The government is “not just a bunch of accountants trying to turn around the British economy as if it were a failing company”, the Prime Minister said earlier this month.

However today, a new report ‘Improving decision making in Whitehall – effective use of management information’ shows better use of accountancy principles at the top of Whitehall would be a good thing.

The Institute for Government, Chartered Institute of Management Accountants and Deloitte point out how government and the taxpayer could benefit if Whitehall used better management information (MI) to improve public spending decisions. Minister for the Cabinet Office, Francis Maude, is responding to the report this evening at the Institute for Government.

“Following the financial crisis, the Government faces increasingly stark choices on how to manage its resources functions, services and operations more effectively. To make informed decisions, keep a check on value for money and assess risks, government needs accurate management information,” the report says.

The lack of such a fundamental business tool in Whitehall is striking to those from a commercial background such as Lord Browne, the government’s lead non-executive, who has pointed to the weakness of Whitehall in producing MI.

Select committees and ministers have openly questioned whether government has the right data to make informed decisions about its functions.
The report looks at six case studies which demonstrated that Whitehall is perfectly capable of using complex information however a lack of demand for it in Whitehall, was holding back progress. Unlike businesses that use MI systematically to drive decision-making, Whitehall uses MI sporadically. There is still too much of a focus on new policy initiatives rather than driving value for money through the £700bn government spend. A continual focus on value for money across all departments must be a priority, the report says.

Director of Research at the Institute for Government Julian McCrae said:
“The government has always had an obligation to provide value for money for the taxpayer and the next spending review will be as tough as the last. Given the challenges ahead, there is no time to waste in unlocking systematic improvements in Whitehall’s use of management information. Finance Directors and Permanent Secretaries, with the encouragement of the new non-executive directors, have a vital role to play in making the cases of good practice we have seen become part of everyday Whitehall business.”

Charles Tilley, FCMA, CGMA, Chief Executive of the Chartered Institute of Management Accountants said:
“Put bluntly, many government decisions appear to based upon a hunch and not evidence based with a clear focus on shaping policy around what can be delivered, and at what cost.  We need quality management information which can be translated into practical tools to enable effective decision making.  All of this needs to be couched in a framework of an overall government strategy.  Government must build upon its pockets of best practice so that a culture of quality information and analysis becomes the norm right across Whitehall.”

Mike Turley, Public Sector Industry Leader at Deloitte said:
“Improving the use of management information and data will be crucial to reforming services and bringing down costs across the public sector in a sustainable way. There is a large volume of data held across central and local government and better understanding of it can drive improvements in efficiency and evidence-based decision-making. However, a cultural change is needed across the public sector to improve the collection and analysis of information.”

The six case studies are examples of where MI has been developed and used to make better decisions. Based on these case studies the report makes three core recommendations to address the barriers and endorses a  more systematic approach to the use of MI in Whitehall.

Problem 1:
The lack of a senior civil servant formerly responsible for timely accurate management information in Whitehall.
Proposal: Make Finance Directors General responsible for developing MI

Problem 2:
Low level of demand for management information.
Proposal: departmental non-executive board members can help create this demand – collectively NEDs have stated they want weaknesses in management information addressed within next financial year.

Problem 3:
Demand for management information comes relatively low down the list of priorities compared to new policy development.
Proposal: The report recommends creating a new priority on continuously improving value for money – permanent secretaries in Whitehall would need to be more transparently responsible for the way their departments use MI to drive their business.

Taken together, these proposals make it more likely that Whitehall can respond to continued austerity with greater efficiency rather than just cutting services to the public. The report also shows what drives better management information use in Whitehall with a list of the 6 key insights.