The NAO says departments need better scrutiny

February 23, 2016 11:31 AM

With the delivery of major projects like HS2 underway, it is vital that value for money is considered at every level of government. However, today’s NAO report warns that all too often this isn’t the case.

The report highlights accounting officer’s (AO) poor incentives in ministerial departments which can lead to poor accountability and lack of scrutiny over value for money.

Specifically it suggests that the accounting officer’s role in ensuring value for money for taxpayers clashes with the competing need to serve the relevant minister. The changing nature of the role (which is often held by the departmental permanent secretary) has meant that AOs “have greater pressures to give weight to political drivers rather than public value”.

In their day-to-day role, there is greater incentive to satisfy ministers. The NAO suggests this may be because AOs lack confidence to challenge ministers where they have concerns especially as “standing up to ministers is seen as damaging to a civil servant’s career prospects”.

As such the AOs power to request a ministerial direction is not being used effectively as a method of accountability. As a consequence ministerial directions have not been requested on several occasions when they might (e.g. the single payment scheme for farmers or the National Programme for IT in the NHS). The NAO suggests that a robust, accountable system of decision making would be much more transparent than the current system.

This creates a system where accountability is seen as an “afterthought” and where accountability system statements (papers which show how AOs meet their responsibilities (e.g. this one for the DWP)) are created they are often not comprehensive and are “little more than a compliance exercise”.

The NAO makes several recommendations including an explicit sign-off by AOs at certain stages of the implementation of departmental projects and firmer AO ownership of the systems of accountability including the creation of the accountability system statement.

And importantly the Cabinet Office should identify and put in place specific measures to change the AO’s incentives in their dual duty to the taxpayer and to their minister.

These proposals seem reasonable and given the report’s findings it should be expected that the NAO’s advice be followed. It is vital that there are robust systems to ensure value of money is achieved for taxpayers.

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