Select Committee on Public Accounts Forty-Ninth Report


The Committee of Public Accounts has agreed to the following Report:



  1. The objectives of government policy, on which Ministers are accountable to Parliament, are beyond the scope of this report. But the policy-making process, and especially the evidence and assumptions with which policies are framed, does much to determine the practical scope for achieving value for money. In recent years we have reported on a number of serious failings arising from poor design or implementation of government policies which have led to taxpayers' money being wasted and citizens failing to benefit from improvements in public services (Figure 1). Although the good practice we recommend in this report might seem obvious, and we are pleased that this report refers to policies which have been well managed, the examples of failings we have identified in the past demonstrate that good practice is regularly not followed.
  2. If for example the information underlying the business case is unrealistic the policy may cost more than expected, as with the Millennium Dome where the assumptions about the number of likely visitors were ambitious and inherently risky and their subsequent underachievement resulted in significant financial difficulties.[1] If options are not tested to determine whether they will work in practice the programme may be difficult or impossible to implement. For example, insufficient time for specifying the requirement and piloting contributed to the delay and wasted money on the Benefits Payment Card Project.[2] Furthermore if a policy is not communicated to those who are intended to benefit they may remain unaware of its implications for them and fail to respond appropriately. For example, failure to publicise a change in the law about the State Earnings Related Pension Scheme gave misleading information to the public for more than a decade.[3]
  3. Figure 1: Instances of failings observed by the Committee of Public Accounts




    PAC Report

    If implementation is not tested a policy may be difficult or impossible to implement, may be delayed or may cost more than expected.

    The timetable for the Benefits Payment Card project had been very over optimistic. When projects go wrong, management should face up to the prospect of failure and take prompt decisions to avoid abortive costs.

    3rd Report, 2001-02(HC 358)

    If a plan for implementation has not been drawn up to cover the resources required to implement a policy, the necessary resources will not be available when needed and service delivery may suffer.

    The origin of the Passport Agency's inability to provide an adequate service during the summer of 1999 was the introduction in late 1998 of a new computerised system for processing passports. The Agency should have been more realistic about the time, resources and management effort needed to secure the successful introduction of information technology and the associated changes to operating procedures.

    24th Report, 1999-2000(HC 208)

    If risks with implementation of a policy are not assessed, policies may not deliver what is intended.

    The Contributions Agency contract let to Andersen Consulting to develop by February 1997 a replacement National Insurance Recording System (NIRS2) was critical to providing support for new pensions provisions coming into effect in April 1997. At the end of December 1998 the system was still not fully operational, meaning that thousands of benefits were being paid on an interim or emergency basis and there were delays in payments to pension holders.

    46th Report, 1997-98 (HC 472)

    If changes to an existing policy are not publicised widely those intended to benefit or be influenced by a policy may not understand it or may be confused.

    For nearly ten years from 1986, the Department of Social Security did not publicise adequately a very significant change to the arrangements for the inheritance of the State Earnings-Related Pension, introduced in 1986 but not due to come into force until April 2000. As a result, many thousands of people are likely to have made decisions about their future pension provision based on an incorrect understanding about the pension that would be inherited by their spouse after their own death.

    34th Report, 1999-2000

    (HC 401)

    If service delivery is not maintained in the event of something going wrong, citizens may fail to receive the service expected.

    Continuing backlogs of applications for citizenship, asylum or extension of stay in the United Kingdom caused enormous personal distress to hundreds of thousand of applicants and their families. The Home Office's contingency planning when things started to go wrong was inadequate.

    7th Report, 1999-2000

    (HC 130)

    If results from review and monitoring are not acted on, existing policies may not be implemented and the quality of public services does not improve or is put at risk.

    The number of broken rails on the rail network had increased since privatisation in 1996. Since 1998 the Office of the Rail Regulator had put pressure on Railtrack to improve track quality and to reduce the number of broken rails.

    35th Report, 1999-2000

    (HC 536)


  4. The Cabinet Office has issued guidance to departments on the principles of good policy-making.[4] On the basis of a Report[5] by the Comptroller and Auditor General we examined the progress made in encouraging departments to improve their policy-making so that risks to value for money are better managed. We took evidence from the Department of Health on its Meningitis C vaccination policy, the Department for Education and Skills on its National Literacy Strategy as well as the Cabinet Office on its policy to support women's entrepreneurship. We underline five main points:

  • Central to understanding the nature of a problem or issue requiring a policy response is sound analysis of the circumstances and economic and social factors that have led to the problem, as failing to have a realistic information base underlying policies may lead to policies costing more than expected and failing to deliver intended benefits. For example, we have expressed concern in previous reports that without robust, up to date, data it is difficult to see how the Department of Health, the NHS Executive, health authorities and NHS Trusts can target activity and resources to best effect (such as tackling hospital acquired infection, inpatient admissions, bed management and patient discharge; and hip replacements).[6] In designing policies departments should ensure that they draw on sufficient and reliable information, from external as well as internal sources, and involve staff with appropriate research and analytical skills.

  • Departments should ensure that they test how policies are likely to work in practice by consulting customers to identify barriers which may not have been considered in designing the policy but which need to be addressed otherwise policies may not be effective and there is a risk that sections of society are excluded. They should ensure, in particular, that those who may be less effective at expressing their views are not overlooked. For example, our reports on competition in the telecommunications and gas industries identified the lack of clear information on pricing structures as a barrier to delivering choice which prevented some customers benefiting from competition as much as they could.[7] [8]

  • Policies developed by one department can often have an indirect impact on other policies, such as care for the elderly which usually relies on a range of health, social support, housing and transport services. Departments should identify and consider connections between policies developed in one part of a department which may have an impact on policies developed in the same department or in other departments and agencies. If they do not, policies may be developed in isolation from other priorities with direct consequences for service delivery, resources being misdirected and lessons not learned. The Committee has, for example, been concerned at bed blocking in the NHS where people remain in hospital who do not need to do so because of inadequate arrangements for their care outside hospital, preventing the use of NHS beds for people needing to be in hospital.[9]

  • Departments also need to ensure that those who will have to implement a policy are consulted early enough. This is particularly important where responsibility for policy design and implementation is split between a department and an executive agency or where responsibility is shared by a number of departments. Failure to involve those responsible for implementation increases the risk of a policy not being workable, practical options being missed or of the policy not being cost-effective. For example, our recent report on the implementation of the National Probation Service Information Systems Strategy (NPSISS)[10] concluded that the Home Office lacked a strategy for communicating with locally managed probation services, and failed to enlist the support of users in those bodies. In turn, NPSISS has delivered some but not all expected benefits to local probation services.

  • The Cabinet Office has a role to promote improvements in policy-making but depends on departments to implement the good practice and advice which it recommends. The Cabinet Office sought to answer our questions as fully as possible but, as we said in our previous report on joint working,[11] lacked first hand information on the extent to which policy-making is improving in practice and delivering better public services. The Department of Health and the Department for Education and Skills were better able to answer our specific questions. In examining the impact of centrally led initiatives to improve value for money and public services the Committee will, as on this occasion, in future also seek evidence from Accounting Officers directly responsible for implementing these initiatives.


  1. Our more specific conclusions and recommendations are as follows:
  2. On initiatives to improve policy-making

      1. The Cabinet Office is promoting better policy-making through training and the promulgation of good practice as an important means of delivering better public services. Departments too should publicise in their annual reports and elsewhere what they are doing to improve policy-making and what this has achieved in terms of tangible improvements in public services.
      2. Departments have found existing guidance on policy-making inaccessible and not easy to use. The Cabinet Office is seeking to remedy this through the development of a good practice website. In doing so it should ensure that the guidance is practical and reflects the range of different circumstances which policies most frequently have to address.
      3. Some 400 million is spent annually on policy related research, but the distribution of specialist advisers across departments is uneven, with relatively small numbers of economists and other experts devoted to some high expenditure areas. Departments should assess carefully their need for specialist advice and determine whether this is best provided by in-house staff or purchased externally.
      4. On implementing policies

      5. The risks faced by any policy should be identified and assessed during its design and should be followed through to policy implementation when risk monitoring and management are essential.
      6. If a policy is not sufficiently well explained to the public, particularly where it is likely to affect them directly, uncertainty and mistrust may develop to the extent that success is put at risk. Departments should have clear communication strategies to explain to the public what a policy is about and what they can reasonably expect from it.
      7. Policies need to be implemented with sufficient flexibility to take advantage of opportunities to adopt new methods of delivery which meet client groups' needs more effectively. To do so departments should regularly consult frontline staff directly involved in delivering public services to determine if policies are operating as intended and how they might be improved.
      8. Departments should have the confidence to terminate policies rather than modify or refine them if the results of evaluations and other reviews suggest that a policy is no longer cost-effective or is not delivering its intended benefits.
      9. Decisions about whether policies need to be modified or terminated can only be made if departments have reliable and regular data on current performance particularly where policies have a direct impact on public services. Departments need to be sure that they have reliable monitoring information to assess progress and indicators to alert them to under-performance early enough to take remedial action.
      10. More evaluations of policies are needed so that departments can determine what works well in improving public services and what further practical steps are necessary to enhance service delivery and improve its effectiveness.


1   14th Report from the Committee of Public Accounts, The Millennium Dome (HC 516, Session 2001-02) Back

2   3rd Report from the Committee of Public Accounts, The Cancellation of the Benefits Payment Card Project (HC 358, Session 2001-02)  Back

3   34th Report from the Committee of Public Accounts, State Earnings-Related Pension Scheme: The Failure to Inform the Public About Reduced Pension Rights for Widows and Widowers (HC 401, Session 1999-2000)  Back

4   Cabinet Office, Professional Policy-Making for the Twenty-first Century, September 1999 Back

5   C&AG's Report, Modern Policy-Making: Ensuring Policies Deliver Value for Money (HC 289, Session 2001-02)  Back

6   42nd Report from the Committee of Public Accounts, The Management and Control of Hospital Acquired Infection in Acute NHS Trusts in England (HC 306, Session 1999-2000) Back

7   8th Report from the Committee of Public Accounts, Office of Gas and Electricity Markets: Giving Customers a Choice - The Introduction of Competition into the Domestic Gas Market (HC 171, Session 1999-2000) Back

8   64th Report from the Committee of Public Accounts, Countering Anti-competitive Behaviour in the Telecommunications Industry (HC 842, Session 1997-98) Back

9   1st Report from the Committee of Public Accounts, Inpatient admission, bed management and patient discharge in NHS acute hospitals (HC 135, Session 2000-01) Back

10   32nd Report from the Committee of Public Accounts, The Implementation of the National Probation Service Information Systems Strategy (HC 357, Session 2001-02)  Back

11   28th Report from the Committee of Public Accounts, Better Public Services through Joint Working (HC 471, Session 2001-02) Back

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Prepared 31 July 2002