Government’s central finance agency has revealed plans to replace existing processes in which it gathers information on departments’ costs and performance management via the provision of spreadsheets or paper documents
Chief secretary to the Treasury Darren Jones has set out plans for an overhaul of the government’s central finance system, aimed at improving the timeliness and accuracy of data shared by departments – boosting productivity in the process.
It will end the current system of departments tracking their own spending and performance, then sharing data with the Treasury via manual uploads in online spreadsheets and physical letters. In a speech at the Institute for Government, Jones said that at present the Treasury does not have real-time access to departments’ finance and performance-management data, and also cannot see departmental spending and its impact in real time.
He said that over the next three years the new approach to understanding, tracking, and evaluating spending across departments would be rolled out as part of the ongoing shared services programme across government.
The chief secretary added that knock-on advantages of the change would be that departments should have fewer key performance indicators to comply with and report on and “better levels of delegation”. He said giving HM Treasury direct access to departmental spending and performance data would save the considerable effort and interaction that the current system entailed, allowing departments to focus on their real work.
Jones said by 2028-29 the system should be integrated across departments. He said it would then be “business as usual” for ministers to be able to see in real time what programmes are over-spending, which projects are delivering, and how departments are performing against their budgets and objectives.
Jones told the IfG that the result would be improvements in the timeliness and accuracy of data insight that would boost financial and strategic decision-making at the heart of government.
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“These reforms will update our operating model and they will transform the digital and data architecture of public spending across government,” he said. “We’re building on existing work that’s taking place which is implementing shared ERP software; back-office functions basically – where the departments are already integrating some of those functions into the cloud through various groupings of departments. We will develop a single digital interface that sits over the top of these IT solutions, and will bring the data up into the centre of government to allow us to look at financial and performance data. We’ll then be able to use data analytics and AI to track trends, spot emerging challenges and share best practice in real time.”
He said the new system would allow Treasury officials and ministers to spot “points of failure that lead to excessive spending” at an earlier stage than is currently the case.
“Too often, and there are lots of examples, we only realise that something is going wrong and costing a lot when it’s a very large number,” he said. “We need to be able to spot those and deal with it much sooner in that process for the benefit of people who are relying on those services, but also for the benefit of taxpayers.”
Jones said the overhaul of the way spending is monitored and performance is tracked would be welcomed by finance professionals and departments.
“They’ve been looking for politicians to prioritise this niche-but-exciting opportunity for quite some time,” he said.
He added that the new real-time monitoring regime would also be an “important part” of improving public-sector productivity, which fell sharply during the Covid-19 pandemic and has failed to recover.
“It will give us the tools, the data and the insight to really be able to drive modernisation and productivity across the public sector so that we’re operating as a modern government fit for the 21st century,” he said.
