It’s an obvious point to say that we are living in an extraordinary time, and this includes in the context of Government spending. In the past year the Government has spent an additional £170 billion to mitigate against the impact of the global pandemic. Within this context, spending decisions have been made that require accountability and a continued focus on delivery outcomes, whilst balancing the need to make emergency decisions.

The way central civil service is scrutinizing spending decisions is evolving. The ethos for delivery of public services is increasingly focusing on outcomes. This involves asking questions such as what are the results? How does that look? The intention is that input measures such as staff numbers will become increasingly less relevant in spending decisions, including in settlements with arm’s length bodies (ALBs).

There is clearly a balance to be struck by central government, specifically the Cabinet Office and HM Treasury, in how it maintains oversight of spending decisions. They need to, and do, trust accounting officers within departments and ALBs, while at the same time ensuring the obvious requirement that these colleagues are publicly accountable. The Managing Public Money document is a key tool for doing this.

There is recognition that sometimes too much centralized oversight can lead to wrong decisions, and also that these central teams need to be visible in the decision making process. The example of the major projects approval process, a very significant area of Government spending, was cited as one example where these challenges are being tackled.

The Government’s Public Value Framework is a useful tool to help departments and ALBs focus on how they are delivering for the public, in particular when focusing on outcomes. Some ALBs have adapted the framework for their own organisation, in particular to reflect the specific values of their operation.

One such example is Historic England’s Public Value Framework, which you can find on their website alongside details of how they use it. Such a framework enables organisations to be more open minded. Colleagues highlight how this has enabled them to be more nimble in decision making, to demonstrate the wider value of their work and to invest in initiatives of longer term public interest, for example in support of the UK’s Net Zero ambition.

Once these outcomes have been decided on, a process that is not always straight forward, it can provide much needed clarity of purpose. This then helps with internal processes, for example risk management.

One interesting observation is that outcomes can be perceived by one group of stakeholders very differently to another group, and it might be that some stakeholders want very different results to the wider public. The role of the CEO is to disentangle these different priorities to ensure the organisation retains a direct purpose.

The Public Value Framework accords with similar frameworks in the private sector, although could be seen as more bureaucratic. In the private sector a lot of focus is on purpose beyond the bottom line. Such a framework can help.

Clearly good governance arrangements are very important to delivering effective outcomes. These arrangements vary from one organisation to another so the framework needs to be applied with thought to individual cultures.

What does the future hold? The hope is that as we come out of the financial uncertainty of the global pandemic and EU exit, the Government may be in a position to make a multi-year settlement for departments and their ALBs in 2021. It is also likely that the Government’s focus will include turning to the governance and delivery models of public bodies.  

It was noted that too much time can be spent on discussing individual governance arrangements between ALBs and government departments. However it is right that there should be a renewed focus on improving the ‘sponsorship’ framework to improve transparency, accountability and efficiency.

ALBs have a role to improve the process and will continue to feed into these developments being designed by the public bodies team within the Cabinet Office. A focus of ACE colleagues will be on getting the right levels of independence for their ALB, making sure the relationships with government departments work on multiple levels, and ensuring boards continues to have a clear and effective role.

Thank you to Nicola Shaw CBE, CEO at the National Grid, Cat Little, Director General of Public Spending at HM Treasury and Duncan Wilson OBE, CEO at Historic England for joining the panel.