Select Committee on Treasury Minutes of Evidence

Annex 2


A.  Statement of accountability

  The Government Actuary's Department (GAD) reports to the Chancellor of the Exchequer, with day to day responsibility delegated to the Economic Secretary. The Government Actuary, as Accounting Officer, is accountable for all expenditure and for maintaining appropriate controls and proper accounts and records.

B.  Delivering key results

  The aim of GAD is to provide actuarial advice to Government Departments and other clients in respect of employer sponsored pension arrangements, social security and demographic analyses, including underpinning Ministerial policy decision making and in respect of the supervision of insurance companies.

B1.  Key peformance targets

1.Deliver timely and accurate actuarial advice to clients. Agree within six months of the start of each financial year Service Level Agreements, detailing work programme, targets and evaluation requirement with clients.

Deliver 90 per cent of advice to agreed timetable and cost.

2.Improve levels of cleint satisfaction scores. Achieved through issuing an annual client satisfaction survey to all major clients. Measured from a baseline of 100 (April 2000), achieve a 5 per cent improvement in customer service by April 2004.

To achieve an internal quality control measure target of 4.5 (conducted by the Government Actuary).

3.Increase the annual aggregate efficiency index each year by 1.25 per cent. measured from a baseline of 1 (March 1999), to achieve 6.25 per cent improvement by March 2004 based on the following internal statistics collected each year:

Annual overhead recover rate;

Average charge-out rate;

Proportion of chargeable time to conditional hours worked by staff.

4.Review regularly support services and activities.

As part of the 2000 Spending Review, GAD's "Better Quality Services" review covered its actuarial services which accounts for 90 per cent of all the department's services. GAD will review all of its other support and services and activities by March 2003.

B2.  Measuring performance

  The following annual measurements are not key targets but the data derived from these measurements form the data from which the target relating to the departmental aggregate efficiency index is derived. The data is as follows:

    —  Annual overhead recovery rate.

    —  The average charge-out rate.

    —  The current level of proportions of chargeable time to conditioned hours worked by staff.

  The SDA agreement has a target index reduction of 1.25 per cent for each year of the current CSR period. This is based on the assumption that proportions of chargeable time remain constant, and the average charge-out rates (deflated by the increase in GDP) and recovery rates each reduce by 0.5 per cent.

C.  Improving performance

C1.  Strategies for improving performance

  The key performance targets detailed above are embedded within GAD's Business Plan, which is closely monitored by the department's Senior Management Team. Assurance of the integrity of performance information is attained through:

    —  GAD's Internal Audit Committee reviews;

    —  consultation with stakeholders on the quality and focus of performance information; and

    —  annual reviews of our performance measures and targets.

  As part of the commitment to improving our Information Technology the department is currently in the process of providing the facility for on-desk Internet access. Improvements are also currently being made to improve the department's e-mail facilities. While supporting the Government's aim of having all departments connected to the GSI, as an enabler of e-government, GAD is examining the possibility of being connected to the GSI by 2001-02. However, GAD's Senior Management Board will not take a final decision until further cost/benefit analyses are carried out. A feasibility study is underway to ascertain the most efficient and cost effective way to replace GAD's pensions valuation software and the aim is to implement the change by March 2001.

  The department, as a service provider of actuarial advice, is liable from time to time to have fluctuations in demand from clients. However, because GAD operates under net running costs controls it has the flexibility to meet these sudden surges in work demands by obtaining permission for increasing its gross running costs provided sufficient receipts will be generated to cover the extra cost.

  All of the department will have been reviewed under the Better Qualities Services (BQS) Programme by March 2003, reinforcing GAD's commitment to BQS.

C2.  Value for money targets

  GAD works constantly to provide clients with actuarial services of the highest possible value for money. GAD's clients have the freedom to seek tenders for the work from commercial providers of actuarial advice and it is therefore incumbent on the department to ensure that fees charged represent best value for money. Charge out rates include provision for running costs, which are kept under constant review. Measures to achieve this have included the use of contracted private services where appropriate, and re-location to generate saving on accommodation expenditure. A further target for improved efficiency is:

    —  by 31 March 2002 to have steadily reduced the proportion of time recorded as chargeable, which is subsequently written off as non-chargeable before billing or through invoices not being paid, by a target of 1 per cent each year, to achieve a 3 per cent overall reduction.

C3.  Procurement

  Capital expenditure within GAD is limited to an annual figure of just over £200,000 to enable the department to carry out a rolling programme of replacement and improvement of IT equipment and office furniture. Full value for money evaluations are made in respect of all purchases and the tendering process is fully adhered to.

C4.  Fraud

  The department requires all staff at all times to act honestly and with integrity and to safeguard the public resources for which they are responsible. Although fraud is an ever-present threat to those resources, the procedures currently in place within the department have ensured that no fraud has been perpetrated to date. The department has developed and maintained effective controls to prevent fraud after identifying risks to which the systems and procedures are exposed. Continuing vigilance is assured by rigorous annual internal and external audits.

C5.  Prompt payment of bills

  GAD's policy is to pay all bills in accordance with contractual conditions, or within 30 days of receipt of goods and services or the presentation of a valid invoice, whichever is the later, where no contractual conditions exist. However, payment of bills cannot be authorised in the appropriate time scale in cases where an invoice query remains unresolved through no fault of the department. The department already has a good track record for making prompt payment and will continue to seek improvements where possible whilst acknowledging that achieving a 100 per cent target is not a realistic target. GAD will seek to improve performance from 99 per cent paid on time to 99.5 per cent by 2004.

D.  Consumer focus

D1.  Consumer tests

  GAD is a provider of actuarial consultancy services to other Government Departments and other clients. To ensure that the services provided meet the needs of the consumers, the department has:

    —  instigated qualitative procedures to formally monitor the quality of advice produced by the department which are carried out by the Government Actuary;

    —  introduced a client questionnaire to enable annual assessments of client satisfaction.

E.  Managing people

E1.  Civil service reform

  GAD is a very small department with approximately 100 staff. The majority of the staff are in Actuarial grades, which are not found elsewhere in the Civil Service, and all its senior staff, including the Head of Department (the Government Actuary) are in those grades and are not part of the Senior Civil Service. The Department has produced a draft reform plan, which establishes mechanisms for assessing performance against the plan for the following measures:

    —  sharper performance management—a new Performance Management and Pay System has already been introduced with an objective and competence (or standard) based Appraisal System;

    —  maintenance of Investors in People (IiP) accreditation—IiP accreditation was gained in 1999 and training and development strategy programmes are in place to support increased management capability, skills development and opportunities to gain marketable qualifications at all levels;

    —  achievement of diversity targets—as previously stated GAD has no Senior Civil Service staff members. GAD, is by its recruitment and promotion policies, already making sure that all of its staff are aware of and value diversity and how it enhances the work of the department. GAD is committed to reviewing all its Equal Opportunities/diversity policies and practices over the next year to examine areas of potential for the promotion of positive Diversity Policies. A comprehensive development programme has been introduced to encourage staff to attain professional qualifications in addition to the actuarial training and development plans already in place. Within the limitation of the size of the department, opportunities are being given to the most promising performers to a wider experience of frontline delivery. GAD has actively promoted and supports the Civil Service Vision and Values Statement.

E2.  Sickness absence

  GAD is committed to contributing to the centrally approved reduction of public sector sickness rates. Consistent with the Government's aim of reducing the sickness absence rate in the public sector. GAD will reduce its average rate of 9.5 days absence per person to 7.5 days by 2003 and will operate effective occupational health retirement by 2005 consistent with or better than 3.72 retirements per 1,000 employees.

F.  Electronic Government

  GAD continues to support business links and data sharing between the department and other Government Departments. The establishment of a GAD website was agreed and implemented in October 1999, to facilitate the publication of the new population projections. GAD also agreed to provide all staff with desktop Internet access via a commercial provider and this service was implemented in June 2000. Consideration of connection to the Government Secure Intranet remains an objective for the financial year 2001-02.

  GAD will play its part in helping to meet the Government's new target of 100 per cent for electronic delivery of government services by 2005. In addition to the initiatives mentioned above, GAD will encourage clients to use Electronic Mail facilities to communicate with the department. Most GAD staff are highly computer literate and able to deliver services electronically to any client who wishes to receive communications in that way. GAD has also recently put into practice procedures for using the Government Procurement Card for low value purchases of computer and office supplies.

G.  Policy and strategy

  GAD is a provider of actuarial advice and has no government policy-making responsibilities of its own. However, it does make a significant contribution to the development of policy in some areas where it provides consultancy advice to other departments eg to DSS on social security and pension policy matters, to HM Treasury on occupational pension policy for the public sector. GAD will aim to contribute, so far as it is able, to the key principles set out in the Modernising Government White Paper for developing excellence in policy making. It will work, together with clients, to help design policy around shared goals and will do what it can to promote and facilitate joint working with and between other departments.

H.  Departmental investment strategy

  The department owns a low value asset base consisting of IT equipment and office furniture. Expenditure on capital is expected to remain constant at just over £0.2 million, the level required to continue a rolling programme of upgrading and replacement of IT equipment and office furniture. At this level of expenditure GAD has not been required to produce a separate Departmental Investment Strategy.

  The effective control of the department's assets is assured by:

    —  up to date, accurate and complete records held on an asset register;

    —  the retention of inventories which allow regular physical checks of assets to be made; and

    —  regular reconciliations which are carried out between the asset register and the inventories.


PSA TargetTechnical Note
To achieve an internal quality control measure target of 4.5 The Government Actuary (GA) has introduced procedures formally to monitor the quality of actuarial advice by GAD. This involves him seeing a cross-section of work issuing from the department (in particular formal reports and drafts going out for comments) and allocating an assessment score (from 1-below standard to 5-excellent) based on the following criteria:

—relevance to terms of reference and client's needs

—clarity of expression

—compliance with professional standards

—style and presentation

—use of graphics (where appropriate)

—quality of recommendations given—are they clear and helpful?

It is not possible or practicable for the GA to see every piece of work but from the cross section reviewed the GA is able to supply an average internal quality assessment score

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2001
Prepared 27 March 2001