Corporate report

HM Treasury Outcome Delivery Plan 2021 to 2022

Published 15 July 2021

Chancellor of the Exchequer

The Rt Hon Rishi Sunak MP

Permanent Secretary

Tom Scholar

Foreword from the Chancellor of the Exchequer and the Permanent Secretary

Over the past year, we have been immensely proud of how HM Treasury officials have consistently advised the Department’s Ministerial team to the highest standards, and delivered their priorities, in the face of one of the most complex operating landscapes any government has ever faced.

The COVID-19 pandemic response has shown HM Treasury at its best: delivering robust analysis and effective policy advice to Ministers; building its capability and expertise to tackle a global challenge in real time; and working nimbly to ensure the Department’s skills and people meet the government’s priorities as well as the country’s needs.

In the year ahead, HM Treasury will continue to develop its people, its expertise, and its technology to better meet the challenges and opportunities ahead. And we are determined that, through leading the development of the government’s new economic campus in Darlington, we will build a more diverse Treasury and provide new opportunities for talented people of all backgrounds to join the Civil Service.

We are looking forward to a pivotal year for HM Treasury, both domestically and internationally, including the finance tracks of the UK G7 Presidency and COP26. We are certain that the Department will embrace the changes and challenges ahead and go from strength to strength in serving citizens across the United Kingdom

The Rt Hon Rishi Sunak MP, Chancellor of the Exchequer

Tom Scholar, Permanent Secretary

A. Executive Summary

Vision and Mission

HM Treasury is the government’s economic and finance ministry, maintaining control over public spending, setting the direction of the UK’s economic policy and working to achieve strong and sustainable economic growth.

HM Treasury’s priority outcomes

This Outcome Delivery Plan sets out HM Treasury’s plans for the year 2021-22. This year HM Treasury has three overarching priority outcomes:

1. Place the public finances on a sustainable footing by controlling public spending and designing sustainable taxes

2. Level up the economy, by ensuring strong employment and increasing productivity across the regions and nations of the UK

3. Ensure the stability of the macro-economic environment and financial system

HM Treasury works across government, including by contributing to the following cross-cutting priority outcomes:

Cross-cutting priority outcome	Lead Department
Maximise employment across the country to aid economic recovery following COVID-19	Department for Work and Pensions
Address poverty through enabling progression into the workforce and increasing financial resilience	Department for Work and Pensions
Reduce UK greenhouse gas emissions to net zero by 2050	Department for Business, Energy & Industrial Strategy

Strategic Enablers

Alongside these priority outcomes, HM Treasury is committed to reinforcing the ambitions of the Declaration on Government Reform via its four Strategic Enablers:

1. Workforce, Skills and Location

2. Innovation, Technology and Data

3. Delivery, Evaluation and Collaboration

4. Sustainability

B. Introduction

1. Strategic objectives

HM Treasury is the government’s economics and finance ministry, maintaining control over public spending, setting the direction of the United Kingdom’s economic policy, and working to achieve strong and sustainable economic growth.

The Department has a broad remit, and its work touches the life of every UK citizen, covering public spending policy (including departmental spending, public sector pay and pensions, annually managed expenditure and welfare policy, and capital investment); financial services policy (including banking and financial services regulation, financial stability, and ensuring competitiveness); strategic oversight of the UK tax system (including direct, indirect, business, property, personal tax and corporation tax); and setting the conditions for sustainable growth, including through the decarbonisation of the economy.

Most recently, in response to the COVID-19 pandemic, HM Treasury has been at the heart of the government’s economic response, developing and implementing unprecedented policies to help millions of people, families and businesses weather the pandemic. In this performance year, the Department will continue to protect all regions and nations of the UK from the ongoing impacts of the pandemic; and will lead the nation’s economic recovery.

To do this, the Department is seeking to broaden and strengthen its skills base, and widen the experiences, diversity of thought and location of its workforce. Together with the Department for Business, Energy and Industrial Strategy; the Department for International Trade; the Ministry for Housing, Communities and Local Government; and the Office for National Statistics, the Department will establish a new economic campus in Darlington to recruit talented people outside London and the South East, supporting the wider Places for Growth target to move 22,000 civil servants out of London and the South East by 2030. Through this programme, the Department will expand its geographic diversity and diversify the range of talent and perspectives that contribute to effective policymaking.

The UK government is committed to implementing the United Nations Sustainable Development Goals. As the UK’s economic and finance ministry, each of HM Treasury’s three priority outcomes contribute to achievement of the following sustainable development goals:

• Goal 8: Decent Work and Economic Growth
• Goal 9: Industry, Innovation and Infrastructure
• Goal 16: Peace, Justice and Strong Institutions

In addition, the Department’s public spending responsibilities mean that HM Treasury indirectly contributes to the achievement of other Sustainable Development Goals through the policy work of other government departments.

2. Governance and delivery agencies

The Department has six Ministers. The Chancellor of the Exchequer, the Rt Hon Rishi Sunak MP, has overall responsibility for HM Treasury and its three priority outcomes. He is accountable to Parliament for all the policies, decisions and actions of the Department and its Arm’s Length Bodies. The Chancellor of the Exchequer is supported by his Ministerial team:

• The Chief Secretary to the Treasury: The Rt Hon Stephen Barclay MP
• The Financial Secretary to the Treasury: The Rt Hon Jesse Norman MP
• The Economic Secretary to the Treasury and City Minister: John Glen MP
• The Exchequer Secretary to the Treasury: Kemi Badenoch MP ^{[footnote 1]}
• Minister of State: Lord Agnew of Oulton DL ^{[footnote 2]}

In order to deliver its priority outcomes and organisational change, HM Treasury has a robust governance structure in place ensuring effective senior oversight of the Department’s work. Full and comprehensive details of HM Treasury’s governance structure, including Board membership and attendance, as well as the structure of the overall HM Treasury Group and its Arm’s Length Bodies and Special Purpose Vehicles, can be found in the Department’s Annual Report and Accounts.

3. Strategic risk

The Treasury faces a range of risks in its roles as the UK’s economics and finance ministry, as a central government department, and as an employer. The risks faced are diverse in nature and severity, and will sometimes be determined by external forces over which the Department may have influence but not control.

As the government’s economics and finance ministry, the Department must react to events in the global and UK economy, and ensure the sustainability of the public finances. As a central government Department and as an employer, HM Treasury must ensure its budget is allocated appropriately in order to meet its objectives, must act to ensure value for money, and must deliver on its duty of care to staff and others.

The Department has a sound system in place to consider the risks it faces, challenge underpinning assumptions, and set out mitigation strategies. This framework is set out in detail in HM Treasury’s Annual Report and Accounts.

4. Our finances

The 2020 Spending Review set the financial settlement for HM Treasury for 2021-22, which has been subsequently adjusted at the Main Supply Estimates 2021-22:

Departmental Expenditure Limit (DEL)	£287.8 million [footnote 3]
Resource DEL (including depreciation)	£279.5 million
Capital DEL	£8.3 million
Annually Managed Expenditure (AME)	£21,393.5 million

5. Our people

HM Treasury operates a flexible and dynamic approach to resourcing, whereby many staff work across multiple government priorities at once. This ensures that the Department is highly responsive and able to work at pace. It also means, however, that delineating staff according to priority outcome may not accurately capture the full picture of staff allocated to a project or programme at any given time, particularly once the interdependencies between much of HM Treasury’s work are accounted for.

In lieu of providing a breakdown of staff by the three priority outcomes in this plan, the table below shows HM Treasury staff in post across each Group in the Department as at 31 March 2021.

HM Treasury Groups	FTE [footnote 4]
Business and International Tax	149.3
Corporate Centre	233.9
Economics	94
Enterprise & Growth	227.5
Financial Services	175.2
Financial Stability	83.1
Fiscal	108.0
International	178.2
Ministerial & Communications	114.4
Office of Financial Sanctions Implementation	37.8
Office of Tax Simplification	7.4
Personal Tax, Welfare & Pensions 142.8
Public Services	156.9
Public Spending	171.0
Strategy, Planning & Budget	87.2
Total	1966.7

C. Priority Outcome Delivery Plans

Place the public finances on a sustainable footing by controlling public spending and designing sustainable taxes

Lead minister

The Rt Hon Rishi Sunak MP, Chancellor of the Exchequer

Senior Sponsors

Cat Little, Director General, Public Spending Beth Russell, Director General, Tax and Welfare Clare Lombardelli, Chief Economic Adviser

Outcome Strategy

At the core of this outcome lies the need to maintain a sustainable approach across public expenditure, revenue raising, and borrowing, underpinned by prudent debt and reserves management. The principal channels through which HM Treasury achieves this outcome are:

• efficient, well-run fiscal events and associated legislation, in support of the government’s economic and fiscal policy priorities

• ensuring value for money in public spending across government

• managing the overall balance between taxes, expenditure, and borrowing

• timely monitoring and analysis of tax receipts and spending

• efficient debt, cash and reserve management

In 2021-22, HM Treasury anticipates that this will involve the following, in particular:

• passage of the 2021 Finance Bill
• fiscal events, including the 2021 Spending Review

Our performance metrics

The performance metrics outlined below reflect those included in the Charter for Budget Responsibility 2016. The government intends to set out new fiscal rules later in the year, provided economic uncertainty recedes further.

Public Sector Net Borrowing (PSNB) as a percentage of GDP

This metric shows the difference between total public-sector receipts and expenditure on an accrued basis each year. As the widest measure of borrowing it is a key indicator of the fiscal position. PSNB is the headline measure of ‘the deficit’.

Source: Office for National Statistics / Release schedule: monthly

Public Sector Net Debt (PSND) as a percentage of GDP

This is a stock measure of the public sector’s net liability position, i.e. its liabilities minus its liquid assets. It is broadly the stock equivalent of public sector net borrowing but measured on a cash rather than an accrued basis. PSND is the key measure of the country’s overall debt.

Source: Office for National Statistics / Release schedule: monthly

Cyclically-Adjusted Net Borrowing as a percentage of GDP

Cyclically adjusted PSNB is a measure of the level of borrowing if the economy was operating at full capacity (e.g. adjusting for the current position in the economic cycle).

Source: Office for National Statistics / Release schedule: monthly

Outcome Evaluation Plan

HM Treasury officials provide clear, timely and comprehensive analysis of the consequences of economic and financial developments. HM Treasury also ensures challenge and scrutiny of its analysis, policymaking and delivery through a number of Boards and formal governance processes, including at the most senior official levels of the organisation and with Ministers.

Level up the economy, by ensuring strong employment and increasing productivity across the regions and nations of the UK

Lead minister

The Rt Hon Rishi Sunak MP, Chancellor of the Exchequer

Senior Sponsors

Katharine Braddick, Director General, Financial Services Philip Duffy, Director General, Productivity Cat Little, Director General, Public Spending Clare Lombardelli, Chief Economic Adviser Beth Russell, Director General, Tax and Welfare

Outcome Strategy

This outcome relates to HM Treasury’s long-term programme of policymaking to foster economic growth, support employment, improve productivity, and maintain competitive strengths throughout the UK. The principal channels through which HM Treasury achieves this outcome are:

• levelling up by facilitating delivery of new capital infrastructure across the UK

• supporting a green economic recovery from COVID-19, as well as the transition to net zero by 2050

• unlocking existing, and supporting new, private capital to level up and drive growth across the UK

• financial services sector regulatory reform to drive competition, support innovation and protect consumers across the UK

• policies, programmes and funding to support strong employment across the UK

• a trade and customs policy that drives private investment

• a tax and public spending framework that levels up through stimulating competition, private investment, entrepreneurialism, and innovation across the UK

• timely analysis to support policy decisions, informed by a rigorous assessment of wider economic conditions and their implications

• establishment of HMT’s new economic policymaking campus in Darlington, supporting levelling up by decentralising decision-making out of London

In 2021-22, HM Treasury anticipates that this will involve the following, in particular:

• establishment of the UK Infrastructure Bank
• ongoing delivery of the Levelling Up Fund and Towns Fund
• ongoing delivery of Project Speed Taskforce
• ongoing delivery of the Plan for Jobs
• ongoing delivery of the plan for growth
• passage of the Finance Bill 2021
• publication of the Net Zero Review final report
• delivery of the finance track of COP26
• fiscal events, including delivery of the 2021 Spending Review

Our performance metrics

UK and regional employment rates

National and regional employment rates show the number of people in paid work as a proportion of the population.

Source: Office for National Statistics / Release schedule: monthly

Business investment as a share of GDP

Business investment as a share of GDP affects the UK’s productivity and the long-term sustainable growth rate.

Source: Office for National Statistics / Release schedule: quarterly

Growth in output per hour

Growth in output per hour is the main indicator of productivity growth.

Source: Office for National Statistics / Release schedule: monthly

Economic performance of all Functional Economic Areas relative to their trend growth rates

This metric tracks the economic performance of a functional geography (i.e. larger than local authority, smaller than region – an economic hub and its surrounding commuter zone), and compares this to its economic performance over the long-term.

Source: Office for National Statistics / Release schedule: quarterly

Outcome Evaluation Plan

HM Treasury officials provide clear, timely and comprehensive analysis of the consequences of economic and financial developments. HM Treasury also ensures challenge and scrutiny of its analysis, policymaking and delivery through a number of Boards and formal governance processes, including at the most senior official levels of the organisation and with Ministers.

Ensure the stability of the macro-economic environment and financial system

Lead minister

The Rt Hon Rishi Sunak MP, Chancellor of the Exchequer

Senior Sponsors

Mark Bowman, Director General, International Finance Katharine Braddick, Director General, Financial Services Clare Lombardelli, Chief Economic Adviser

Outcome Strategy

HM Treasury’s management of the health of the UK domestic economy, financial stability, and its international partnerships is key to ensuring macroeconomic stability. The principal channels through which HM Treasury achieves this outcome are:

• effective management of the macro-economic framework, including to support the UK’s sustainable recovery from COVID-19
• timely monitoring and analysis of UK and international economic developments, and the UK’s fiscal position, to ensure the government is prepared for future economic and macro-financial developments
• working closely with the Bank of England and the Financial Conduct Authority to monitor risks to the financial system, and develop responses as appropriate
• supporting a stable global economy that upholds the UK’s interests in financial stability and openness
• promoting strong international institutions, and the health of the international financial architecture – including to support international cooperation on climate change, an essential complement to the UK’s own transition to net zero by 2050
• improving the UK’s response to economic crime and effective implementation of the UK and UN financial sanctions regimes
• financial services regulation and policy that ensures stability

In 2021-22, HM Treasury expects this will involve the following, in particular:

• delivery of the finance tracks of the UK G7 Presidency and COP26, including the Chancellor’s role as Chair of the G7 Finance Ministers
• enhancing the UK’s bilateral economic and financial relationships with systemically important international economies as well as relevant international institutions such as the G20 and Financial Stability Board.
• managing the UK’s shareholdings in the IMF and Multilateral Development Banks
• the IMF’s next Article IV Examination of the UK economy

Our performance metrics

Gross Domestic Product (GDP) growth

GDP shows the total value of all goods and services an economy produces. GDP growth is the main indicator of economic activity.

Source: Office for National Statistics / Release schedule: monthly

Consumer Price Index (CPI) inflation

The rate of inflation shows the average change in the prices of goods and services bought by households.

Source: Office for National Statistics / Release schedule: monthly

Aggregate capital ratio for the UK banking sector (using CET1 capital ratios)

The aggregate capital ratio is the percentage of the total capital held by the banking system to its risk-weighted assets. It is a measure of the loss absorbing capacity of the banking system and is an indicator of the resilience of the financial system.

Source: Bank of England / Release schedule: quarterly

Outcome Evaluation Plan

HM Treasury officials provide clear, timely and comprehensive analysis of the consequences of economic and financial developments. HM Treasury also ensures challenge and scrutiny of its analysis, policymaking and delivery through a number of Boards and formal governance processes, including at the most senior official levels of the organisation and with Ministers.

D. Strategic Enablers

To deliver its priority outcomes on behalf of UK citizens, and reinforce the ambitions of the Declaration on Government Reform, HM Treasury will implement four Strategic Enablers:

1. Workforce, skills and location

HM Treasury is committed to fair and transparent systems for development, progression and reward, regardless of the background of the Department’s staff. Data on the diversity of HM Treasury staff is published in the Department’s Annual Report and Accounts.

HM Treasury will continue to implement its talent and performance management systems to address staff development needs and reward performance in line with government and departmental priorities. The Department will establish our new economic campus in Darlington, together with the Department for Business, Energy and Industrial Strategy; the Department for International Trade; the Ministry for Housing, Communities and Local Government; and the Office for National Statistics. The campus will recruit talented people, including senior civil servants, outside London and the South East, supporting the wider Places for Growth target to move 22,000 civil servants out of London and the South East by 2030.

Staff engagement will be measured through the annual Civil Service People Survey:

HM Treasury People Survey engagement score results

Year	Engagement score
2020	76%
2019	74%
2018	75%

Source: Civil Service People Survey / Release schedule: annually

2. Innovation, technology and data

HM Treasury will explore how investment in enhanced data science tools, building on the Department’s existing analytical foundations, could improve the quality of policymaking. As the Department adapts to enhanced split-site working, it will invest in new collaboration tools, and support adoption across the business. In addition, the Department is committed to increasing innovation and challenge in policymaking by nurturing cognitive and intellectual diversity.

3. Delivery, evaluation and collaboration

HM Treasury is committed to enhancing its professional and functional expertise, particularly through the Department’s leadership of the Government Finance Function, and the Government Economics and Social Research profession.

HM Treasury is also committed to delivering effective business planning. This occurs via the Department’s delegated model, with Directors responsible for staffing their Group’s priorities within the budgets and resources available to them.

HM Treasury also provides transparent accountability through regular reporting, including to Parliament, and on gov.uk.

4. Sustainability

HM Treasury will practice environmental responsibility in its own operations, including through implementing the Greening Government Commitments. These commitments set out the actions UK government departments and their agencies will take to reduce their impacts on the environment. HM Treasury sets out its performance against these commitments in its Annual Report and Accounts.

E. Our equality objectives

HM Treasury is committed to fairness and, in particular, the promotion of equality of opportunity for all. Taking equality considerations into account in the Department’s work is an important and integral part of its approach as both an employer and a policy-maker. Most public sector organisations are required by the Equality Act to publish equalities objectives every four years. For the 2020-24 period, the Department has ten equality objectives, which are listed on the HM Treasury website.

1. Also the Parliamentary Under Secretary of State, Minister for Equalities, in the Government Equalities Office ↩

2. Joint Minister of State with the Cabinet Office ↩

3. In addition to this funding £39.4m will be held in reserve to accommodate HMT’s period of transition from the COVID pandemic (HMT can only access this funding after agreeing a Workforce Transition Plan). ↩

4. Based on active staff in post, which is a point in time estimate (as at end March 2021) of active staff, so does not include staff on e.g. paid leave. ↩