The review followed recommendations from the Public Accounts Committee and the National Audit Office for the Treasury to conduct a 'lessons learnt' exercise folowing the financial crisis.
On 17 October 2011, Sir Nicholas Macpherson, permanent secretary of the Treasury, announced a review of the Treasury’s response to the financial crisis. The announcement followed recommendations from the Public Accounts Committee and the National Audit Office for the Treasury to conduct a ‘lessons learnt’ exercise.
The review’s remit was to examine:
- the Treasury’s capability on financial services ahead of the crisis
- the pace at which the Treasury built its capability when the crisis hit
- whether the capability and senior management arrangements put in place to handle the crisis and the aftermath have been adequate
The findings were intended to inform decisions on the organisational arrangements of HM Treasury as part of its Spending Review settlement, and the review was invited to make recommendations with the aim of:
- ensuring that the Treasury has the capability it needs going forward
- improving the retention of people with the necessary skills, expertise, and experience, having consideration to issues of Treasury culture and values, as well as remuneration
- ensuring that the Treasury has robust arrangements for risk management, contingency planning and knowledge management
The review’s findings focus on the Treasury’s management capability during the crisis. The report makes a series of recommendations to improve the Treasury’s capability in relation to its current and future roles and responsibilities in financial services.
These include improving the retention of people with the necessary skills, expertise and experience. The review also addresses wider organisational challenges such as the relatively high staff turnover, and ensuring that the Treasury has robust arrangements for risk management, contingency planning and knowledge management in all areas of Treasury business.
The review has not assessed the efficacy of the policy response to the crisis which has been the subject of several reviews and enquiries by the Public Accounts Committee, Treasury Select Committee and the National Audit Office.
The views expressed are those of the review team and not the Treasury.