‘It’s a wonder anything gets done’: UK government pledges to rewire Treasury to streamline financial reporting
The UK government has set out plans to overhaul how it uses data to measure performance as part of plans to improve efficiency.
Chief secretary to the Treasury, Darren Jones, said the plans to transform and upgrade the government’s central finance system would also help improve the timeliness and accuracy of data used to inform decision-making at the centre of government.
In a speech at the Institute for Government think-tank last month, Jones said the government needed to improve the performance data available in government to meet prime minister Keir Starmer’s objective to deliver more effective services.
“I am convinced that through investment and reform, we can deliver a more productive and agile state that delivers better outcomes for people and reduces the cost of running public services,” Jones said.
“That’s why as part of my wider reforms to public spending, HM Treasury will be using technology to analyse finance and performance data in real time and free up departments to focus on delivery instead of Treasury compliance reporting.”
Current systems ‘not ideal’
Jones said that the plan was inspired by the private sector and would make it easier for government to understand progress that is being made at a programme and project level.
To achieve this, he said the government would reform its central finance system by making it easier to share data across government. Currently government departments – which under the UK’s constitutional arrangements are autonomous, independent organisations that report directly to parliament – track their own spending and performance, and share data with the Treasury via manual uploads in online spreadsheets and physical letters.
Jones said this means the Treasury does not have real time access to finance and performance management data from across government, and cannot see in real time departmental spending and its impact.
This is something he realised upon joining government last year, when Labour won the election, Jones said.
“I had assumed that the Treasury acted a bit like a finance department in a kind of multinational organisation or a group, organisations with different lines of business or parts of the business that reported up to the Treasury.
“But what I’ve realised over the last few months is that actually the way our finance systems are designed means the relationship is a little bit more like a bank and its customer.
“So the Treasury, as the bank, has a load of customers, the departments in government, and it’s our job to anticipate their financing needs, to think about how we’re going to raise the money, to be able to give them the money, to request information from them about what they want to do, which we do via letterhead and Excel spreadsheets, and then use Word-based document advice notes to talk about what they’d like to do and how much it might cost. And in that process, we then attach conditions to the spending…. And then we check in and we see how the departments are getting on, how they’re spending that money, whether they’re spending it broadly in line with what we agreed.”
This approach means the information at the centre of government is both disaggregated and retrospective, Jones said, with “all of the finance, accounting and performance data sitting within the departments on their own IT systems, often structured in different ways”.
The government has worked on beginning to report data in a unified way, but it is “all essentially not very ideal”, he said. This led to the Treasury – and other central departments – applying compliance reporting on departments to provide assurance, to which departments then add their own performance metrics.
“And essentially you’ve then got this enormous list of KPIs [key performance indicators] that people are constantly manually reporting against the long side of the ring fences and the conditions and the compliance requirements. And quite frankly, it’s a wonder that anything gets done.”
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Improving performance data in government
To tackle this, the government will make better use of technology to share data – and was already doing so as part of the Spending Review process, which will make departmental spending allocations for the next three years on 11 June.
This will make it easier for officials, as well as improving transparency across government. “These reforms will update our operating model, and they will transform the digital and data architecture of public spending across government… and 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 management.”
This won’t change what Jones called “the constitutional basics”, with every department still accountable to parliament, but will provide a “shared, transparent evidence base where data flows in the way that it should, whether the centre of government has sites where departments can collaborate when they’re part of a system together, to have a more informed view about how their decisions affect each other and how ultimately that’s affecting people across the country”.
He concluded that this will give government “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”.
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