Posted on December 21, 2016 by Antonia Gracie
Helping Mozambique address its huge post-war challenges … the launch of a new book on the NAO’s 900 year history … a framework to help the UK government oversee the £734 billion of taxpayers’ money spent each year. The common thread is improved Parliamentary oversight and accountability. This aim is at the heart of the NAO’s role and therefore of the new book by former Assistant Auditor General, David Dewar; it was the subject of my presentation at the Houses of Parliament to a Mozambican delegation; and it has been a key theme of my work in our cross-government team this year.
It was sobering to talk to a delegation of seven senior Parliamentary officials from Mozambique about Parliamentary oversight and accountability. Their country faces basic constitutional problems, immense poverty (more than half of Mozambique’s 24 million people still live below the poverty line and life expectancy is just 50 years for men and 52 years for women), and corruption has become a major concern. On top of that, although their 16-year civil war ended in 1992, Mozambique is still suffering from the effects of the war and tensions remain between the ruling Frelimo party and the Opposition, the former rebel movement, Renamo.
The good news is that Mozambique discovered offshore gas fields in 2011 and President Nyusi, who came to power in January 2015, has pledged to use this resource to transform the country and its economy.
This is one of the reasons the Mozambique delegation was in the UK seeking to understand good practices and procedures for Parliamentary financial oversight. As discussed previously in our blog post Think global, act local, such discussions with international delegations are one of the ways that the NAO helps to support the national audit offices of other countries.
The UK actually has a 900 year history of some form of national audit, from the operations of the medieval Exchequer to the work of the NAO today, which is detailed in the book “A History of British National Audit”, published on 22 December (see more below). It’s not surprising, therefore, that we are further down the ‘maturity’ path as regards accountability to Parliament and taxpayers, than Mozambique. But there is never room for complacency when it comes to holding government to account for how it spends public money – some £734 billion of it every year in the UK (as detailed in our post on the Whole of Government Accounts).
Although we provide external audit scrutiny and help Parliament scrutinise government in a wide range of ways (see more later), it is government’s duty to build into its activities suitable arrangements to safeguard value for money and allow it to account to Parliament for its performance (e.g. through Annual Reports and Accounts, or at evidence sessions with Parliamentary Committees).
When a country’s system is in its infancy, as in Mozambique, it’s crucial to long-term success that accountability to Parliament is built in at the start. But here in the UK such accountability arrangements also need more attention, as we found in our cross-government report earlier this year. In recent years accountability has tended to be an afterthought when government introduces reforms and restructures – as we explained in our post Spending your money wisely.
Within a tough global economy, the government has taken on enormous challenges across a huge number of highly complex and extensive reforms, with the intention of improving the efficiency and the effectiveness of public service delivery. The result is fewer people, with reduced budgets, applying new delivery approaches, often through devolved or contracted out delivery (see also Making public sector markets work), all requiring scarce skills, which are often also new to the civil service, such as creating ‘exotic’ company and financial structures, or applying cutting-edge new technology. We recognise that this is challenging. But what this tumultuous year in politics tells us is that government must always remember to provide transparency and accountability – it must engage effectively and openly with Parliament and citizens about its objectives and challenges, its progress, and the impact on citizens, if it is not to erode public trust altogether.
Among our key cross-government publications this year, was a pair of reports focused on the government’s overall system for planning and managing public sector budgets and performance in the UK. These two reports (Spending Review 2015 and Government’s management of its performance: progress with single departmental plans) set out what we believe is needed to create a strong, coherent and enduring framework for ensuring the government can prioritise and achieve its objectives, while also providing accountability both internally and to Parliament and the public.
To achieve value for money and the government’s stated aim to be “the most transparent government ever” will require the same thorough management approach across government as for any well-managed organisation (see diagram). The essential “power” to drive the cycle, without which it simply cannot work, is good performance information, discussed in more detail in our post Measuring performance delivered through others.
To generate information on its own performance, government has tried a number of different approaches over many years, with incoming administrations tending to scrap the approach of the previous one. We were clear in our report on single departmental plans that, this time around, government needs to stick with this new approach. The approach must be embedded and improved as part of an overall management framework for the long term that helps government deliver, no matter who is in power or what their policy objectives are.
At a recent Public Accounts Committee evidence session, the Permanent Secretary at HM Treasury agreed, saying, “We are totally committed to it”. The Committee has now published its report, Managing Government Spending and Performance, welcoming single departmental plans as an “important step forward”, but challenging HM Treasury and Cabinet Office to develop them much further and “ensure that the work improves the information that Parliament and the public can access to understand government’s plans and to see how it is performing”.
Performance information for management and accountability is one of five principles for an effective management framework that we set out in our report Spending Review 2015, and which formed the basis for our specific recommendations.
Principles for an effective cross-government
planning, management and coordination systemEvidence to support decisions: Robust evidence is essential to understand whether the government is achieving value for money, to make fair comparisons to prioritise spending and to redesign services.An integrated view across organisational boundaries: The need to tackle complex issues to achieve outcomes requires a cross-departmental approach. Public sector organisations need to collaborate and to understand the links between services.A longer-term view: Decisions about spending and how services are provided can have long-term effects on public finances and outcomes. These effects need to be considered when assessing value for money.An understanding of the capability to deliver: Realism about what is required to transform services, ideally based on past experience, is essential. It is critical that departments and their partners have both the skills and capacity to make the changes.Timely information on performance to review success and hold organisations to account: A critical aspect of ensuring that projects are delivered successfully is maintaining an understanding of how they are performing.
Of course, the scale of the challenge to achieve an integrated management approach across the whole of government is greater than for most other organisations, and government’s plans are always shifting and changing. A grand plan cannot simply be imposed from the centre of Whitehall, once and for the whole of the Parliament. But the “golden thread” can be joined up through the whole system if there is transparency, and if individual departments and public bodies also focus on having an effective management system from the bottom up (see our post The glue to managing change).
All this adds up to the conclusion, for me, that accountability is not just an add-on, something we as taxpayers demand of government but which government could manage quite well without. Rather, accountability is as essential to the effective working of government business as any other aspect of public management.
Back at the Houses of Parliament, a Member of the Mozambique Parliament asked me how independent the NAO’s report recommendations are – whether we seek agreement from government before publishing our reports. I stressed, firstly, that we are very proud of our independence from government, and also that we consider this independence to be a real privilege, which we treat with great care. David Dewar and Professor Warwick Funnell’s new book shows just how hard-fought that independence has been through our history.
At the same time, one of our key aims is to drive public service improvement, so it’s important that our recommendations are taken up by government, which means that they need to be accepted as being right and useful. So we certainly discuss the recommendations with relevant organisations and we follow up the extent to which our recommendations, and those of the PAC, have been implemented and the improvement that has resulted.
A key issue I discussed with the Mozambican delegation is the role that the NAO plays in driving public service improvement. As auditors, we do not provide specific advice to organisations, as this would undermine the independence of our audit. But the organisations we audit particularly appreciate our perspective across the whole of government. So we do share valuable insight more generically, including by explaining what we would look for when undertaking an audit or value for money study – which is sometimes formalised and made available on our website’s self-assessment resources page. Wherever possible we also highlight good practice and lessons learnt, especially on the topics of particular importance to government, such as Transforming public services.
Like Mozambique’s state auditors, the NAO is on a continuing path in pursuit of accountability and improvement in public services. Over the last nine centuries the NAO and its predecessors have overcome many challenges to build the framework of audit and accountability we have today. But there remain challenges, and those wanting to know more about this history will be interested in the new book.
The NAO will, of course, continue to act both as a ‘critical friend’ in driving public service improvement, and as a champion of accountability. I welcome your comments and invite you to contact us about any of the many issues this involves.
‘A History of British National Audit: The Pursuit of Accountability’
By David Dewar, former Assistant Auditor General at the UK National Audit Office, and
Prof. Warwick Funnell, Professor of Accounting and Public Sector Accountability, University of Kent
Published by the Oxford University Press on 22 December
“A History of British National Audit” charts the pursuit of public accountability and the challenges overcome throughout the 900-year history of the NAO and its predecessors, from the medieval Exchequer to the work of the NAO today.
The book’s key themes include:
- securing operational and financial independence;
- extending the range and depth of examinations from an audit concerned mainly with matters of financial appropriation and regularity into major examinations of economy, efficiency and effectiveness; and
- relationships with Parliament, the UK Public Accounts Committee, the Treasury, spending departments, and other audited bodies.
The book reviews continuing developments in such areas as: rights of access and inspection; issues of probity and governance; and the importance of providing added value from audit work. It also considers the need for further change as the public sector continues to develop and wider-ranging arrangements and new accountabilities are introduced for the delivery of programmes and services.
David Dewar joined what was then the Exchequer and Audit Department (E&AD) in 1953, becoming a Director of Audit in 1977 and Deputy Secretary of the E&AD in 1981. He was Assistant Auditor General from 1984 to 1994.
About the author: Antonia Gracie is the NAO’s lead on the theme of accountability to Parliament, including government’s reporting of its performance. She has extensive experience of examining cross-government topics and the role of the strategic centre of government: Cabinet Office and HM Treasury.
The first photo, of Westminster Hall, the oldest remaining part of the Houses of Parliament, comes from the Explore Westminster website.
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