Great Britain: National Audit Office

Arm's Length Bodies (ALBs) are stand-alone, national organisations that are sponsored by the Department of Health to deliver specialised services and functions. ALBs range in size, but normally have boards, employ staff and publish accounts, and receive substantial funding from the Department. This National Audit Office report examines the allocation of resources and potential efficiencies that such bodies require. There are four categories of ALB: (i) Regulation of the healthcare system, e.g. Healthcare Commission; (ii) Establishing of national standards for healthcare, e.g. National Institute for Health and Clinical Excellence; (iii) Safety and public welfare, e.g. Health Protection Agency; (iv) Provision of central services to the NHS, e.g. NHS Litigation Authority. In 2003-04, there were 38 ALBs, employing some 25,000 staff and receiving £1.2 billion grant-in-aid funding. The NAO has set out a number of recommendations, including: to deliver efficiencies in ALBs, targets should focus on value for money defined in terms of total resources; Departments must be clear about what targets mean in practice and that any decisions to merge or reconfigure such bodies should be based on an Impact Assessment, identifying the costs and benefits of the change; Departments intending to deliver efficiencies through their ALBs, should map out their ALB sector and understand the individual circumstances of the particular ALB; Departments should also establish baseline performance and financial metrics; sponsors or other parts of the Department should not commission new work from ALBs without prior discussion with the central ALB finance team; after the conclusion of the ALB Review in 2008-09, good practice governance arrangements should be maintained, with appropriate assessment of the purpose and value for money of any new ALBs established.

the Department of Health's review of its arm's length bodies

Releasing resources to the frontline

The Administrative Burdens Reduction Programme seeks to improve the UK business environment by: ensuring that regulation is only used where necessary; simplifying and removing unnecessary regulations; and making sure EU law is not gold-plated. This is the first of an annual series of reports on the progress of the Programme. It sets out the context and rationale for the Programme; explains the measurement of administrative burdens and reduction targets; examines how are seeking to identify and deliver reductions; and considers how outcomes will be assessed. The focus is on the Better Regulation Executive, which has the role of coordinating the programme, and the four departments responsible for 75% of the total administrative burden.

the delivery of the administrative burdens reduction programme, 2007

Reducing the cost of complying with regulations

Anti-social behaviour encompasses a broad range of behaviours including nuisance behaviour, intimidation and vandalism. Seventeen per cent of the population perceive high levels of anti-social behaviour in their area, with the young and the less well off being disproportionately affected, at a cost to government agencies of responding to reports of anti-social behaviour in England and Wales of around £3.4 billion per year. This report examines the work of the Home Office's Anti-Social Behaviour Unit set up in 2003 and measures introduced by the Home Office since 1997 to tackle anti-social behaviour, focusing on the impact of three of the most commonly used interventions: warning letters, Acceptable Behaviour Contracts and Anti-Social Behaviour Orders. Using a sample of 893 cases, the report found that the majority of people who received one of these interventions did not re-engage in anti-social behaviour, but there were a number of perpetrators for whom interventions had limited impact, with about 20 per cent of the sample having received 55 per cent of the interventions issued. Recommendations include that the Home Office should undertake formal evaluation of the success of different interventions and the impact of combining these with support services at the local level. International research suggests that preventive programmes, such as education, counselling and training can be a cost effective way of addressing anti-social behaviour.

the Home Office

Tackling anti-social behaviour

Increases in expenditure on education for 16- to 18-year-olds, which now stands at £6 billion per year, have been matched by improvements in students' achievements and increasing participation of 16- to 18-year-olds in education. Nevertheless, the National Audit Office cannot conclude that value for money is being delivered across the system because of variation in the arrangements for accountability, performance monitoring and intervention where poor performance exists. Students achieve, on average, better academic progress and results in institutions educating large numbers of 16- to 18-year-olds, whether colleges or school sixth forms. Sixth-form colleges perform best on most measures of student achievement, despite currently receiving £280 per student less funding than school sixth forms. The Department for Education has taken steps to reduce inconsistency in how different provider types are funded and has committed to bringing the funding levels for school sixth forms into line with colleges by 2015. Although there are clear arrangements for dealing with poor performance in colleges, there is no consistent approach to dealing with poor performance in school sixth forms. In addition, the inspection frameworks and performance and financial reporting requirements for the various types of provider are not consistent. Many schools and colleges have improved their management of back-office costs through good practice in procurement. However, direct costs including teaching staff account for over 60 per cent of a provider's costs and some providers have a poor understanding of how to manage these costs

Department for Education

Getting value for money from the education of 16- to 18-year-olds

Colin Ross

Karen Taylor

Jess Hudson

For many years, stroke was viewed as an inevitable consequence of getting old. For stroke patients there seemed little to be done, except making them more comfortable.Things have begun to change, moving towards better treatment and care for stroke through specialist services and key interventions, such as stroke units, immediate scanning, thrombolysis and Early Supported Discharge.The publication of the NAO report 'Reducing Brain Damage: Faster Access to Better Stroke Care (HC 452)' in November 2005 highlighted how these developments can improve the efficiency and effectiveness of stroke care. As a result, the Department of Health is working to develop a comprehensive national stroke strategy, crossing prevention, urgent care, hospital care, community support and social care.This publication 'Joining Forces to Deliver Improved Stroke Care' sets out recommendations from expert project groups for a new national stroke care strategy, while also examining key messages and examples of good practice arising from the October 2006 'Joining Forces to Deliver Improved Stroke Care' conference hosted by the NAO

Joining forces to deliver improved stroke care

The National Audit Office has reported that the Department for Education has delivered a fundamental change in the nature of the Academies Programme through a rapid, ten-fold increase in the number of academies since May 2010. This increase is a significant achievement. However, the Department was unprepared for the scale of the financial implications arising from such a rapid expansion. In the two years between April 2010 and March 2012, the Department had to meet an estimated £1 billion of additional costs, while remaining within its overall spending limits.By September 2012, 2,309 academies had opened, compared with 203 in May 2010. This represents significant growth of 1,037 per cent, most of which has been from schools choosing to convert to academy status. Academies have greater financial freedoms than maintained schools and the Department's approach to approving applications - coupled with the fact that most converters to date have been outstanding and good schools - appears so far to have managed the risk of schools converting with underlying performance issues. However, more schools with lower Ofsted ratings are now applying to the Programme. Future applicants may therefore require more in-depth assessment and support to manage potential risks.

Department for Education and Education Funding Agency

Managing the Expansion of the Academies Programme

The Department of Health estimates that one in ten patients admitted to NHS hospitals will be unintentionally harmed (a rate similar to other developed countries), due to incidents such as an injury from a fall, medication errors, equipment related incidents, record documentation errors and hospital acquired infections. About half of such incidents could have been avoided, if lessons from previous incidents had been learned. This NAO report examines the progress being made in the NHS to improve the patient safety culture, to encourage incident reporting and to learn lessons for the future. The report finds that most trusts have developed a predominantly open and fair reporting culture at the local level, driven largely by the Department of Health's clinical governance initiative and more effective risk management systems. However, a 'blame culture' still exists in some trusts, and there have been delays in establishing an effective national reporting system. There is scope for improving strategies for sharing good practice and for monitoring that lessons are learned.

Learning to Improve Patient Safety; Department of Health

A Safer Place for Patients

Since it was set up in 1994, the Heritage Lottery Fund has awarded £3.8 billion of funding to some 24,000 projects. This report looks at how the money has been spent, what has been achieved, and the effectiveness of the grant-making process. It is based on a detailed review of 30 projects, a survey of applicants and interviews with staff. The conclusion is that the Fund has been successful in supporting projects that are helping to preserve the heritage of the UK. Although its robust processes have led to better and more sustainable projects, more should be done to reduce the burden on applicants, speed the delivery of projects, and provide more support for those who need it.

Heritage Lottery Fund

While arrangements for identifying and testing for risks to food safety are relatively mature and effective, similar arrangements for the authenticity of food are not. Government has failed to identify the possibility of adulteration of beef products with horsemeat despite indications of heightened risk. A split in responsibilities for food policy between the Food Standards Agency and two Whitehall departments in 2010 has led to confusion among stakeholders about the role of the Agency and Defra in responding to food authenticity incidents. Local authorities said they continue to be unclear on whom to contact in certain areas of food policy. Local authorities reported 1,380 cases of food fraud in 2012 - up by two-thirds since 2010. The Government recognizes that it needs to address weaknesses in its intelligence gathering and sharing and its understanding of opportunities for fraud throughout the modern food chain. Only one-third of English local authorities record laboratories' test results on the Agency's national database. The total number of food samples tested by official control laboratories in England has gone down by a quarter since 2009-10. Although a substantial amount of testing is carried out by private food businesses, public authorities do not know the amount, nature or results of these tests. Among the NAO's recommendations is that some resource should be shifted from such activities as the inspection of slaughter houses to the checking of the manufacture of processed meat products and the long supply chains involved, but this will require European agreement.

The Food Standards Agency, Department for Environment, Food & Rural Affairs, Department of Health

National Audit Office - The Food Standards Agency, Department for Environment, Food & Rural Aaffairs, Department of Health: Food Safety and Authenticity in the Preocessed Meat Supply Chain - HC 685

The report focuses on four joint targets included in the Department for International Development's (DFID) Public Service Agreement for 2003-06. These relate to: the Conflict Prevention target, the Debt Relief target, the Millennium Development Goals target, and the Trade Barriers target.

Joint Targets

Productivity in hospitals has been falling by around 1.4 per cent a year since 2000 whilst NHS expenditure has increased by over two thirds in ten years. The Department of Health has achieved significant improvements in such areas as waiting times, healthcare associated infection rates, patient outcomes, reduced cancer mortality and the patient experience. However, the NHS pay contracts introduced since 2003 have increased costs but are not always used effectively by hospitals to drive productivity improvements. The NHS needs to deliver between £15 billion and £20 billion of efficiency savings per year by 2013-14. Around 40 per cent of these savings are expected to come from increasing efficiency in hospitals, requiring productivity gains of approximately six per cent per annum. The 'Payment by Results' system of setting national tariffs has promoted some efficient practice, but there is still substantial variation between hospitals. If all hospitals performed at the level of the top 25 per cent in respect of staff costs, use of estate, control of emergency admissions and bed management, the NAO estimates that the NHS could save around £1.6 billion a year. The Department has launched a national initiative (QIPP) to help the NHS deliver annual savings of up to £20 billion. There are risks to the delivery of the initiative, which is the responsibility of Strategic Health Authorities and Primary Care Trusts, whose focus may be distracted by the proposals for their closure by 2013.

Department of Health

Management of NHS hospital productivity

This report looks at the management by the Defence Estates Agency, of the land and property owned by the Ministry of Defence. The estate is worth some £15.3 billion, and costs £1.3 billion to run, with the MoD as one of the largest landowners in the UK with land covering some 240,000 hectares. The Estate itself consists of such facilities as barracks, depots, aircraft hangers and naval bases, as well as training grounds and ranges. Also the MoD has direct managerial responsibility for 200 sites of special scientific interest, along with responsibility for over 1600 listed buildings and monuments. The NAO recognizes the operational challenges of managing such a large utility, but commends the MoD for developing a strategy that saw contractual arrangements deliver higher quality and estate rationalization, along with improved customer satisfaction. There had been a deterioration in the estate due to shortfalls in spending, and the use of traditional methods in the procuring and managing of estate services. The selling off of surplus land has earned the MoD £1.2 billion, and five new regional contracts have been signed to improve the estate. Insufficient funding due to conflicting defence priorities may hamper long-term efficiencies, and that there is more to be done to consolidate recent cultural changes in the organization of contracts for running the estate, especially the move towards large centrally-managed contracts.

Ministry of Defence

Managing the Defence Estate

The 2012 Budget, announced the 'ambition' to double the value of exports by 2020 to £1 trillion a year. However current performance has been flat over the last two years and, to meet the Government's ambition, exports will have to grow by 10 per cent year on year. Many factors which affect export performance are outside the control of the FCO and UKTI, such as exchange rates and political and economic changes overseas. While the UK outperforms Germany, France and Italy in the Gulf, it has not traditionally performed as well in many other emerging markets, such as Russia, Brazil, Turkey and China. Success here is essential if the Government is to meet its target. There is a joint UKTI-FCO Board to oversee coordination of their work overseas but currently there is no further joint accountability for planning, monitoring and delivery against their goal. Their initial responses to the government's objectives have not been sufficiently coordinated. UKTI is now increasingly looking to measure actual business outcomes rather than volume of activity. Among the NAO's recommendations is that the FCO improve how it measures and monitors the impact of its activities supporting exports so that it can demonstrate that its spending of some £420 million a year yields tangible results. UKTI is piloting the use of external business partners to provide some of its services, and needs to implement lessons from the evaluation of its pilot initiative to use external partners if it decides to roll it out

Foreign & Commonwealth Office and UK Trade & Investment

National Audit Office - Foreign & Commonwealth Office and UK Trade & Investment: Supporting UK Exporters - HC 732

This is a companion volume to the main report (HC 1520-I, ISBN 9780102976786)

appendices and project summary sheets, Ministry of Defence

The major projects report 2011

This report sets out the events surrounding the Ministry of Justice's process in 2013 to retender its electronic monitoring contracts, currently with private contractors G4S and Serco, and its subsequent decision to commission a forensic audit of the contracts by PricewaterhouseCoopers (PwC). The Department is in dispute with G4S and Serco over the amount of money by which the Department may have been overcharged for electronic monitoring services under the current contracts. Both contractors are also now subject to a criminal investigation by the Serious Fraud Office. The Department believes that both providers charged for work that had not taken place, in a way that was outside what was set out in the contracts for the electronic monitoring of offenders. PwC's estimate is that the potential overcharge may amount to tens of millions of pounds. The NAO's report includes examples of disputed billing practices which show that, in some instances, both contractors were charging the Department for monitoring fees for months or years after electronic monitoring activity had ceased; over similar timescales where electronic monitoring never occurred; and multiple times for the same individual if that person was subject to more than one electronic monitoring order concurrently. G4S has said that it intends to offer the Ministry £23.3 million in credit notes in respect of issues it has identified to date. Serco has stated that it will refund any amounts that it agrees represents overcharging. The Department has not currently agreed to any refund offers made by the providers.

Ministry of Justice

National Audit Office - Ministry of Justice: The Ministry of Justice's Electronic Monitoring Contracts - HC 737

Innovation in government requires departments to take well managed risks and to develop new ideas where more traditional ways of working are not able to deliver real change. This is a companion volume to the main report (HCP 1447-I, ISBN 0102942331), prepared by the Public Policy Group of the London School of Economics on behalf of the National Audit Office, which assesses the progress to date in developing innovative solutions to improving government productivity and effectiveness. This volume contains detailed findings from the research relating to the following headings: why innovation is important; the main types innovations nominated by departments and agencies; costs and timescales of innovations; key influences on origins and development of innovations; the main barriers to change and the impact of innovations.

Detailed Research Findings

Achieving Innovation in Central Government Organisations

The procurement of public ICT equipment is forecast to increase from £2.7 billion in 2005-06 to £4.1 billion by 2010-11 (an increase in volume from 1.7 to 2.6 million units). It is therefore important that public bodies understand how they can generate value from disposals, whilst being clear about their statutory and ethical responsibilities. However best practice in this area is unclear. This report is the first attempt to identify the potential for getting value from ICT disposal, whilst considering the wider environmental costs. One of the findings is that on average the public sector keeps equipment for just under 5 years old when disposal becomes a net cost. The commercial sector typically disposes of equipment after 3 years when there is still some residual value. If this had been done by public bodies the estimated saving in 2005-06 would have been £70 million.

Improving the disposal of public sector information, communication and technology equipment

The preparations for the 2012 Olympic and Paralympic Games are going well overall and, despite time pressures, the Olympic Delivery Authority remains on course to deliver its construction programme. Five of the 24 main projects being undertaken by the Olympic Delivery Authority have now been completed ready for handover, and on current projections, the remaining projects will be delivered on time, though timings on three projects are becoming tight. Progress with the complex operational planning required for Games time has also been strengthened since the NAO last reported. The overall cost to the public purse of security during the Games has increased from £600 million to £757 million. The final cost of the Games is inherently uncertain. While the responsibility for important areas of cost has been resolved, £498 million of new scope has been added and there is now less contingency available to manage risk. £974 million contingency in the Public Sector Funding Package remains. Risks have been reduced but there can be no guarantee that the remaining contingency will be sufficient to cover further unknown risks to the Game. Progress has also been made in firming up the finances of LOCOG but there are still concerns that if it does not break even, public funding will be required. The report calls for an estimate of the net benefits expected to accrue to the UK which can be directly attributed to the Games.

progress report, February 2011, Department for Culture, Media and Sport

Preparations for the London 2012 Olympic and Paralympic Games

Government has no overall coherent strategy for confiscation orders and this fundamentally undermines the process for confiscating assets. In 2012-13, 673,000 offenders were convicted of a crime, many of which had a financial element, yet only 6,400 confiscation orders were set. The annual amount of fraud perpetrated by criminals in England and Wales has been estimated by the National Fraud Authority as some £52 billion. On this basis, it has been further estimated that, out of every £100 generated by the criminal economy, £99.65 was kept by the perpetrators. Without the government knowing what constitutes the overall success of its policy, the bodies involved have no way of knowing which criminals or court cases should be prioritized for confiscation activity. Action was not taken early enough in many cases and this, together with out-of-date ICT systems, data errors and poor joint working, hampers the efficiency and effectiveness of enforcing confiscation orders. Throughout the criminal justice system, there is insufficient awareness of the proceeds of crime and its potential impact. Confiscation orders have a low profile within law enforcement agencies, with low awareness of financial legislation outside specialist teams. This results in many cases not being considered for confiscation. Owing to a lack of data and agreed success criteria, it is impossible to make meaningful cost-benefit assessments of the enforcement of different orders. Where confiscation orders are made and not paid, the main sanctions do not work. The Courts and Tribunals Service found that in 2012, only two per cent of offenders paid in full once the sentence was imposed.

Criminal Justice System

National Audit Office - Criminal Justice System: Confiscation Orders - HC 738

Financial support from the Government to the Sovereign was consolidated from 1 April 2012 into the Sovereign Grant and the existing Civil List reserve fund was transferred into a Sovereign Grant Reserve. The Sovereign Grant Act 2011 set the initial Grant for 2012-13 at £31 million. For subsequent years the level of the Grant is based on a percentage, initially 15 per cent, of the net income of the Crown Estates in the year two years prior to the funding year. Following this formula the Grant is set to rise to £36.1 million in 2013-14 and is likely to be £37.9 million in 2014-15. The Act also introduced new arrangements to strengthen the accountability and scrutiny of the Household for the spending on The Queen's official business. The Comptroller and Auditor General is the statutory auditor of the Sovereign Grant and Sovereign Grant Reserve accounts which are laid before Parliament. The first Annual Report and Accounts for the Sovereign Grant and Reserve Fund, covering 2012-13, were published on 27 June 2013 (HC 212, session 2013-14, ISBN 9780102984248), and form the basis of this memorandum. The memorandum for the Public Accounts Committee sets out: the changes to the Household's funding arrangements and the introduction of the Sovereign Grant; the calculation of the Sovereign Grant, the Reserve Fund and the impact on the Household's management of its finances; the Household's financial management of the Sovereign Grant.

Great Britain: National Audit Office

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