1.15 The lack of management information on public sector expenditure on back office operations makes it hard to identify what the costs of these operations actually are. What is not measured well will not be managed well. In the private sector, improved management information drives improved cost control. Therefore, the collection and reporting of data on back office operations in the public sector should be improved, with information available on a regular, consistent, auditable and transparent basis.
1.16 The five audit agencies' value for money indicators in HR, finance, procurement and estates management should be used by all public sector organisations.8 This management information should be fully integrated into organisational systems, with the cost of back office operations included in regular board and public reporting. This is not an onerous task. Many public sector organisations are already using these indicators. Those which have recently started using them confirm that it is quick and easy to do.
1.17 For central government, agencies and NDPBs, the Corporate Functions Board (CFB) will drive this process. Discussions should be taken forward between HM Treasury and the National Audit Office (NAO) on how the NAO could provide assurance on central government reporting against the indicators. For the wider public sector, the Audit Commission should encourage use of the indicators for all local public bodies within its scope. Paragraph 1.20 details other bodies with a similar role to play.
| Recommendation 1.1a: All public sector organisations employing more than 250 people must collect and publish data using the five audit agencies' approved value for money indicators for back office operations with effect from June 2009 for central departments, agencies and NDPBs and by December 2009 for the wider public sector. This information should form part of a department's regular management information and be included in its regular board and public reporting. It should be subject to external audit. |
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8 The full list of indicators and definitions can be found on the Public Audit Forum website: www.public-audit-forum.gov.uk