Download or read book Financing PFI projects in the credit crisis and the Treasury s response written by Great Britain: National Audit Office and published by The Stationery Office. This book was released on 2010-07-27 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: By setting up an Infrastructure Financing Unit, HM Treasury helped reactivate the lending market for private finance projects which was putting government PFI programmes in doubt as a result of the credit crisis. While the extra finance costs for projects in 2009 were value for money in the short term to stimulate the economy, the Treasury should not presume that continuing the use of private finance at current rates will be value for money. In line with policy on acting to stimulate the economy, the Treasury and other government departments gave priority to closing deals at the prevailing market rates, even if this meant the public sector paying more, and the banks carrying less risk. Analysis by the NAO suggests that higher financing costs increased the annual charge of PFI projects by six to seven per cent and that between £500 million to £1 billion of higher cost has been built in over 30 years, partly offset by an increased public sector share of refinancing gains. The NAO also considered whether reconsidering business cases would have improved value for money. The NAO found that this might have put policy objectives to give a boost to the economy at risk and would not have been a reasonable yardstick to assess the protection of value for money. The NAO recommends that there now be a thorough project by project review of the forward programme to apply more exacting and narrower criteria than applied to projects at the height of the crisis

Download or read book Financing PFI projects in the credit crisis and the Treasury s response written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and published by The Stationery Office. This book was released on 2010-12-09 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: The 2008 credit crisis had an enormous impact on the Government's public infrastructure programme. Severe restrictions on bank lending at that time meant no sizeable Private Finance Initiative (PFI) contracts could be let. This affected the viability of a large number of infrastructure projects, including school and road building schemes, with a total investment value of over £13 billion. The Treasury's response was to make project finance available by lending public money on the same terms as the banks. However the Treasury did not put pressure on government-supported banks to either make lending available or reduce the extent of increased financing costs. Overall, bank financing costs increased by 20-33 per cent compared to bank charges before the credit crisis. This added £1 billion to the contract price, payable over 30 years, for the 35 projects financed in 2009. Other alternatives to the high cost bank finance were not properly explored during the credit crisis. Greater use of Treasury loans, or direct grant funding, could have put pressure on banks to lower their charges. Neither did the Treasury adequately explore how lower cost finance sources such as life insurance and pension funds could be encouraged to invest more in PFI projects. The Treasury also could have made more use of funding from the European Investment Bank. The appropriate mix of financing sources for future project contracts, including public and private finance, is an issue that needs serious reconsideration.

Download or read book Department for Education written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and published by The Stationery Office. This book was released on 2012-05-11 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Department for Education is distributing £56.4 billion in 2011-12 to schools, local authorities and other public bodies for the delivery of education and children's services in England. The Department has set out how it intends to provide Parliament with assurance about the regularity, propriety and value for money in an Accountability System Statement (the Statement) of which the Committee has now seen three drafts. Responsibility for value for money is shared by the Department with schools, academy trusts, local authorities, the Young People's Learning Agency and the Department for Communities and Local Government. However, the Statement does not yet clearly describe the specific responsibilities of each body, how these will interact, or how the Department will assess value for money across the entire education system. The Department relies on local authorities and the YPLA to exercise financial oversight over local authority maintained schools and academies respectively. However, oversight by some local authorities is currently weak and could worsen as many authorities reduce the resources they devote to overseeing their schools. There are also concerns about whether the YPLA will have the right skills, systems and capacity to oversee the rapidly increasing numbers of academies expected in coming years. More consistent requirements for data and data returns must be applied to all schools so that academic and financial performance can be benchmarked, and all schools can be held accountable. The Department needs to enforce these requirements more stringently, particularly given previous problems with lack of compliance

Download or read book PFI in housing and hospitals written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and published by The Stationery Office. This book was released on 2011-01-18 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Department of Health and the Department for Communities and Local Government (the Departments) are responsible for sizeable portfolios of PFI projects covering hospitals and social housing. By April 2009 there were 76 operational PFI hospitals in England and over 13,000 homes had been built or refurbished through PFI. The letting of contracts and the responsibility for managing them is devolved to NHS Trusts and local authorities. The Departments are responsible for overseeing their PFI programmes and reporting to the public and Parliament on value for money. The Committee can find no clear and explicit justification and evaluation for the use of PFI in terms of its value for money. In many cases local authorities and Trusts chose the PFI route because the Departments offered no realistic funding alternative. Other concerns are central government's failure to use the market leverage that comes from overseeing multiple contracts, and the lack of robust central data to support effective programme management. It is clear that the implementation of PFI projects could be improved. Many PFI housing procurements have taken very much longer, and cost a great deal more, than originally planned. On hospitals, most are receiving the services expected at the point contracts were signed and are generally being well managed. There are, however, wide and unexplained variations in the cost of hospital support services, such as cleaning, catering and portering. Departments are not using their own buying power to leverage gains for the taxpayer.

Download or read book Ministry of Defence written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and published by The Stationery Office. This book was released on 2012-02-10 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Ministry of Defence (the Department) continues to struggle with managing its equipment programme on an affordable basis, resulting in the cancellation or deferral of major projects and a damaging impact on value for money. In 2010-11 the forecast costs to complete the 15 largest defence projects increased by £466 million. Since their original approvals the estimated costs of these 15 projects have increased by £6.1 billion and now stand at approximately £60 billion (an 11.4% increase). In aggregate these 15 projects are forecast to be completed 322 months later than originally planned. Projects approved since 2002 show significantly lower cost growth than those approved before this date, which is encouraging. Now the Department faces unpalatable decisions. Decisions to cancel or slow projects and to reduce equipment numbers have added significant long-term costs to the whole defence programme and to unit costs within the programme. Capability has been affected and this has all resulted in poor value for money. Large defence equipment projects have contributed disproportionately to overall cost growth. In the past, the Department has repeatedly failed to challenge unrealistically low estimates for the largest and most complex equipment projects from suppliers. The Department is still unable to set out openly the extent of the gap between income and expenditure it still faces, and how and by when any shortfall will be resolved. The report notes little progress in reducing the turnover of the Senior Responsible Owners (SROs), who oversee individual projects.

Download or read book HM Revenue Customs written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and published by The Stationery Office. This book was released on 2011-12-20 with total page 72 pages. Available in PDF, EPUB and Kindle. Book excerpt: HM Revenue & Customs faces a huge challenge to resolve long-standing problems with the administration of PAYE and tax credits while making substantial reductions to its running costs. The Department needs to stabilise its administration of PAYE following the problems encountered after a new processing system was introduced in 2009. It also needs to recover a significant amount of outstanding tax credit debt while minimising the amount of new debt being accumulated. While £900 million extra has been allocated to tackle tax avoidance, at the same time, following the 2010 Spending Review, the Department is required to reduce its running costs by £1.6 billion over the next four years. The Department has made progress in improving PAYE administration since the Committee's last examination of this area in 2010. However, as a consequence of the Department's handling of the 2009 transition to the new PAYE Service, it has had to forgo up to £1.2 billion of income tax underpaid from 2004-05 to 2009-10. Under current plans, it will take until 2013 before all processing backlogs are cleared and the new PAYE Service is operating as intended. The Department needs to focus on improving data quality in particular to sustain progress in PAYE administration. Without a clear plan for reducing tax credit debt, the level of uncollected debt will continue to rise to an estimated £7.4 billion by 2014-15. The Department has been forced to acknowledge that much of this debt will never be recovered from tax credit claimants, and recently wrote off some £1.1 billion of debt dating back to the introduction of the scheme.

Download or read book Rethinking Public Private Partnerships written by Carsten Greve and published by Routledge. This book was released on 2013-05-07 with total page 241 pages. Available in PDF, EPUB and Kindle. Book excerpt: The global financial crisis hit the world in a remarkable way in late 2008. Many governments and private sector organizations, who had considered Public-Private Partnerships (PPPs) to be their future, were forced to rethink their strategy in the wake of the crisis, as a lot of the available private funding upon which PPPs relied, was suddenly no longer available to the same extent. At the same time, governments and international organizations, like the European Union, were striving to make closer partnerships between the public sector and the private sector economy a hallmark for future policy initiatives. This book examines PPPs in the context of turbulent times following the global financial crisis (GFC). PPPs can come in many forms, and the book sets out to distinguish between the many alternative views of partnerships; a project, a policy, a symbol of the role of the private sector in a mixed economy, or a governance tool - all within a particular cultural and historical context. This book is about rethinking PPPs in the wake of the financial crisis and aims to give a clearer picture of the kind of conceptual frameworks that researchers might employ to now study PPPs. The crisis took much of the glamour out of PPPs, but theoretical advances have been made by researchers in a number of areas and this book examines selected new research approaches to the study of PPPs.

Download or read book Whole of government accounts 2009 10 written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and published by The Stationery Office. This book was released on 2012-02-07 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: In November 2011, HM Treasury published the first audited Whole of Government Accounts (WGA), covering the year 1 April 2009 to 31 March 2010 (HC 1601, ISBN 9780102975192). The Committee welcomes this major step forward in improving transparency and accountability and highlights some of the information it contains: at 31 March 2010 the government's public service pensions liability was around £1,132 billion; the present value of its future commitments under PFI schemes was £131.5 billion; the government wrote off £10.9 billion in unpaid taxes and expected to have to pay £15.7 billion for outstanding clinical negligence claims; cost of future nuclear decommissioning (£56.7 billion); the need for stronger accountability systems to secure effective responsibility for cost and value for money at local levels - academies, Free Schools, Foundation Trusts and GP consortia. But the WGA will only serve its purpose- showing what the government owns, owes, spends and receives - if it is timely and robust. The figures in the first audited WGA are too dated because Treasury took 20 months to prepare and publish the report. Treasury must address the issues that led the Comptroller and Auditor General to qualify his audit opinion on the WGA 2009-10. A key issue is Treasury's decision to deviate from accounting standards, by omitting Network Rail, the publicly owned banks, and various other government-controlled or owned bodies from the WGA. The Committee sets out a set of principles that future accounts should follow.

Download or read book The Impact of the 2007 08 Changes to Public Service Pensions written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and published by The Stationery Office. This book was released on 2011-05-26 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: In 2007-08, new pension schemes were introduced for civil servants, NHS staff and teachers, designed to make public service pensions affordable. The changes are likely to reduce costs to taxpayers of the pension schemes by £67 billion over 50 years, with costs stabilising at around 1% of Gross Domestic Product (GDP) or 2% of public expenditure. The Committee is concerned that the Treasury did not test the potential impact of changes in some of the key assumptions underpinning the long-term cost projections. In addition, the Treasury has not tested whether reducing the value of pensions would affect the public sector's ability to recruit and retain high quality staff. Three-fifths of the savings to the taxpayer were expected to come from the cost sharing and capping mechanism - a transfer, from employers to employees, of extra costs that arise if pensioners live longer than previously expected. Employees would potentially pay 70% more for their pensions over the next 50 years if life expectancy continues to increase more than expected. Implementation remains on hold while the Government decides how to respond to the Independent Public Service Pensions Commission (the Hutton Commission). Public service employees do not have a clear understanding of the value of their pensions because they are not provided with clear and intelligible information to enable them to make rational decisions. Further changes to public service pensions are expected as Hutton's recommendations are implemented, but this should bring a period of stability and certainty for long-term public service pensions policy.

Download or read book National Health Service landscape review written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and published by The Stationery Office. This book was released on 2011-04-27 with total page 76 pages. Available in PDF, EPUB and Kindle. Book excerpt: This report examines the value for money risks and implications of the Health and Social Care Bill. The Bill proposes a new model for the NHS focusing on patient outcomes. The proposals are intended to transform the NHS in England into a highly devolved, market-based model in which local commissioners and providers of health services are freed from central control, with an increased say for local authorities, patients and the public. Whilst the reforms could complement the imperative of achieving £20 billion efficiency gains by 2014/15, the reorganisation presents an additional challenge for the NHS. The health reforms are still at an early stage and key questions have yet to be addressed. It is vital that the Department creates robust accountability structures so that Parliament and the public can properly follow the taxpayers' pound and hold those responsible to account. The Committee is concerned that the Department has not yet developed a high quality risk management protocol for either the commissioning or providing bodies. The Department acknowledges that some health trusts and some GP practices have some way to go to achieve foundation trust status or become commissioning consortia. The Department must have effective systems in place to deal with failure so that whatever happens, the interests of both patients and taxpayers are protected. This report provides an overview of aspects of the reforms where Parliament requires clarification and draws out a number of risks associated with the transition to the new model that need to be managed.

Download or read book Spending reduction in the Foreign and Commonwealth Office written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and published by The Stationery Office. This book was released on 2011-09-30 with total page 68 pages. Available in PDF, EPUB and Kindle. Book excerpt: Around half of the Foreign and Commonwealth Office's budget is spent in foreign currencies. In 2008, the Treasury removed the protection it had previously provided to the Department against exchange rate fluctuations. The FCO did not have the expertise or experience to effectively manage the risk of a fall in exchange rates, and that the Treasury imposed poor value for money conditions on forward purchasing foreign currency. As a result of a decline in the value of sterling, in September 2009 the FCO faced an overspend of £91 million on its 2009-10 budget (£72 million centrally and £18.8 million overseas), out of its total budget of £1.6 billion. It made drastic cuts to reduce this overspend. The FCO did well to reduce spending so quickly, which enabled it to live within its budget. However, many of the spending cuts made were short term in nature, and involved simply delaying or stopping some activities, rather than making lasting efficiency improvements. Not enough was done to monitor and measure the impact of the cuts and there is a risk that such short term cuts can lead to increased spending in the future. The FCO needs to achieve sustainable reductions in running costs of £100 million over the next four years, and sees the overseas estate as a potential source of these efficiencies and income. But in the past, high charges have had the unintended consequence of discouraging other government departments from sharing premises.

Download or read book Office of Rail Regulation written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and published by The Stationery Office. This book was released on 2011-07-12 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Office of Rail Regulation (the Regulator) is the independent economic and safety regulator of the rail industry in England, Scotland and Wales. The Regulator's duties include promoting economy and efficiency in the rail industry with much of its work focusing on Network Rail, the owner and monopoly provider of the national rail network, including track, signalling and stations. Network Rail does not face normal commercial pressures from investors and lenders to improve efficiency as it is a not-for-dividend company without shareholders, financed by debt guaranteed by the Government. It is therefore the role of the Regulator to hold Network Rail to account for its performance and to incentivise it to become more efficient. The Regulator sets efficiency targets when it determines the limits on fees Network Rail can charge train operators for use of tracks, stations and depots. Sir Roy McNulty's recent review of the rail industry showed that the rail industry continued to fail to achieve effective value for money. The Committee states that the Regulator did not exert sufficient pressure on Network Rail to improve its efficiency, and that there is an absence of effective sanctions for under-performance in the system and should enforce a stronger link between performance and bonus payments to Network Rail's senior managers. The relationship between Network Rail, the Regulator and their advisors appears to the Committee to be too cosy. Network Rail should be more accountable for its use of public money, and more transparent in its operations. The Committee sets out 11 conclusions and recommendations.

Download or read book Reorganising central government bodies written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and published by The Stationery Office. This book was released on 2012-04-24 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: Under the Public Bodies Reform Programme the Government is reducing the number of its arm's length bodies from 904 to between 632 and 642 by the end of the current Spending Review period and will have a substantial and lasting impact. The Programme is intended to improve accountability for functions currently carried out at arm's length from Ministers. The Cabinet Office says it is on track to make £2.6 billion of administrative savings by 2015. However there are substantial reservations about the robustness of this claim. Key concerns are that: there is a risk departments are claiming savings which are actually cuts to services, when they should be including only genuine savings arising from administrative reorganisations; estimates of transition costs such as redundancy and pension costs are incomplete; the savings estimate does not fully take account of the ongoing costs to other parts of government of taking on functions being transferred from abolished bodies and some departments have wrongly included wider savings from bodies being retained, rather than just administrative savings from bodies being abolished or substantially reformed. The Cabinet Office has accepted that its savings estimate needs to be reassessed and has undertaken to 'rebase' it. Focus now needs to be on managing the Programme effectively. Departments have decided on the form of individual reorganisations themselves without clear direction from the centre, leading in some cases to inconsistent treatment of bodies with similar functions. Furthermore, departments may not be getting the best value for money from the sale or transfer of assets of bodies being abolished

Download or read book Department for Business Innovation and Skills written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and published by The Stationery Office. This book was released on 2012-03-23 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Department for Business, Innovation and Skills and the Skills Funding Agency provide funding for further education students aged 19-plus. The Department for Education and the Young People's Learning Agency fund further education for 16-to-18-year-olds. These two departments provided £7.7 billion in funding to the sector during the 2010/11 academic year. The various government bodies that interact with the sector have different funding, qualification and assurance systems. Differences in the information required and collected create an unnecessary burden for training providers and divert money away from learners. To provide value for money, the systems need to be appropriate, efficient, avoid unnecessary duplication, and balance the protections they provide for public money with the costs of the bureaucracy they impose. No one body is currently accountable for reducing bureaucracy in the further education sector. Instead, the two Departments and the two funding agencies maintain separate responsibilities based on their funding streams. BIS has a stated policy objective of reducing bureaucracy imposed on further education providers but would not accept overall responsibility for bringing together efforts to reduce bureaucracy in the sector. Both BIS and DfE, and their funding agencies, have launched separate initiatives designed to simplify the requirements they place on providers. However BIS does not manage the simplification as a programme with a clear and consistent goal. While BIS has required the Agency to reduce its own administrative costs by 33%, there is no rational view on the amount by which they would like to reduce bureaucracy in providers nor do they accept that measurement of progress is necessary.

Download or read book Oversight of special education for young people aged 16 25 written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and published by The Stationery Office. This book was released on 2012-02-24 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: Almost a third of young people with a Statement of special educational needs at the age of 16 are not in any form of education, employment or training two years later. The Government spent £640 million on special education for 16- to 25-year-olds in 2009-10, yet too many of these young people are falling through the gaps after they leave compulsory education, damaging their life chances and leaving a legacy of costs to the taxpayer. The system is extremely complex and difficult to navigate, with an array of different providers. Too many parents and young people are not given the information they need to make decisions about what is right for them. But three quarters of local authorities do not give parents any information at all about the respective performance of schools, FE colleges and specialist providers. The Department doesn't know how much money is actually spent on support. The huge variation between local authorities in funding per student suggests that a postcode lottery is at work. Students with higher-level needs are placed on the basis of statutory assessments of need; however, witnesses emphasised just how patchy the quality of these assessments can be. The opportunity for reform presented by the Department's recent Special Educational Needs Green Paper should be used to address our concerns It is right for local authorities to decide how to meet the needs of young people in their area - but local people must have access to clear information so that they can hold local authorities to account for how well they deliver

Download or read book Immigration written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and published by The Stationery Office. This book was released on 2011-05-17 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: This report focuses on how well the UK Border Agency has achieved its objectives of an efficient and effective system for managing migration of workers from outside the European Economic Area. The Agency implemented a Points Based System in 2008, which introduced three main routes for people to come to the UK to work, replacing the previous 39 types of work visa. The System incorporates a route for students to come to the UK to study, which is not considered in this report. The System works by awarding applicants points based on, for example, their skills, qualifications and salary and requiring them to meet a minimum points threshold. The System is objective, transparent and flexible, as the points required can be modified to respond to changing needs in the UK workforce. However the Agency has not been doing enough to protect resident workers and ensure that migrant workers and sponsoring employers comply with immigration rules. A lack of exit controls makes this more difficult. The Agency estimates there may be 181,000 migrants still in the UK whose permission to remain has expired since December 2008. The Points Based System is rule-based and requires applicants to supply specific documentation to support their applications. Applicants, however, have needed more help to understand the rules and the Agency has introduced a policy of 'evidential flexibility', allowing caseworkers to request additional information in support of applications, to prevent applications being rejected for easily corrected mistakes; however, this is not applied consistently. The Committee welcomes plans to introduce an integrated casework system which should provide the information necessary for dealing with these issues, and expect to see improved performance once the new casework system is fully operational from 2013.

Download or read book DFID written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and published by The Stationery Office. This book was released on 2012-02-03 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt: The DFiD's transfer programmes deliver cash, food and assets, such as livestock, directly to people living in poverty. Transfers can be used to tackle a range of issues, such as hunger and malnutrition, or access to health and education services, in a variety of contexts. In 2010-11 the Department spent £192 million on social protection programmes, which includes its transfer programmes. The evidence heard suggests transfer programmes are effective in targeting aid, and ensuring the money goes directly to the poorest and most vulnerable people. It is therefore surprising that the use of transfer programmes has not increased. The Department only plans to support transfer programmes in 17 of its 28 priority countries. It does not have an overall strategy for the use of transfers and its decisions on where to support transfer programmes look reactive. The decision as to whether or not to propose a transfer programme is taken by staff working in the country and it is not clear why there are extensive programmes in some countries and none in others. The Department does not collect data on all the costs of the transfer programmes it supports and the Department is therefore unable to say whether it is lifting more people out of poverty for every pound spent on transfers compared to other programmes. The Department's long-term objective is for the governments of recipient countries to take on the responsibility of owning and funding transfers as part of a sustainable social security system. However, the Department has not been clear about how individual programmes will be sustained