The National Audit Office (NAO) is the UK’s independent public spending watchdog.
We support Parliament in holding government to account and we help improve public services through our high-quality audits.
We are independent of government and the civil service. The Comptroller and Auditor General (C&AG), Gareth Davies, leads the NAO. He is an officer of the House of Commons with statutory authority to:
The Public Accounts Commission (TPAC), a parliamentary committee of MPs, oversees our work.
Read more about the governance of the NAO.
We have an ambitious five-year strategy from 2020 to 2025. Its aim is to improve our support to Parliament in examining public sector performance, provide more practical recommendations that lead to better outcomes, and share more of our independent insight. Read more about our recent impacts in our Annual Report and Accounts 2022-23.
Our work helps Parliament’s scrutiny of government, achieves a positive financial impact and makes a difference to people’s lives.
We support the work of the Public Accounts Committee (PAC). It uses our reports to hold evidence sessions focused on public spending and scrutinising the implementation of government policy.
Audited bodies are required to respond to recommendations made by PAC which are often based on our work.
Read more about our support to Parliament.
We report on issues that matter to citizens – for example, our work on government’s progress in achieving net zero, our investigation into the East West Rail project, and our report on the condition of school buildings.
Our work has a positive financial impact through reduced costs, improved service delivery and other benefits to citizens.
Our people are experts in a wide range of specialisms. We work together to audit public spending and share our insights to drive improvements in the public sector.
We provide an independent audit opinion on around 400 accounts per year. The C&AG certifies these accounts and reports the results to Parliament.
We audit public sector accounts, including:
Our work provides increased transparency that money is spent in line with Parliament’s intention. It gives government bodies the insight they need to manage taxpayers’ money more effectively.
See our latest Financial Audit reports.
We report to Parliament on whether government is delivering value for money.
We define good value for money as the optimal use of resources (economy, efficiency and effectiveness) to achieve the intended outcomes.
We publish around 60 value-for-money reports per year. These reports are impactful, timely and relevant and respond to complex challenges facing government. We make recommendations in these reports on how government can achieve value for money and improve services.
We also publish responsive reports to establish facts where there are concerns about emerging public spending issues.
In delivering our work, our role is not to question government policy objectives. We look at how government has spent money delivering those policies and if that money has been used in the best way to achieve the intended outcome.
See our latest value for money reports.
Our expert insight teams provide valuable and practical insights on how public services can be improved.
We draw these from our extensive work focused on the issues that are a priority for government, where we observe both innovations and recurring issues.
Our insight work includes:
See our latest insight publications.
Our international work helps us and other audit offices across the world learn from each other to strengthen our efficiency and insight. We have three areas of work:
We are responsible for maintaining and publishing the Code of Audit Practice, which is approved by Parliament.
The code sets out what the auditors of local government and health bodies are required to do to fulfil their statutory responsibilities.
Read more about the code of audit practice.
]]>The arrangements for delivering rail services in England are complex and distributed across the public and private sector. This makes it difficult for Parliament and taxpayers to understand the overall financial position, to which the taxpayer is ultimately exposed, and the impact of government’s choices. Although the rail system was privatised on a franchising model in the 1990s, government provides significant ongoing subsidy and has a statutory obligation to put in place an ‘operator of last resort’ if a franchise cannot provide passenger services.
The COVID-19 pandemic made government’s financial exposure to these risks more immediate because emergency agreements transferred day-to-day revenue and cost risks to the Department, and precipitated the end of the established commercial model for franchising. The Williams Rail Review, set up to address long-standing issues within the system, is expected to report during 2021.
This overview aims to provide clarity at a moment of significant industry change. It looks at:
It covers England only as rail in Scotland, Wales and Northern Ireland is devolved to varying degrees.
]]>Good reporting in the public sector should allow the public and Parliament to understand to easily understand an organisation’s strategy and the risks it faces, how much taxpayers’ money has been spent and on what, and what has been achieved as a result. Following the challenges of the last year, most notably COVID-19, clear and transparent reporting is hugely important.
Transparency and accountability in central to strong financial and risk management in government, and how this is supported by clear and understandable reporting. With that in mind, we’re delighted to share a recent National Audit Office report which cuts to the heart of this: the Good Practice in Annual Reporting Guide. Our guide sets out good-practice principles around a number of key areas to help public sector organisations to compile their Annual Reports. Those principles are:
Building on these principles, our guide provides some excellent examples from public sector organisations that we think are leading the way. Below we have picked out a few key takeaways for organisations to consider as part of their preparations for 2020-21 Annual Reports.
Risk and Governance: There should be an increased focus on the risks and challenges of recent events and how these are managed, including:
Strategy and Operations: There should be a clear articulation of purpose and objectives, and how an organisation’s operations support their objectives. In particular:
Measures of Success and Financial Performance: There should be a balanced assessment of goals achieved and performance against targets, and financial performance should be understandable and consistent with the underlying financial statements. For instance:
Lastly, the NAO co-sponsor the annual Building Public Trust Awards, Public Sector reporting category with PwC, to give credit to organisations who are demonstrating excellence in government financial reporting. If you believe your organisation’s 2020-21 annual report and accounts is an example of excellent reporting, you can nominate it for the Building Public Trust Awards – Public Sector Reporting Award by emailing building.public.trust@nao.org.uk by 30 June 2021.
Authors: Chris Coyne, Rachel Nugent, Catriona Sheil and Courtnay Ip Tat Kuen.
This article was first published on OneFinance (login required)
]]>During 2018-19 we certified 390 accounts, published 66 major reports, and supported 61 evidence sessions of the Committee of Public Accounts. Our recommendations helped government improve public services, and our work led to audited financial impacts of £539 million in 2018. Our Annual Report also reflects on the contribution made by Sir Amyas Morse as he concludes his tenure as Comptroller and Auditor General.
“In the final year of my 10 years as head of the NAO, I have seen the public sector face the most significant and long-lasting change that many of us are likely to see in our lifetimes. While government has continued to grapple with the challenges of delivering better services to a changing population and with fewer resources, and delivering programmes of a gargantuan scale, such as High Speed 2, Smart Meters and the Ministry of Defence’s 10-year Equipment Plan, it has also had to prepare for the UK’s planned exit from the European Union.
“At times like this, the independent oversight provided by the NAO has never been more essential. I was determined to provide transparency to help improve Parliament’s and the public’s understanding of government’s preparedness for the UK’s exit from the EU, and I am pleased with what we have achieved this year. From short, factual briefings to more in‑depth reports on topics such as the financial settlement, departmental preparedness for EU exit and the UK border, no other organisation has the ability to undertake this important task.”
Amyas Morse, Comptroller and Auditor General
“The NAO’s greatest asset will always be its people. Time and time again, the Board and I witness the way in which NAO people embody our values of independence, authoritativeness, collaboration and fairness. No one does this better than Amyas Morse. During his 10-year tenure as Comptroller and Auditor General, Amyas has made an outstanding contribution in driving public sector improvement and supporting Parliament in responding to the challenges faced by government. His track record of making difficult, independent and courageous audit judgements under pressure is undisputed. Amyas leaves the NAO in a very strong and healthy position to cope with the likely challenges it will face in the future. On behalf of the Board I would like to extend our heartfelt gratitude for the service Amyas has provided to the NAO, Parliament and the nation as a whole.”
Lord Bichard, Chair, NAO
Two complementary corporate reports covering our performance during 2018-19 have been published at the same time: the NAO’s Transparency Report and our Diversity and Inclusion Annual Report.
The Transparency Report shows how we prioritise and pursue best practice and the highest professional standards in our audit work and the significant impact it had during the year, both in terms of public sector improvement and transparency in the way public funds are spent, on behalf of the taxpayer.
The Diversity and Inclusion Annual Report summaries our progress and activities against the first year of our Diversity & Inclusion Strategy 2018-21.
A summary of our Annual Report and Accounts and an overview of the NAO can be found in the ‘Introduction to the NAO’ document on our About us page.
]]>Today’s report to Parliament by the NAO looks at all central government department PFI deals finalised between April 2004 and May 2006 and follows up a 2003 report by the Public Accounts Committee which found that PFI tendering did not, in all cases, follow good practice and was potentially risking value for money. The report focuses on the process for tendering and agreeing a deal and how this might be improved.
Tendering times can be too long for conventionally procured projects, of course, and cutting timescales without regard for value for money can be counterproductive. But value for money is most at risk during the final stage of negotiations with a single, preferred bidder, after the competitive process has finished.
For projects finalised between 2004 and 2006, this final stage lasted 15 months on average. One in three projects examined by the NAO made significant scope and specification changes both upwards and downwards to the project during this period – amounting to 17 per cent of the total project value. This should become less common in the future, however, owing to the application of new EU procurement rules.
PFI projects are also receiving fewer developed bids than previously. Evidence in the report suggests the private sector is becoming more selective in bidding: 85 per cent of PFI projects that closed prior to 2004 received three or more developed bids. For projects that closed between 2004 and 2006 this had reduced to 67 per cent of projects. One reason given for this is the length and cost of tendering.
The report describes the measures taken by the Government to improve the PFI tendering process: including the development and enforcement of standardised contractual guidance and, in the schools sector, the creation of Building Schools for the Future, a programme which brings together all future PFI school projects. Most recently, the Treasury’s March 2006 publication, PFI: Strengthening Long Term Partnerships, set out proposals to improve public sector skills and procurement support and to reduce tendering times and costs.
Recommendations in the NAO report add to these, calling for the introduction of testing target times backed up by improvements in project management and better use of existing expertise across government.
]]>The public sector spends almost £650 million a year on post, ten per cent of the total licensed UK mail market. Around £250 million of this is spent by central government departments, with the Department for Work and Pensions and HM Revenue and Customs responsible for more than half of this total. Despite the growth in the use of internet and email, at least for the foreseeable future conventional mail will remain essential to the way public bodies communicate with the public.
Significant improvements have already been made. For example, the DVLA claims savings of some £3 million a year by doing more of the mail sorting themselves and HM Revenue and Customs is aiming to save £2 million a year by improving its address data, so reducing the amount of mail returned as undeliverable.
But there is a wide range of performance across the public sector. The average cost of mail per item varies from 31.1p to 21.5p, and the average cost across the public sector at 28p per item is a quarter higher than that paid by the financial services sector, at 22p per item, and higher still than the utilities sector, at 20.4p per item. Some of these differences can be explained by greater volume of weightier items, such as application forms, or the need to use first class post, but there is still significant scope for savings.
On top of the savings already made, the NAO estimates that a further £31 million can be saved annually by 2008-09 in four main areas:
These savings are estimates across the public sector, including the health, education and local government sectors, and many of the improvements can be introduced at low cost and within a short timescale. This is particularly true of changing to second class mail, competitive tendering, reducing undeliverable mail and switching to more efficient mail products. Of the £31 million total, £15 million can be saved by central government, around £8 million by local government, and £4 million each in the health and education sectors. Often, the crucial first step is working closely with existing suppliers.
In addition, there is scope for public sector organisations to improve the efficiency of their use of postal services, by switching to the internet or telephone as an alternative or departments sending out joint mailings.
The NAO has produced a guide to help public sector organisations improve efficiency, drawing on examples of good practice in both the public and private sectors of how to reduce costs while at least maintaining customer service levels.
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