Background to the report

Central government bodies are expected to comply with a wide range of requirements. These requirements help deliver many benefits. They ensure that government bodies are run efficiently, effectively and with integrity; are accountable to Parliament; and are transparent to the public with regard to their use of public money. However, complying with requirements involves time, effort and cost.

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Well-designed requirements support meaningful and efficient compliance. They ensure that organisations are held to account and that their performance is transparent. They reduce the risk of incidents that may damage public trust, without placing an undue burden on those who are tasked with implementing the requirements and ensuring that they are adhered to.

The government has a longstanding commitment to ensure the proportionality of requirements. Some requirements apply uniformly to all organisations because the government seeks to minimise certain risks, such as the misappropriation of public funds. Other requirements can be applied in a more flexible and tailored way.

The government announced in March 2025 that it intends to undertake a fundamental reform of the British state. As part of its focus on increasing productivity and efficiency, it aims to simplify and streamline regulations.

Scope of the report

This report considers how a proportionate approach to compliance with requirements can improve efficiency and effectiveness while delivering accountability across small bodies. It does not evaluate the value for money of the government’s spending to set or comply with requirements.

It does, however, make recommendations to the government and states what the NAO commits to do, as the government’s external auditor, to help it achieve more meaningful and proportionate accountability and compliance with requirements.

The report focuses on small bodies’ compliance with:

  • the functional standards, which set out what government bodies need to do to achieve consistent and efficient delivery of policy, outcomes and services in areas such as counter fraud, communications and finance, and why this is important
  • the requirement to prepare and audit an annual report and accounts (ARA) to support accountability, transparency and effective decision-making for the use of public money

The report does not cover ministerial departments, government bodies that are set up as charities or companies, local government bodies, devolved administration bodies, and organisations which do not require staff to carry out their functions, such as public funds and trusts, though some of the findings and conclusions may be relevant and applicable to them.

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Publication details

Press release

View press release (25 Jun 2025)

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