Government departments should publish outcome delivery plans and cross-cutting mission boards plans every year as part of a drive to improve spending decisions and transparency around outcomes, the National Audit Office has said.
In a report that calls for changes to the “incentives and behaviours” around planning and spending, the NAO has called for a series of reforms to enable parliament to better hold government to account for its spending decisions.
The spending watchdog said its work over the last few years has highlighted the “rushed, intense, and adversarial nature of spending review discussions”.
It said not having a “consistent set of information about opportunities and risks on which to make strategic spending choices” has led to “underlying weaknesses” in financial management going unnoticed. These problems have been magnified in recent years by a series of short-term spending reviews, it added.
Annual departmental outcome delivery plans were introduced in 2020 in an attempt to improve on predecessor Single Departmental Plans. In 2021, each department was required to publish an ODP with its priority outcomes; metrics to track progress towards those outcomes; and the resources (funding and staffing) allocated to each priority. However, the 2022 exercise was suspended and none have been published since, although they have not been officially scrapped.
The NAO said that while departments’ annual reports include information on their performance against ODP objectives over the year, without the annual plans this information is neither independently verifiable nor subject to external audit.
Reinstating annual ODPs is one step the NAO has proposed to help address a series of lessons it has identified to maximise value for money in government spending.
One of the lessons in the report stresses the importance of departments working together when planning and managing spending, risks and delivery against common objectives.This aims to tackle the problem of departments, ALBs and local government spending on “related but uncoordinated activities and initiatives” – which the NAO said reduces value for money and leaves gaps in delivery and risk management.
The NAO report notes that the Treasury is “optimistic” that the government’s new of approach using cross-cutting “missions” – each with its own delivery board – will facilitate greater cooperation across government.
The Treasury has said the boards for the five missions – economic growth, clean energy, crime, childcare and education reform and the NHS – will be involved in agreeing departments’ submissions to next year's multi-year spending review, and that it expects the role of mission boards to strengthen over time, the NAO report stated.
Another of the NAO’s lessons is that it is “essential to monitor costs, performance, and risk levels” and to build in “rigorous in-flight and post-hoc evaluation”. It said the government is currently not consistently monitoring progress against objectives, risks and value for money of its projects, programmes and overall spending.
“Despite clear guidance, rigorous evaluation is the exception rather than the norm,” the report says, noting that the government has yet to meet its commitment to make its evaluation registry open to the public. The report calls on the government to recommit to transparency around evaluation by ensuring that all completed government evaluations are publicly accessible and searchable by April 2025.
The NAO has also called on the government to publish a summary of its spending choices after each spending review. The published data should be “granular enough to show the effect on allocations by department, priority outcome and strategic programme”, it said.
The Treasury and the Cabinet Office should meanwhile come up with an action plan to address the eight lessons raised in the report, the NAO said.
Other lessons stress the importance of basing spending decisions on good-quality evidence; having clear priorities on which to base spending choices at both whole-of-government and departmental level; and being transparent about objectives, plans, spending choices, risk appetite and assessments, and performance and outcomes delivered.
The Treasury-Cabinet Office action plan to address the eight lessons should be supported by an “evidence-based understanding of what will affect lasting change”, the NAO said. It should also have evaluation of progress built in, and have “suitable senior ministerial and administrative leadership”.
The NAO said it had worked closely with the two departments as they start to develop plans for SR2025.
“We will return to this topic at a suitable time and will be looking for evidence of progress in our value-for-money work across government,” it added.
'Cultural shift' needed
The NAO said that when it last reported on the government’s planning and spending framework in 2018, it had seen “positive developments” in the Treasury’s approach to value for money – including the Barber Public Value Review, which formed the basis of of a new public value framework – and that the Cabinet Office had been “working to improve the maturity of business planning across departments”.
“But we did not see an enduring system of integrated, realistic short, medium and long-term planning that any incoming government could rely on to deliver value for money,” it said. Achieving this “might require different skills and a significant change in mindset, both at the centre of government and in departments”, it added.
The period since the NAO’s 2018 report has been “characterised by rapid change in both the government itself and the fiscal and risk environment, and a highly short-term reactive approach”, the watchdog said.
It added that despite there being evidence of “hard work” in the Treasury and Cabinet Office to embed its recommended improvements to the planning and spending framework, “there has not been the cultural shift towards a focus on long-term value for money that is needed”.
“Changing the incentives and behaviours embedded across central government will take leadership, functional expertise and collegiate behaviour at all levels, official and political, over a whole parliament and beyond,” it said.
“Parliamentary support and challenge around planning and spending is also an essential part of the necessary change.”
Commenting on the report, NAO head Gareth Davies said: “Limited resources, amid growing challenges and ambitious missions, means real change is needed if the next spending review is to set up the government for future success.
“The government can use the planning and spending framework to help make a cultural shift towards a focus on long-term value for money.
“Our report makes practical recommendations to support this change.”