Finance

The Treasury must take ownership of the new system of accountability that will develop as a result of public service reforms, the Public Accounts Committee has said.

Departmental expenditure limits (DEL) will need to fall by 3.8 per cent per year in the first two years of the next Parliament – even more than the current annual cuts of 2.3 per cent – unless there are deeper cuts to annual managed expenditure (AME) budgets, chancellor George Osborne said in his Budget last week.

Shadow chancellor Ed Balls said at Queen Mary University last week that granting the Bank of England independence in 1997 “increased the power of the Treasury, because it allowed the Treasury to say: ‘Well, I see you want to make that decision, prime minister, and I can see why you’d want to do that, but I’m not sure the independent Bank of England will wear it.”

A poll by CSW, carried out in partnership with analytics company SAS, has found that 74 per cent of senior civil servants and 73 per cent of all civil servants believe that departments and agencies would be better incentivised to tackle fraud and error if they were allowed to keep some of the savings.

Departmental select committee chairs have provided mixed reviews of the departments they scrutinise for a Civil Service World Special Report, which has found that 40 per cent of them are dissatisfied with departments’ responses to their reports.

Public Accounts Committee (PAC) chair Margaret Hodge yesterday welcomed the publication of the Whole of Government Accounts (WGA), calling them a “major step forward in improving transparency and accountability.”

Finance skills should be central to the civil service reforms now being developed by head of the civil service Sir Bob Kerslake, the head of the government finance profession has said. Speaking in a CSW interview, Department of Health finance chief Richard Douglas said: “I’m hoping and expecting that Bob Kerslake will take [finance skills] forward as a key plank of civil service reform.”

National Audit Office chief Amyas Morse has raised concerns about the quality of data departments will receive under new systems designed to ensure accountability in devolved service provision.

All departments, agencies and non-departmental bodies will have to commission private companies to conduct ‘spend-recovery’ accounts in search of fraudulent or mistaken payments, Cabinet Office minister Francis Maude announced on Monday at the launch of the government’s Fraud and Error Strategy.

Treasury chief secretary Danny Alexander has ordered a review into the salary arrangements for “all senior consultancy appointments” after the revelation Ed Lester, chief executive at the Student Loans Company (SLC), was paid through a consultancy firm in order to reduce tax on his salary package.