Correspondence

Letter from Chief Secretary to the Treasury to Chair of the Public Accounts Committee

Published 26 November 2025

Sir Geoffrey Clifton-Brown MP
Chair, Public Accounts Committee
House of Commons
London
SW1A 0AA

26 November 2025

Dear Sir Geoffrey,

REFORMS TO THE PUBLIC SPENDING CONTROL AND ACCOUNTABILITY FRAMEWORK

Alongside Budget today, we have announced important reforms to the public spending control and accountability framework. The Office for Value for Money (OVfM), working with others in HM Treasury, the Cabinet Office and across government reviewed the current system and recommended reforms which I accepted. These are set out in a report published today, Reforming the spending control and accountability framework, a copy of which is attached.

The fundamental objective of reforming the current system is to create a framework that speeds up decision-making, drives better value for money, and enables the public sector to deliver the government’s priorities efficiently. The OVfM’s review revealed significant scope to remove duplication of controls and strengthen accountability to deliver more effective and efficient spending control, while freeing up capacity to focus on delivery of citizens’ priorities.

The reforms announced today include:

• HM Treasury will agree bespoke memoranda of understanding (MOUs) with departments on new ways of working and increase delegated authority limits (DALs) for the majority of departments for financial year 2026-27. HM Treasury will publish the new DALs for 2026-27.
• DALs for smaller areas of spend, which currently vary widely, will be simplified and in many cases this spend will be entirely delegated to departments.
• The spending controls operated by the Cabinet Office and the Department for Science, Innovation and Technology will be reformed. For spending above new delegated limits there will be a multi-disciplinary single approval point within HM Treasury. Advice to me on spending approvals will be informed by central functional expertise where appropriate. For spending below delegated limits, departments will be responsible for drawing on appropriate functional expertise from either within their department or from the central function. The intention is therefore to move to a single delegated limit for HM Treasury and Cabinet Office controls, aligned to a department’s main DALs. However, given the importance of ensuring co-ordination on government communications, specific arrangements for the advertising, marketing and communications control will be detailed before the start of the next financial year.
• The size of the Government Major Project Portfolio (GMPP) will be significantly reduced from over 200 projects to 80-100 projects, to allow for a more focused approach to the provision of enhanced oversight and specialist support from the National Infrastructure and Service Transformation Authority. This will be accompanied by changes to improve delivery for GMPP projects such as streamlined approvals, feasibility studies, and limited budget flexibilities on a case-by-case basis, as well as improvements to the overall data strategy and ongoing work across the Government Project Delivery Profession and Function to underpin improvements across the portfolio as a whole.

Together, these reforms will ensure approval processes do not impede the speed of delivery of the government’s objectives. Rather than duplicating processes already taking place within departments, the centre of government will be freed up to focus on oversight of the biggest risks and priorities. The reforms will enable the central functions to focus on setting consistent functional standards and strategies; providing support on the biggest and most complex issues early; building capability across government to deliver high-quality, evidence-based business cases and decision-making in departments; and dealing with issues that are best done once on behalf of the whole of government.

The new, bespoke MOUs between HM Treasury and departments will set out clear expectations about ways of working and how early engagement and openness to challenge will operate in practice. These will include transparency around data and developing a shared assessment of capability, and a willingness to proactively and constructively address any capability gaps that are identified. Departments will also need to streamline their own internal approval processes and could, for example, choose to draw on the expertise of their independent non-executive directors in doing so. If there are cases of poor performance or of departments not meeting their enhanced obligations, HM Treasury will retain a range of measures to incentivise improvement including the reintroduction of controls where necessary.

Implementing these reforms is a whole-of-government endeavour. They will be implemented in a phased way, with an expectation that the rules and guidance will be updated at the start of the 2026-27 financial year, with some reforms implemented earlier where possible. The government will work with other organisations with ambitions to improve financial management in government, including the National Audit Office (NAO), to support departments to improve their processes and capability.

Departments will continue to report transparently to Parliament and in places report more information than now. In Spring 2026, departments will publish the outcomes that were funded at Spending Review 2025 and the first set of annual strategic plans. This will enable ongoing scrutiny and ensure the government upholds the commitments to improvement it has set out.

Next steps for the OVfM

The OVfM has delivered fully on its remit. As set out in its concluding report, which I have also attached, its functions are being embedded within HM Treasury and its reforms will leave a legacy of value for money improvements across the public sector. I would like to thank David Goldstone, the OVfM’s independent Chair, for his significant contribution to public spending.

I am copying this letter to the Parliamentary Secretary in the Cabinet Office and the Comptroller and Auditor General.

Yours sincerely

Rt Hon James Murray MP

Chief Secretary to the Treasury