Committee of Public Accounts: Press Notice

Committee of Public Accounts recommendations on public services accepted by Government

Edward Leigh, Chairman of the Committee, today said:

"If the UK fails to meet EU targets on diverting biodegradable household waste from landfill, we stand to be fined up to £180 million a year. I am pleased that, in the wake of the Committee's report, the Government appears to have finally developed an effective strategy for achieving these targets.

"Recommendations by the Committee are also having a welcome effect in another area. The Government is now putting in place measures and controls for improving its grasp of how much road schemes will cost and when they will be delivered.

"The Government has now accepted that the new contract for consultants was a something for something deal. But, despite a 27 per cent pay increase, it is too early to measure improvements in productivity. I welcome the fact that the Department is now working with NHS trusts to improve job planning and help realise the benefits of the new contract.

"The Department for Innovation, Universities and Skills is taking forward the Committee's recommendations to improve the selection and management of large scientific facilities: in particular, the need to get a grip on the accuracy of whole-life cost estimates at the selection stage.

"The MOD has increased the level of planned expenditure on military living accommodation but acknowledges that it will still take considerable time to complete the upgrade of such accommodation. The MOD has addressed many of our recommendations by improving the way it prioritises its work and collates information on its costs. Its implementation in the light of our report of energy saving measures should save over £2 million a year.

"Following our very critical report on the Thames Gateway programme, the Department for Communities and Local Government will be transferring the responsibility for support and funding of the programme to the new Homes and Communities Agency and concentrating its energies on leading and improving cross-Whitehall co-ordination of investment.

"As a result of our work reviewing the tendering and benchmarking of PFI deals, the Treasury will be publishing benchmarks for tendering times and data on the outcomes of value testing exercises across PFI projects. Given the price increases we have seen on past value testing exercises, the public sector should not enter into long term arrangements for services such as catering and cleaning. The market place for such services may offer opportunities for improving value for money in the future.

"Our review has led the Department for Transport and its agencies to put their management of sickness absence on a firmer footing, and beneficial results have already been achieved. The two worst performing agencies, the Driving Standards Agency and the Driver and Vehicle Licensing Agency, have begun to manage long-term sickness cases more proactively.

"As a result of our review of the filing of VAT and Company Tax returns, HM Revenue and Customs will now analyse the risk posed by businesses with returns outstanding and the links between late filing and other risks such as non-payment."

The Government was responding to the following reports by the Committee of Public Accounts:

Defra: Reducing the reliance on landfill in England

The European Union has produced a Landfill Directive setting out maximum amounts of biodegradable municipal waste that Member States can send to landfill, with substantial fines for non compliance. England has been given targets of sending 11.2 million tonnes to landfill in 2010, 7.5 million tonnes in 2013 and 5.2 million tonnes in 2020. Progress towards these targets had been slow, but has accelerated since the PAC report on Reducing the Reliance on Landfill was produced. The Government has undertaken to carry out the majority of the actions recommended in our report. These include measures to accelerate the development of infrastructure to process waste so that it does not have to be landfilled, further research on the health effects of waste incineration plants, and better use of current data to inform decisions on the amount invested in new infrastructure.

Estimating and monitoring the costs of building roads in England

The Department for Transport has accepted all the recommendations in the PAC's report - Estimating and monitoring the costs of building roads in England.

€ It is now developing a Project Control Framework to strengthen the estimating and project and contract management of road schemes, and developing a combination of measures based on cost, time and quality to better measure performance.

€ A new Commercial division within the Agency, to be staffed by experienced highway estimators and commercial managers, is expected to improve the estimating process, as will a new database from April 2008 which will derive the unit costs of road building from the actual costs of completed projects.

€ In 2009 the Agency is due to review again the effectiveness of its evaluation process of schemes after they open to identify the actual costs, benefits and other impacts of specific projects, and compare these with estimates made during the design phase to further improve estimating.

€ The Agency is assessing project management and commercial skills in its Major Project's Division and these assessments will inform personal development plans for each project manager.

€ The Agency has recently participated in an international benchmarking exercise comparing on road building costs across 13 European countries.

Pay Modernisation: a new contract for NHS Consultants in England

The Department of Health has accepted most of the recommendations in the PAC's report - Pay Modernisation: a new contract for NHS Consultants in England. In particular, it accepts that the new contract was a something for something deal with investment in return for reform but after three years it is still too early to see the benefits. The Department are committed to ensuring continuous improvement in realising the benefits of the contract. The Department accept that job plans should be more closely aligned with patient and trust needs. It also accepts that trusts should measure and compare the productivity of their consultants.

Big Science: Public Investment in large scientific facilities

The Department for Innovation, Universities and Skills has accepted the Committee's recommendations for improving the selection and management of large scientific facilities. The Department has begun to strengthen selection procedures, for example, by improving transparency and by drawing on the expertise available in the broader scientific community and industry. It has also worked with the Research Councils and the NAO to prepare a handbook which will improve the quality of project appraisal and evaluation by setting down practice which has already proved to be successful for large scientific facility projects. As part of strengthening project appraisal, Research Councils will improve the accuracy of whole-life cost estimates, for example, by drawing on the experience of the private sector and other pubic sector bodies. The Department has also commissioned an assessment of the economic benefits of hosting large scientific facilities in the UK.

Managing the Defence Estate

The Department accepts that much Service living accommodation requires upgrading or modernisation and that more work is required. It has increased the level of planned spending on such accommodation with £550 million ring-fenced for the upgrade of accommodation over the next three years. However, the Department acknowledges that, given the legacy of decades of under-funding, it will time some time to complete any upgrade programme. The Department fully accepts that it needs to do more work to understand the cost of running and maintaining its estate so that there is no doubt where funding is most needed. It also acknowledges the inadequacy of its arrangements for planning Minor New Works and has made improvements to its procedures and will continue to monitor the impact of these changes. Following the Committee's recommendation on replicating energy savings measured identified in a pilot project at RAF Kinloss, the Department is implementing measures which should result in savings of some £2 million a year.

The Thames Gateway: Laying the Foundations

The Department has accepted the key recommendation that operational management of the Gateway should be delegated to the new regeneration agency, the Homes and Communities Agency, to sit alongside the other housing growth programmes and utilise the agency's housing and regeneration expertise. The Department will then be able to concentrate on leading and improving cross-government co-operation. It has already implemented another of the Committee's recommendations to establish a cross-Government Board of senior officials to provide overall strategic leadership of the programme. The Government has committed to ensuring the economic benefits of the regeneration of the Gateway are shared by its existing residents and it intends to meet with the Thames Gateway Parliamentary Group to discuss how the programme can most effectively engage MPs. The Department has accepted that a revitalised marketing strategy is needed for the Gateway and is considering a single approach to be established in 2008 for handling inward investment inquiries for the Thames Gateway as a whole.

HM Treasury: Tendering and benchmarking in PFI

The Treasury, Partnerships UK and the Office of Government Commerce are taking action to improve PFI tendering and benchmarking. They will now monitor the level of competitive bidding in future deals, publish agreed benchmarks for tendering times across PFI sectors, update and continue to publish data on the outcomes of value testing exercises, undertake a cross-sector survey of user satisfaction and make complex procurements such as PFI deals a priority area in the reform of the Government Procurement Service.

The management of staff sickness absence in the Department for Transport and its agencies

The Department for Transport has accepted all of the recommendations for reducing sickness absence across the Department and its agencies in the PAC's report. In particular, the Department has developed a new strategy for improving absence management, based on best practice principles, and all businesses now have continuous improvement plans that identify specific initiatives for managing both short and long-term absences and have agreed targets intended to achieve the Health and Safety Commission target of 7.5 average working days lost to sickness across the whole Department by 2010. The Driving Standards Agency now has a better understanding of the main causes of, and differences in, sickness levels within its test centres and the Driver and Vehicle Licensing Agency has extended its networking with other local employers to share information and improve performance. Both agencies have reviewed long-term sickness cases resulting, in the year to November 2007, in a total of 55 dismissals and 12 ill health retirements and reductions in average annual sickness rates in both organisations. Several agencies are also looking to improve motivation and morale in areas of repetitive work, where sick leave tends to be higher, and are making managers more accountable for reducing sickness absence in their organisations.

HM Revenue and Customs: Filing of VAT and Company Tax returns

In response to the Committee's recommendations, HM Revenue & Customs is considering reducing the frequency of VAT returns to reduce the administrative burdens of the tax system. In designing new penalty regimes it has recognised the need to rigorously enforce penalties and to support them with information systems to assess their effectiveness. It is also introducing two projects to improve its understanding of the links between non-filing of tax returns and other types of non-compliance such as non-payment among different groups of taxpayers and across the main taxes.

Notes to Editors

1. This information is contained in Treasury Minutes presented to Parliament in February 2008 by the Financial Secretary to the Treasury.

2. For a list of all the recommendations and responses, go to http://www.official-documents.gov.uk/document/cm73/7322/7322.asp