Office for Value for Money

Meg Hillier Excerpts

Monday 20th January 2025 Commons Chamber

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

It gives me great pleasure to make a statement on the first report of the Treasury Committee in this Parliament, and I again thank the House for giving me the honour of occupying this position. Our first report is on the new Office for Value for Money.

There will not be a single Member who does not believe in value for money for our constituents, who pay for Government services through hard-earned taxes that they give grudgingly to be spent well. As the Chancellor herself has been very clear, the taxpayer is not an automatic cash machine and every penny of taxpayer money needs to be spent as well as possible. The notion of value for money is one we would all support. We also need transparency, and that is a large part of the role of Select Committees: to shine a light on Government actions. This is our first public report shining a light on the work of the Treasury.

The Office for Value for Money is a short-lived, year-long body that is expected to have 20 staff, including secondees from the National Audit Office and the evaluation taskforce in the Cabinet Office. It is headed by a chair, who told us that it would conduct a small number of studies mainly on a cross-departmental basis to identify better value for money across Government. When we spoke to the chair in our hearing at the end of December, we found that although it was supposed to have 20 members of staff, it only had 12 and all were below director-general level, so not the most senior civil servants. That total of 12 and the ultimate total of 20 will include secondees.

It had not ruled out in December using external consultants to bolster the skills it will need to deliver on its work. It had not yet decided at the end of December into which areas it would launch studies, and nor had it set the parameters for evaluating its effectiveness. The Committee was clear that having a body with a name we would all agree with the principle of is not enough; we want to see such a body deliver for our constituents.

We highlighted in our report that there is a risk of duplication. There are already a large number of bodies across Government that deliver on value for money, scrutinise Government, and shine a light on how money is spent: the National Audit Office, which has nearly 1,000 staff in Newcastle and London; the evaluation taskforce in the Cabinet Office, which evaluates projects across Government to make sure they are properly delivering; the new National Infrastructure and Service Transformation Authority, which will be operational in the spring and brings together the previous Infrastructure and Projects Authority in a slightly different format.

There are also units in Departments that work to deliver on value for money in a range of areas, in particular the new arrangements for the Department for Science, Innovation and Technology, with its centre for digital transformation of public services. The Cabinet Office also has a readiness programme, based on regulations arising from the Procurement Act 2023, called “Transforming public procurement”.

There is also the rainbow of books. If we walk into the Treasury and ask questions about the green book, the teal book and the magenta book—and there are others—we will learn that is an important infrastructure for how it issues guidance. The green book appraises policies, programmes and projects. The teal book provides guidance on project delivery in Government, including managing projects, programmes and portfolios—that has been in an internal trial since July 2024. The magenta book provides Treasury guidance on what to consider when designing evaluation.

There are also a number of frameworks, including the Government efficiency framework and the public value framework. Datasets are also provided, including the priority outcomes and metrics first set out in the spending review of 2020. One of the most crucial elements in delivering value for money is that every Department has outcome delivery plans addressing the meat and drink of what is going on in Government. As Secretaries of State sit and plan what they might have to deliver in the spending review coming up in June, they will be poring over those outcome delivery plans as they do their departmental review; each Department will have its own review to look at where money is being spent and what projects are being delivered.

Overarching this there is “Managing public money”, which covers the approach of all permanent secretaries, who are the accounting officers and are therefore responsible for answering for how taxpayers’ money is spent through the accounting processes of Government. Their accounting officer assessments have to fit in with that regime.

We all want to see value for money, but this young body is one-year long and is not yet well established. The risk of duplication is high, and we need to ensure that it delivers something special and different, and crucially that nowhere in the Office for Value for Money will Ministers be playing a role. They will have a key role in delivering on the spending review, but in my experience of over a decade of scrutinising public spending, Ministers can make promises but they are not always well delivered, which can drive up public spending if we are not careful.

It is vitally important that this body delivers as set out, so we have asked the Treasury to explain in more precise detail what it expects the Office for Value for Money to deliver, how it will evaluate its success, and what it wants to see in the long term from this body chaired by David Goldstone. We wish this body well, but the Committee is clear that at the moment there are a number of areas of concern about whether it will actually deliver what it is set out to do.

[Dame Harriett Baldwin (West Worcestershire) (Con)]

I congratulate the hon. Lady not only on her excellent chairing of our Committee and this report, but on securing a slot in the Chamber to tell people about some of the report’s recommendations. Her background as the former Chair of the Public Accounts Committee gives huge credibility to the points she is making about the possibility that this new and temporary body will not be able to make its mark in the way the Government hoped. One of the areas where my constituency has benefited most in value for money from public spending is flood defences. With her long experience, does she agree that protecting our communities from the impact of climate change is one of the best uses of public money?

[Dame Meg Hillier]

The hon. Lady, the former Chair of the Treasury Committee—she still serves on the Committee—highlights a pertinent point. The chair of the Office for Value for Money said that it is not just about cash costs and that sometimes it might want to look at programmes that will save costs in the long run. However, that was still ill-defined, and we need to hear more detail, because that is the holy grail, really. If we can spend to save, that benefits our taxpayers in the long run in cash and, in the case of flooding in particular, it prevents something that is catastrophic for many communities.

[Madam Deputy Speaker (Judith Cummins)]

I call the shadow Minister.

[Richard Fuller (North Bedfordshire) (Con)]

I join others in thanking the hon. Lady and her Committee for producing this report. Given the increasing pressures on public expenditure since the Budget, the report is timely. The picture it paints is that the Office for Value for Money’s remit is vague, its personnel are limited, time is tight and other established groups are already in place, and there is therefore concern that its efforts may dissipate. It is clear that it cannot do everything. The Chief Secretary to the Treasury is here, and I understand that the chair of the Office for Value for Money was clear that there are a few areas he will be looking at. Does the Chair of the Committee agree that it would be of value for those areas of investigation to be made clear and public, so that we can more clearly monitor where their impact could be felt?

[Dame Meg Hillier]

The hon. Gentleman is saying what we said in the report. As a cross-party Select Committee of the House, we said that we need more detail about what will come. The chair of the Office for Value for Money was in front of us before Christmas, and we recognised that, given the body had only been established in October, he might not have all the answers, but we need those with dispatch, if this body is to be disbanded in October and is to contribute meaningfully to this spending review, although we recognise that would be challenging within the timeframe. If he is to lay down markers for genuine value for money and better spending by Government in the long term, we need precision. We have asked the Treasury for that, and hopefully it will respond to us in quick time—it has to respond to us, whether it wants to or not—with answers. We also need to evaluate the effectiveness in terms of whether, when the Office for Value for Money comes up with its studies and things, they will have to be taken on by the Treasury. We want to know the mechanisms for that and how the Treasury will prove to this House and taxpayers that the body has made a big difference.

[John Grady (Glasgow East) (Lab)]

Value for money in public spending is important to my constituents, who work hard for their money. In Scotland, under the Scottish National party, we have higher rates of income tax for anyone earning more than £29,000. The Government in Edinburgh and the UK Government that we have just finished with have indulged in some shocking wastes of money. Does my hon. Friend agree that it is essential for the Office for Value for Money to set out its suggestions for ways of securing value for money for future reference in both London and Edinburgh?

[Dame Meg Hillier]

My hon. Friend highlights an important point that I have mentioned already. Our constituents give the Government their hard-earned money in the belief and hope that they will spend it wisely. It is important that the Treasury is clear about what it expects to get out of the Office for Value for Money and, as a result of that work, thereby proves to the House, voters and taxpayers that it is getting better value than it would have done had the Office for Value for Money not existed.

[Chris Coghlan (Dorking and Horley) (LD)]

I congratulate the hon. Member on her excellent chairing of our Committee and on this excellent report. Given that the Office for Value for Money has only 20 staff and only 12 in post, whereas the NAO has 1,000, I share her concerns about whether it will be able to deliver value for money. What additional steps would she like to see taken to reassure the Committee that this body can offer value for money?

[Dame Meg Hillier]

It is important that we know what the Treasury is expecting from this body. I am sure that the hon. Gentleman, who was at our session, will agree that the chair was straightforward with the Committee about the limitations of a body of this nature, which is time-limited and whose few staff are not very senior. I am not in any way denigrating the staff, who no doubt are working hard, but we need to be clear about what we are getting from the headline of the Office for Value for Money, an organisation that is small and lean, and about what it adds to the work of other bodies. I listed only a few such bodies, not all of those that are in place across Whitehall.

[John Glen (Salisbury) (Con)]

I thank the hon. Lady for her skilful and professional chairing of the Select Committee. I think all Committee members were straining to find the substantive additionality of this body; I am not sure that we totally convinced ourselves of what that was. I very much welcome the fact that the Office for Value for Money is a time-limited unit within the Treasury. I also welcome the fact that the Office for Value for Money intends studies in specific high-risk areas of cross-departmental spending.

The role of Chief Secretary to the Treasury is not easy, and I am sure that the incumbent would say that it has been made far worse by all his predecessors. Does the hon. Lady agree that one area that bears scrutiny is the future of the UK Health Security Agency at Porton Down? In September 2015, the then Chancellor suggested that it should move to Harlow. In 2020, additional investment was needed at Porton in a national crisis, and there remains enduring uncertainty over where that investment should lie. That is a classic example of what this body should be capable of doing, which is evaluating where future investment should be in the national interest.

I am sure that the hon. Lady would echo my concern that the lack of specificity around those specific areas of focus creates ambiguity. Would she welcome more clarity on what that focus would be over the last six weeks?

[Dame Meg Hillier]

I thank the right hon. Gentleman, who is a fellow member of the Treasury Committee and a former Chief Secretary to the Treasury, for his question. We could have a whole debate about Porton Down and the animal health centre in Weybridge, where there was under-investment by his Government and challenges on his side, but we are not here to make party political points.

There are areas of under-investment, but the lack of specificity and the duplication issues are key concerns, as is reflected in our cross-party Treasury Committee report. There is a danger that unless this new body narrows its focus soon, it will not be able to deliver in time to aid the current Chief Secretary to the Treasury in his work of ensuring that Departments deliver on the spending review and come up with the proposals that provide the best value for money for the taxpayer. We need that clarity. The Government should welcome this report, because it gives them an opportunity to seek greater clarity from this body to aid the challenging spending review process.

[Sir Julian Lewis (New Forest East) (Con)]

It seems that the Chair of the Treasury Committee has come to the firm conclusion that the Office for Value for Money is itself not value for money. In carrying out her investigation of this body, which appears to have been set up only for a very limited period, she must have asked it what its terms of reference are, why it has been set up only for a limited period and what it is intended to achieve. My guess is that the answer has something to do with the ability to search just about anywhere across the spectrum for any project that causes concern. Did she get an answer of that sort? She must surely have got some sort of answer.

[Dame Meg Hillier]

I thank the right hon. Gentleman very much, although I should stress that it is not my evaluation but the Committee’s. We were unanimous in our concerns and unanimous in our desire to see taxpayers’ money spent well. We asked questions of the Office for Value for Money’s chair. Our report reflects the areas that he might consider looking at, especially areas in which there is great risk and areas of cross-departmental working.

There has been a move over the years to get more cross-departmental or joint departmental bids into the spending review, but that has not really got traction, because we have a terribly siloed culture in Whitehall. That is a big challenge, and the current Government—of my own party, of course—have the missions, which aim to bring things together. The chair said that he would be looking at some of that, but that is quite a lot to do in the timeframe available: the bids and cross-party working areas have to be identified, those Departments have to co-operate and the office needs the resource to look at where the issues are. With only 20 staff in total—there were only 12 when we had our hearing with the chair, but there are probably more now—that is a stiff ask. It would be helpful for Treasury Ministers to sit down with the Office for Value for Money and push it to come back with the exact areas that it proposes to look at and that will be most useful to the Government to deliver value for money.

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Lady for her statement and her answers. Speaking as an Ulster Scot, like many of us in this Chamber, it might be an exaggeration to say that every pound is a prisoner, but it is none the less telling of how thrifty we are. Ever mindful of that, I hope that the hon. Lady is aware of the issue of agency staff in the health service, whose costs are some 15% above those for an ordinary nurse’s pay. I have highlighted the matter directly to the Health Department on several occasions in this House. Will the hon. Lady and her Committee take it on board and investigate how permanent nurse jobs could be allocated? If we want value for money, a 15% saving must be worth that effort and that commitment.

[Dame Meg Hillier]

The hon. Gentleman tempts me to stray into the territory of the Chair of the Public Accounts Committee, the hon. Member for North Cotswolds (Sir Geoffrey Clifton-Brown)—this is exactly the territory that his Committee examines. We all know that agency staff cost more, whether that is for schools or for hospitals, and there is an issue with the pipeline of staff. I will stop there, because it is really not a matter for the Treasury Committee, or indeed for the Office for Value for Money: as the office is short-lived, it would not have the opportunity to look at something like that, as we heard from its chair. However, I am sure that the Chair of the Public Accounts Committee will be listening and will take the hon. Gentleman’s point on board.