3.24 Government must seek to eradicate poor performance across all of its projects, but the government's major projects portfolio does not contain major local government projects. When the Authority was created, its scope was limited to looking at projects initiated by central government departments. Projects that are under the sole control of local authorities, such as building schools or housing, are not reported or assured by the Authority, regardless of their size20 or risk.
3.25 The total cost of major capital projects is only a small part of total government spending, but the Authority does not assure 'business as usual' spending - programmes that require relatively little initial capital outlay, but with large ongoing revenue implications. Applying independent assurance to 'business as usual' spending, such as the letting of contracts to provide a service over a number of years or the distribution of grants, can help reduce the risk to value for money.
3.26 There are other types of initiatives which may have little or no direct economic impact on government, but large impacts on industry and consumers, and which are also not covered under current central assurance arrangements. For example, the Department of Energy and Climate Change monitors the delivery of a number of policy measures that the Authority does not, including via a control framework for levy-funded spending.21 These policy measures include the 'Renewables Obligation' which is predicted to have £42 billion of economic impact on industry and consumers.
3.27 However, given the constraints under which it is operating, the Authority does not have enough resources to accommodate an increase in the size of the portfolio to include such projects. Ambitions for the Authority to play a wider role in providing assurance and increasing government's return on all its projects cannot be delivered without more resources. If there was more information on the system's impact on project outcomes, the Cabinet Office and HM Treasury would be better placed to assess the optimal scale of the Authority's operations.
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20 Local authority capital spending in England totalled £23.1 billion in 2010-11. Available at www.communities.gov.uk/documents/statistics/pdf/20132511.pdf
21 HM Treasury, Control framework for DECC levy-funded spending, available at http://hm-treasury.gov.uk/psr_controlframework_decc.htm