A deeply concerning report out this week from MPs on the cross-party Public Accounts Committee has found that the British Government has little to no idea how effective the money it spends on major projects is - to the tune of hundreds of billions of pounds.
The reasons for this are multi-faceted, some of which are complex and hard to solve. But it’s also true that the government has certain levers at its disposal to better evaluate its spending, which it has not taken advantage of, despite repeated attempts to encourage it to do so.
The report notes that in December 2019 the Prime Minister’s Implementation Unit found that only 8% of Government’s £432 billion spending on major projects had robust impact evaluation plans in place, and 64% of that - £276 billion of taxpayers’ money - had no evaluation at all.
Without transparency into the effectiveness of spending, future decision making on key government policy is essentially guesswork. This may be helpful for governments playing party politics, adopting positions that suit certain narratives, but it’s a disastrous position to be in if we want functioning administrations that can implement ideas that actually work.
For too long successive governments have come up with ‘big ideas’, spent billions of pounds, and then had to apologize down the line because value has not been delivered.
Chair of the Public Accounts Committee, Dame Meg Hillier MP, pointed to the current government’s latest plan to ship asylum seekers to Rwanda for ‘processing’. Critics have said that the plan is both inhumane and ultimately more costly than handling asylum cases in the UK itself. Hillier said:
Government spends hundreds of billions of pounds of taxpayers’ money on major projects with no evidence what is working or idea what to do when it isn’t.
The Home Office describes its Rwanda refugee policy as ‘experimental and novel’ - so much that the Permanent Secretary sought a direction from the Minister to spend the money required, because it could not be shown that the programme will deliver its objectives with value for taxpayers’ money. Now we are told that the terms of the agreement with the Rwandan government may trump transparency to the UK taxpayer.
That is absolutely unacceptable. Facing intertwined crises in our environment, energy supply and cost-of-living, every penny counts. Government must show its cards and prove it is delivering, and stop a programme quickly when it doesn't deliver - not gamble away taxpayers’ money.
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A failure to understand the effectiveness of money spent means a failure to make evidence-based decisions on future projects. Evaluating work helps to prioritise spending, but can also inform effective ways of working down the line. Not doing so is simply throwing money at the wall and hoping something sticks - taxpayers’ money.
So, what is the government not doing that it should be? Well, there are a number of things - some are structural that are harder to fix, others that appear to simply be a choice.
The Committee report states that there needs to be a cultural change so that the evaluation system is integrated not all stages of government activity: planning, implementation and understanding the impact afterwards. The Implementation Unit has said that departments found it hard to embed a culture of open enquiry. This was highlighted in a 2013 NAO report, which cited a lack of political engagement and a lack of incentives for departments.
In other words, if you don’t know if your policy and spending choices have been effective, then you are less likely to have to justify any poor choices made.
Equally, the Treasury is not making full use of the spending levers it has at its disposal to deliver what the Committee calls a “step change in the use of evaluation across government”. An Evaluation Task Force has been created and the 2020 and 2021 Spending Reviews emphasised Evaluation, but the Committee expressed its disappointment that the Treasury did not make use of its authority until recently, despite receiving recommendations to do so since 2013.
The Treasury can withdraw funding or reduce a department’s delegated authority limit if there is non-compliance with evaluation requirements, but it has not set up formal and standardized ways of tracking all spending review conditions across departments, including those related to evaluation.
Departments are also not meeting government requirements on publishing evaluation plans and findings, and on transparency of models and their outputs. The Committee notes that transparency is critical for the public to understand the evidence behind decisions and how money is being spent, but Ministers have the final say on whether evaluations should be published. And it seems that some parts of government do not want their evaluations known.
In addition to the above, the report out this week (once again) highlights that good quality modelling and evaluation is hampered by challenges in sharing data and a lack of common data standards. This is one of the more structural problems that is harder to solve, but there has been renewed effort via the government’s National Data Strategy to embed good data practices across Whitehall.
The Committee states:
Government does not always see data as a priority and data quality is often inadequate. We have drawn attention to poor data and a lack of joined up systems in numerous reports over the years, such as on supporting the vulnerable during lockdown, on tackling the tax gap, on effective regulation of gambling, on dealing with rough sleepers, and on identifying and tackling fraud and error.
When producing and using models, poor data can lead to additional time and increased difficulty when quality assuring the model inputs. This difficulty is compounded by a lack of data standards across government which means there are inconsistent ways of recording the same information. When dealing with new situations, such as the rapidly changing pandemic, Government needs to be fast and agile at sharing data.
I’m not going to say that this stuff isn’t hard. Being a data driven organization requires not only comprehensive systems and standards to be in place, but also requires a willingness to admit when things are going wrong and change course. The latter part is not something that works particularly well in the current political environment, when dogmatic viewpoints are what attracts attention. It’s easier to operate blindly, knowing that in 5 years time when new projects are live, it will likely be someone else taking the fall. But this does a disservice to the taxpayer and it shouldn’t be how an effective administration operates.