Since the COVID-19 pandemic began, the NAO’s role has been to provide Parliament and the public with evidence-based reports on how public money has been used to tackle the crisis. So far we have published 12 reports on different elements of the pandemic response, including for example the test and trace programme; the procurement of PPE and ventilators; the furlough scheme; and loans to businesses. All of our COVID-19 work is on our website, along with details of the pipeline of COVID-19 work in progress, due for publication in 2021.
Our work so far has highlighted the challenge faced by government of responding effectively to an unprecedented public health and economic emergency whilst maintaining control over how (and how well) public money is spent. Our reports show how the trade-off between speed, effectiveness, cost and control has been managed in the different elements of the COVID-19 response and provide important learning for the rest of this pandemic and any future public health emergencies. The Public Accounts Committee has held public sessions on each of the topics covered by our COVID-19 reports, taking evidence from the officials responsible and issuing its own reports.
To support transparency and the effective scrutiny of government spending, we are continuing to update our COVID-19 cost tracker, with the latest update made on 29 January 2021. As well as providing the latest estimate of the cost of every significant government commitment as part of its pandemic response, the tracker shows spend to date where that is available. It also allows the data to be downloaded and analysed by type of support, department responsible and date of commitment.
Although the pandemic has rightly required significant audit attention, our work programme has also covered other important areas of public spending. In November, we reported on the state of preparations at the UK border for the end of the EU Exit transition period on 31 December 2020. We will follow up how the new border arrangements are working in practice later this year.
In December, our first report on the government’s progress in meeting its commitment to a net zero carbon economy by 2050 looked at the governance and management arrangements being put in place to deliver this big shift in how we generate power, heat our homes, use our land and travel. We are following up with audits of specific elements of the net zero strategy, such as government’s role in encouraging the transition to ultra-low emission cars.
COVID-19 has also impacted the NAO’s other major area of work, the audit of government department and arm’s-length body accounts. Finance and audit teams alike adjusted well to fully remote accounts preparation and audit for the 2019-20 annual reports and accounts. Overall, audits took longer to complete, partly due to the logistical impact of lockdown but also because of the impact of the pandemic on 31 March 2020 asset and liability valuations and on the going concern status of organisations facing significant loss of income. I had to include ‘emphasis of matter’ paragraphs in 84 of my audit reports, drawing attention to significant uncertainty in these areas.
Looking ahead, government’s 2020-21 accounts present significant accounting and audit challenges. For the departments in the front line of the pandemic response, they must account for tens of billions of unplanned spending during the year, often in risky control environments. Our audits will assess the robustness of the estimates and judgements made by departments in accounting for this spending.
As well as responding to the pandemic in the last year, we have also been making progress on the new strategic priorities we set for the NAO for the five years 2020 to 2025. This is already visible in our new series of lessons learned reports, bringing together good practice, warning signs and tips for success on important areas of public spending. The first in this series, Lessons learned from major programmes, was published in November. As part of our focus on audit quality, we’ve also embarked on an overhaul of our audit methodology and the procurement of a new audit software platform, which will incorporate powerful new data analytics.
All of this work has only been possible thanks to the commitment and professionalism of my colleagues who, like so many others, have continued to deliver our work programmes whilst managing the impact of lockdowns, home schooling and other pressures. We’re conscious that others, notably healthcare and other front line workers, are handling much greater challenges. That thought focuses us on helping government to extract as much learning as possible from this experience so that the country is prepared for any future emergency of this kind.
Gareth Davies
Comptroller & Auditor General
Author
Gareth Davies
Gareth Davies was appointed C&AG in June 2019. Before his appointment as C&AG, he was Head of Public Services at Mazars, a global accountancy firm specialising in audit, tax and advisory services. Prior to this, he was Managing Director of the Audit Commission’s Audit Practice. His experience spans financial and value for money audit, organisational leadership and board governance.
Gareth is a Fellow of the Chartered Institute of Public Finance and Accountancy and a Fellow of the Institute of Chartered Accountants in England and Wales. He is a non-executive Board member of the INTOSAI Development Initiative (IDI) which supports Supreme Audit Institutions in developing countries to sustainably enhance their performance and capacity.
