed to make and verify payments – and agreeing the best ways of sharing this. 

Lesson 6. Increase transparency 

The more you deviate from normal ways of doing things, the more you have to be transparent about what you are doing and why. A lack of transparency fuels public perceptions of wrongdoing, even if there isn’t anything suspicious going on. That is why a lot of what we do as auditors is shining a light on issues so that people and parliament can understand progress and get a grip of what is going on. In an emergency, increased transparency should not be seen as an onerous task, but as essential to building trust.  

Lesson 7. Plan how to buy in a seller’s market 

During a crisis, the government may need to buy goods and services in a seller's market. Its ability to make demands and set prices will be reduced and it may need to respond to many offers from businesses that it would not normally deal with. To help future emergencies, the government can develop a ‘how to guide’ so that those in this situation have clear guidance to follow.  

When it comes to the next emergency, we don’t know what it will entail or when it will strike. But what is a given, is that public trust will be dented if government can’t demonstrate it knows how to manage money well in a crisis. 

Preparation now is bound to pay dividends in the future. 

Joshua Reddaway is director of counter fraud and corruption and Lee Nicholson is senior audit manager at the NAO

Read: Lessons Learned: Tackling fraud and protecting propriety in government spending during an emergency





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