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It’s unusual, but true: the NAO has called for permanent secretaries to stand up to ministers. Our report on Accountability to Parliament for taxpayers’ money concludes top civil servants need to be confident in challenging policy proposals that don’t use public resources wisely. But accountability isn’t just for permanent secretaries. Our four ‘accountability essentials’ apply […]


Spending your money wisely

Posted on June 10, 2016 by

AccountabilityIt’s unusual, but true: the NAO has called for permanent secretaries to stand up to ministers. Our report on Accountability to Parliament for taxpayers’ money concludes top civil servants need to be confident in challenging policy proposals that don’t use public resources wisely. But accountability isn’t just for permanent secretaries. Our four ‘accountability essentials’ apply to all day-to-day spending of taxpayers’ (your) money.

Balancing AO responsibilitiesPermanent secretaries face a delicate balancing act. As civil servants, they serve their minister; as accounting officers (AOs) they have a personal responsibility to Parliament to safeguard taxpayers’ money. Usually, both ministers and Parliament want to know that public money is being spent well. However, our report concluded that too often AOs are not speaking up when they have concerns that a minister’s favoured policy approach is not good use of taxpayers’ money – and the PAC shared our concerns in its report, published in May.

What’s causing the problem?

Increasing ministerial involvement: The incentives for AOs to prioritise value for money are weak compared with the day-to-day job of satisfying ministers. Put bluntly, standing up to ministers is seen as damaging to a civil servant’s career prospects. Although the pressures aren’t new, ministers are increasingly involved in the detail of policy implementation, particularly decisions on the speed of delivery. Ministers have also sought a more active role in appointing top civil servants and have employed influential special advisers to act on their behalf. These developments are weakening the ability of AOs to perform their crucial role of protecting public money.

Few ways to highlight concerns: A robust, accountable system of decision-making needs much greater transparency and visible assurance than it has at present. There are two important ways AOs can highlight their concerns about taxpayers’ money.

1 Ministerial directions – the ‘nuclear option’: If an AO has serious concerns about the propriety, regularity, feasibility or value for money of policies, s/he can request a formal ministerial direction to proceed with a policy or course of action. But this power is rarely used (Kids Company is one example); and when it has been, it typically involves relatively small amounts of public money. By contrast, projects with large public investment and clear value for money concerns have generally not been the subject of directions. Examples include the FiReControl project for regional fire control centres (2004-2011), which had cost £635 million when it was cancelled; and the National Programme for IT in the NHS (2002-2011), which cost a total of £11.4 billion.

2 AO assessments: AOs can use these to set out and evaluate, in a systematic way, whether a policy would be feasible and deliver value for money, as well as whether the spending involved would be lawful and proper. However, the process is not well known and could be used much more to allow AOs to raise concerns – before having to ‘go nuclear’.

Complex accountabilitiesAccountability is running behind transformation: Greater local devolution and cross-cutting working means delivery responsibilities are often delegated, devolved or shared. There have been some moves for accountability arrangements to keep pace. For example, since 2014 senior responsible owners of major projects have been directly accountable to Parliament for project implementation; and changes to public sector accounting have made government finances more transparent. But accountability often seems to be an afterthought. Devolving powers and funding to the local level has often left oversight and accountability arrangements unclear, particularly for value for money. Cross-departmental working has left some gaps in accountability; care leavers and confiscation of criminal assets being two instances.

Some departments prepare accountability system statements to explain responsibilities for locally devolved funding in sectors such as local government, education, health and policing. The statements are a positive first step. However, only 7 of the 17 main departments have prepared them. They typically don’t cover all accountability relationships within a department (such as arm’s length bodies, outsourced activities and cross-cutting initiatives). They could also do more to describe how AOs oversee entire systems of delivery to secure overall value for money. Furthermore, few departments are using their statements to manage their accountabilities, and Parliament has found it difficult to use the system statements to hold AOs to account.

I am accountableSo what needs to change?

  • Permanent secretaries need to take firmer ownership of the AO role and the systems of accountability under their control, including plugging any accountability gaps and resolving confused responsibilities.
  • AOs should be required to provide positive assurance over major projects and policy initiatives at key implementation stages, and raise any concerns about the use of public money through AO assessments.
  • All departments should prepare accountability system statements setting out all of the accountability relationships and processes within that department.
  • AOs should specify the financial and performance data they need to oversee systems of delivery and manage their accountabilities. These data specifications should be set out in accountability system statements and fully aligned with the new single departmental plans.
  • The Treasury needs to provide stronger leadership and support to AOs across government, particularly by acting as a critical friend to help AOs develop their accountability systems.

Accountability essentialsAnd what does all of this mean for non-AOs?

You don’t have to be a permanent secretary or even a senior responsible owner of a project to have an important role to play in accountability.

Applying these four ‘accountability essentials’ will ensure public services and government projects are properly accountable. It may not be your head on the block, but next time you have to gather data, complete a report, justify a decision or payment, remember that it’s all about taxpayers’ (including your) money being spent well.

It is unusual for the NAO to examine the relationship between civil servants and ministers – although supporting accountable government is, of course, the lynchpin to all our work. But we want to open up these important issues for debate, and we know it’s difficult for civil servants to raise them. We await the government’s response to our and PAC’s recommendations and hope to see positive progress. We will conduct further studies, and communications such as this post, and welcome your comments and invite you to contact us. Accountability needs to be more than an afterthought – it needs to be central to decisions about how taxpayers’ money is spent.
Pauline Ngan

About the author: Pauline Ngan is a Senior Analyst working on the NAO’s cross-government value for money studies. She joined the NAO in her current role in 2010, and prior to that was the Committee Specialist for the House of Commons Public Administration Select Committee. She has also worked for the research thinktanks Democratic Audit and the New Economics Foundation.


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