All posts by Gareth Davies
Posted on February 1, 2021 by Gareth Davies
Since the COVID-19 pandemic began, the NAO’s role has been to provide Parliament and the public with evidence-based reports on how public money has been used to tackle the crisis. So far we have published 12 reports on different elements of the pandemic response, including for example the test and trace programme; the procurement of PPE and ventilators; the furlough scheme; and loans to businesses. All of our COVID-19 work is on our website, along with details of the pipeline of COVID-19 work in progress, due for publication in 2021.
Our work so far has highlighted the challenge faced by government of responding effectively to an unprecedented public health and economic emergency whilst maintaining control over how (and how well) public money is spent. Our reports show how the trade-off between speed, effectiveness, cost and control has been managed in the different elements of the COVID-19 response and provide important learning for the rest of this pandemic and any future public health emergencies. The Public Accounts Committee has held public sessions on each of the topics covered by our COVID-19 reports, taking evidence from the officials responsible and issuing its own reports.
To support transparency and the effective scrutiny of government spending, we are continuing to update our COVID-19 cost tracker, with the latest update made on 29 January 2021. As well as providing the latest estimate of the cost of every significant government commitment as part of its pandemic response, the tracker shows spend to date where that is available. It also allows the data to be downloaded and analysed by type of support, department responsible and date of commitment.
Although the pandemic has rightly required significant audit attention, our work programme has also covered other important areas of public spending. In November, we reported on the state of preparations at the UK border for the end of the EU Exit transition period on 31 December 2020. We will follow up how the new border arrangements are working in practice later this year.
In December, our first report on the government’s progress in meeting its commitment to a net zero carbon economy by 2050 looked at the governance and management arrangements being put in place to deliver this big shift in how we generate power, heat our homes, use our land and travel. We are following up with audits of specific elements of the net zero strategy, such as government’s role in encouraging the transition to ultra-low emission cars.
COVID-19 has also impacted the NAO’s other major area of work, the audit of government department and arm’s-length body accounts. Finance and audit teams alike adjusted well to fully remote accounts preparation and audit for the 2019-20 annual reports and accounts. Overall, audits took longer to complete, partly due to the logistical impact of lockdown but also because of the impact of the pandemic on 31 March 2020 asset and liability valuations and on the going concern status of organisations facing significant loss of income. I had to include ‘emphasis of matter’ paragraphs in 84 of my audit reports, drawing attention to significant uncertainty in these areas.
Looking ahead, government’s 2020-21 accounts present significant accounting and audit challenges. For the departments in the front line of the pandemic response, they must account for tens of billions of unplanned spending during the year, often in risky control environments. Our audits will assess the robustness of the estimates and judgements made by departments in accounting for this spending.
As well as responding to the pandemic in the last year, we have also been making progress on the new strategic priorities we set for the NAO for the five years 2020 to 2025. This is already visible in our new series of lessons learned reports, bringing together good practice, warning signs and tips for success on important areas of public spending. The first in this series, Lessons learned from major programmes, was published in November. As part of our focus on audit quality, we’ve also embarked on an overhaul of our audit methodology and the procurement of a new audit software platform, which will incorporate powerful new data analytics.
All of this work has only been possible thanks to the commitment and professionalism of my colleagues who, like so many others, have continued to deliver our work programmes whilst managing the impact of lockdowns, home schooling and other pressures. We’re conscious that others, notably healthcare and other front line workers, are handling much greater challenges. That thought focuses us on helping government to extract as much learning as possible from this experience so that the country is prepared for any future emergency of this kind.
Posted on July 23, 2020 by Gareth Davies
I last posted to this blog in late April as the country was in the teeth of the COVID-19 pandemic, explaining how we were maintaining our operations and adjusting our work programme in the light of the government response to the virus.
Now, in late July, most of the UK is gradually emerging from lockdown following a devastating period for many families, an enormous effort by health and care workers and many others in crucial roles and an unprecedented set of government spending interventions to mitigate some of the economic effects of the crisis.
Like every organisation, the NAO has had to adapt to the new working environment, but throughout this period we have continued to deliver our core programmes of work: the audit of the 2019/20 accounts of more than 400 government departments and public bodies and a substantial programme of value for money reviews and investigations into important spending programmes.
A substantial proportion of our effort has been redirected to the audit of government’s response to COVID-19. We have published reports on the scale and nature of the public spending commitments and on readying the NHS and social care for the pandemic. We have a further seven studies already underway to begin publishing in the Autumn, and more in the planning phases. We’ve developed our COVID-19 hub for people to follow our work on this.
Looking back, at the point that Parliament rose for its summer recess, we had completed the audits of 171 departments and public bodies, including some of our larger audits such as the Department for Work and Pensions and the Home Office. Our work on the remainder continues over the summer and those audited accounts will be laid in Parliament from its resumption in September. I’m grateful to both my audit teams and the finance teams of our audited bodies for their determined approach to obtaining the audit evidence we need when working remotely, and for addressing the financial reporting challenges posed by the pandemic including volatile valuations and going concern risks.
We have continued to complete and publish value for money reports on vital areas of public interest, including universal credit, the MoD’s aircraft carrier programme, asylum accommodation and support and digital transformation in the NHS. Our factual investigations have included reports on progress in removing dangerous cladding from residential blocks, the selection of towns to bid for money from the £3.6bn Towns Fund and government’s response to the collapse of Thomas Cook. This work has supported sessions of the Public Accounts Committee which has been meeting virtually throughout.
Our Overview of the UK government’s response to the COVID-19 pandemic brought together in one place all of the main activities, costs and funding undertaken by government in the initial months and laid the foundation for us to build our programme of more in depth studies. We also looked further into the action the Department of Health & Social Care and other bodies undertook during March and April to ready the NHS and adult social care for a rapid increase in the number of infected people.
Looking forward, we have a broad and varied programme of work on COVID-19 to come once Parliament reconvenes in the Autumn. We have several reports planned on the important issue of government procurement. They include an audit of government buying in the pandemic, as well as specific studies into the efforts to increase the number of ventilators available to the NHS and on supplying the NHS and adult social care sector with PPE.
We will also examine measures aimed at protecting businesses and individuals from the economic impact of the coronavirus pandemic. This includes reports into the Bounce Back Loan Scheme and the Coronavirus Job Retention Scheme. Other studies will look into the government’s work to protect and support the vulnerable during lockdown and the Free School Meals voucher scheme. Our website has full details of our work in progress related to COVID-19, and we will continue to add further reviews to this list as they are approved.
In all of this work, we will examine how government adapted its approach to reflect the need for urgency in the first phase of the pandemic, and how it is managing the attendant risks to value for money and probity in public spending. Our reports will be published, laid in Parliament and be available to the Public Accounts Committee for its programme of inquiries in the normal way.
We will continue to respond to the risks to public money posed by this unprecedented time for the country to provide the assurance required by Parliament and the public and to draw out the lessons for future phases of this pandemic and future emergencies.
Posted on April 22, 2020 by Gareth Davies
With Parliament returning yesterday, I wanted to take the opportunity to reflect on the last few extraordinary weeks and set out what it means for the National Audit Office and its work.
Firstly though, on behalf of the whole NAO, I would like to pay tribute to everyone who is working so hard to see our country through this crisis. That of course includes our courageous health and social care workers and others on the front line of the response, but also all the public servants behind the scenes at the national and local level keeping our country going. As the organisation responsible for scrutinising so many of these public bodies, we have a privileged insight into how vital they are to everyone’s lives every day – and even more so at a time like this.
To all of the public servants rising to this unprecedented challenge, thank you.
Like many other organisations, the NAO has been home-based for a month now. In infrastructure terms, the NAO was well-prepared for homeworking as our systems are designed to support secure remote auditing. We are working hard to support our staff as they grapple with the practical and wellbeing challenges of the current situation. We are of course not the only ones. And as an organisation that supports Parliament, that has been especially brought home to us as we see the House of Commons resume business in a manner we have never seen before.
As Parliament adapts, so too are we in order to ensure that we can help it to hold government to account. The response to the global pandemic will have implications for many years for public spending and public service delivery. It is too early to tell exactly what the impact will be, but it will be profound.
What is already clear is that MPs, and the public that they represent, will expect us to carry out a substantial programme of work on the COVID-19 response so we can learn for the future. This will include looking at government spending on the direct health response as well as the wider emergency response. We will also look at the spending on the measures to protect businesses and individuals from the economic impact.
It will take us time to develop and produce our work, more importantly it will take time for the public sector to be in a place where it can learn from our findings. Our challenge is to try and provide the appropriate level of evidence-based reporting to support accountability and provide insight at the most suitable time. We must not get in the way of public servants working hard to save lives, but we must also ensure that our reporting is sufficiently prompt to support proper accountability for public money.
We have decided to begin with a factual summary of the significant government spending commitments and programmes relating to COVID-19 which we hope to publish next month. We will use this to identify a risk-based series of evaluative studies where we think there is most to learn.
What is also important to Parliament is that we do not lose sight of the wider picture. There are many other challenges facing the UK including EU Exit; progress in meeting government’s net zero carbon emissions target; major infrastructure projects and the financial sustainability of key public services. Our work programme will have to balance this with the demands of COVID-19. That is why we will be continuing to publish reports already in train. We are also working hard to meet our key statutory duty to audit the accounts of over 450 public bodies.
My colleagues and I are committed to providing Parliament and the public with the evidence they need to understand how public money has been used in tackling this crisis. We will also help ensure that the appropriate lessons are learned for the future.