Treasury's "top-down" handling of Spending Review blasted by the NAO

Watchdog says "less transactional" process is required and criticises Single Departmental Plans for failing to meet transparency goals

The National Audit Office, led by Sir Amyas Morse, said it was “not practical” to ask departments to plan before receiving funding settlements. Image: Photoshot

By Jim Dunton

21 Jul 2016

Public spending watchdog the National Audit Office has accused HM Treasury of failing to deliver a “coherent, enduring framework for planning and management” of the nation’s finances in last year's Spending Review.

In linked reports on the review and the success of Single Departmental Plans, both published today, the NAO said current processes and guidance fell short of what was required and that the effects could be seen in examples of poor value for money and a lack of long-term, joined-up thinking.

On November’s Spending Review, which allocated almost £2 trillion of departmental spending and a further £2 trillion of welfare and benefits payments, the watchdog said the Treasury had found it challenging to encourage departments to engage in joint working and the review process had “remained largely bilateral”. 

Spending Review 2015: The departmental settlements

Institute for Government think tank blasts "disappointing" new Single Departmental Plans​ 

It said that while progress with the review process had been made, the Treasury’s approach prevented the review from maximising value for money by tackling “difficult and entrenched issues” from public health to Whitehall interdependencies.

Among its recommendations for improvement were a call for the Treasury to offer more incentives for departments to work together and submit joint bids.

The NAO also said officials should develop a better understanding of where departments needed to plan for longer periods than Spending Reviews allowed, and how this could be supported. 

The separate report on Single Departmental Plans underscored sector sentiment that the documents had failed to live up to expectations on transparency and as roadmaps for accountability. 

"The current approach amounts to a collection of top-down, set-piece processes and guidance that fail to make the most of the understanding and expertise across government" – National Audit Office head Amyas Morse

The NAO said that while the SDPs were meant to be fully integrated with the Spending Review’s allocations, departments found that they could not manage two resource-intensive exercises simultaneously, and that it was “not practical” to set out their plans until they knew what they had received funding for. 

It said only ten out of 17 departments had linked any of their objectives to detailed spending plans. 

NAO head Sir Amyas Morse accepted that the 2015 Spending Review had represented progress on its 2010 predecessor, but said that progress had not gone far enough.

“Instead of an enduring framework that supports coherent strategic planning, effective business management and accountability, the current approach amounts to a collection of top-down, set-piece processes and guidance that fail to make the most of the understanding and expertise across government,” he said.

“Government must make a deeper cultural change if it is to make a lasting difference to its performance, and narrow the gap in accountability and transparency.”

He added that the need for change was “all the more important” as prime minister Theresa May’s new administration began work on its “redefined and urgent objectives”.

A Treasury spokesman said: “Our approach is well regarded internationally and enables departments to plan their business into the medium term.

“The government is committed to strengthening financial management and the Single Departmental Plans are helping focus resources where they are most needed, ensuring greater value for money for taxpayers.

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