Book Description

This particular report follows on from an earlier NAO report on the same topic, see (HCP 255, 06/07 ISBN 9780102944518), published February 2007. The Shareholder Executive was established in 2003, to act as an effective owner of businesses that are owned or part-owned by government. It is now an operational group within the Department of Trade and Industry, with a portfolio covering 27 businesses and a combined turnover of £21 billion. The Committee notes that the role of the Executive marries both public and private objectives, setting out to both achieve public policy objectives through the most cost effective means and provide a satisfactory return on the public money invested through the shareholder value. The Committee states that the Executive has delivered value for the taxpayer by adopting a business criteria through a framework that sets out clear priorities for the businesses, alongside performance monitoring and, with management held to account for their delivery. The Committee sets out a number of conclusions and recommendations, including: that the Department of Trade & Industry is setting up a Board to provide direction and accountability for the Executive; that there should be a presumption that all government businesses come within the Executive's portfolio; that the Executive should market its services comprehensively and seek to be more visible across government; that the Executive should be given an explicit responsibility for advising sponsor departments on the investment needs of their businesses; that the performance management of the Executive needs to include wider measures that are based on the results of individual businesses; also, that the Executive needs sufficient pay flexibility to continue to recruit high calibre staff; that the Executive's responsibility for the postal services industry extends beyond shareholder value issues, and the Committee believes the Department should identify options for relieving the Executive of responsibility for Royal Mail policy; that the Executive should set business-level dividend targets, which take into account the risks faced by the business and the Executive should systematically undertake valuations of the businesses in its portfolio.