Treasury documents published alongside the fiscal exercise reveal plans to ensure that central bodies focus on overarching strategic risks, while departments are enabled to make more determinations of their own
The government has revealed plans to revamp the current spend controls system, with the aim of reducing complexity and providing departmental experts with greater autonomy.
Alongside this week’s Budget, government has also published the report of the Office for Value for Money (OVfM) – a short-lived unit within HM Treasury established last year to help asses public spending, before being closed, as intended, last month.
Its report sets out a range of recommendations, many of which have been accepted by government – including a call to reform the current frameworks of spending controls and project accountability mechanisms. A new version of these controls – including the rules guiding technology investments – will be developed and implemented by the end of the current fiscal year, the OVfM review indicates.
Now on their sixth iteration, the Digital and technology spend controls were first introduced in 2010. As of the current version – which is administered by the Government Digital Service – departments must undergo expert assessment and obtain approval for any planned spending of £100,000 or more on digital citizen services. All other spending on digital, data and technology in excess of £1m is also in scope of the controls, as is all investment in cryptography products, regardless of value.
More recent iterations of the framework have focused on a lighter-touch pipeline model in which agencies can, effectively, self-approve projects considered as ‘business-as-usual’ spending. The sixth incarnation, introduced last year, provides for an even greater level of “earned autonomy” for departments, although also added new guidelines concerning risk-management and wider strategic planning.
The OVfM report indicates that technology and other spending controls will be revamped with the aim of implementing a system “that achieves better outcomes for better value – driving value for money and enabling the public sector to deliver the government’s priorities efficiently”.
The amount of power that is concentrated in the centre of government – or, in the case of the tech controls, the digital centre – “has diluted accountability, weakening parliament’s ability to hold departmental secretaries of state and accounting officers responsible for the value for money of day-to-day decision-making”, the report says.
“It also limits the centre of government’s ability to ruthlessly focus on the biggest strategic and cross-cutting priorities of the day,” the document adds.
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The new controls will embody five principles, according to government, the first of which is that “decisions should be delegated to those closest to delivery, at the lowest appropriate level”. This will be accompanied by retained accountability to parliament and senior officials and ministers.
The second principle is that the centre of government should sharpen its focus on wider strategic goals and the biggest risks facing the state, while the third is that “functional expertise should be embedded in departments… with central functions focused on setting common standards and frameworks”.
The penultimate principle is that approval of spending “should typically be done once and done well, by those accountable for those decisions”. The final tenet is that “trust, openness and collaboration should be the foundation of cross-government relationships”.
While details of specific changes have not yet been finalised, the overhaul will involve “resetting controls and approval limits set by the centre of government”. The overall aim of the reforms will be to simplify the central system, while departments will also be asked to take steps “to streamline their own internal approval processes to speed up delivery”.
“The current system of spending control and accountability is guided by a complex set of rules and behaviours,” the report says. “This reflects both major reforms and incremental changes that have been made by successive governments over recent years, to address ministerial priorities or risks of the day. No system as complex as this one can remain fit for purpose forever, and periodic reviews are necessary to ensure the whole system is as efficient as possible.”
The document adds: “A reformed system will see the business of government become more efficient and effective by reducing the time and therefore cost of activities and increasing the speed of delivery. This ultimately means better and faster outcomes for citizens.”
Although the aim of the redesigned controls will be to provide greater decision-making power to teams across government, there will still be an expectation of “departments engaging openly and early with the centre of government on emerging risks to priorities, and the centre of government responding through timely, constructive, and strategic interventions rather than micro-management”.
The report says: “Where there are challenges, there will be a clear and predictable escalation mechanism, ensuring issues are addressed quickly and in a constructive way.”
Alongside the rules concerning digital investment – which are now run from the GDS-parent entity the Department for Science, Innovation and Technology – the Cabinet Office operates controls in seven other areas: commercial; advertising, marketing and communications; contingent labour; property; facilities management; redundancy and compensation; and learning and development.
Dedicated controls governing spending on consultancy and professional services were discontinued in 2023. These investments are now covered via the commercial controls – a move which meant that the threshold at which departments’ contracts with consultancy firms require any form of central approval moved from £600,000 up to £20m.
