The Government “only has the haziest of views” of how billions of pounds are being spent by public services, a damning report by the Public Accounts Committee has claimed.

In the new report, the PAC found that most Government departments lack understanding of how money is spent, despite the public services bill totalling £450billion.

Departments are not required to monitor how to provide detailed costing information, which could be used to increase productivity.

Sir Geoffrey Clifton-Brown MP, Chair of the Public Accounts Committee said: “Billions upon billions of pounds of taxpayers’ money are spent every year on delivering public services.

“I have no doubt that it would surprise those same taxpayers to know that government has only the haziest of views on specifically how their pound is being spent.

“It is a matter of pure common sense that government’s plans for more affordable public services will not manifest without a far more detailed picture of how much they are in fact costing.”

In the PAC’s report, technology and data was identified as a key problem to understanding finances, but warns that a “significant cultural shift” is required to achieve this.

While there is an existing standard, its usage is not widespread across departments and there is little oversight.

The first recommendation of the report is to have the Treasury detail what steps they will take to hold Permanent Secretaries – the most senior civil servant in a department – to account.

This is where the significant cultural shift is needed, as there is currently no set targets on finance monitoring.

The second recommendation is that the HM Treasury and the Government Finance Function set out how to practically monitor costing within six months.

The report identified legacy IT systems as a major impediment to making improvements and a significant contributing cost to public finances.

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It recommended that a list, provided by the Department for Science, Technology, and Innovation (DSIT), be provided with all of the legacy IT systems and in six months which legacy systems have limitations.

The Single Service Owner (SSO) system was initially unveiled in 2024 to the top 75 government services.

A Single Service Owner is a person fully responsible for a digital service, a program which the Public Accounts Committee would like to see rolled out further.

Although AI has been implemented in some departments, the support provided is less than that of legacy systems, the report said.

Pay rates for AI specialists by the government do not match the pay rate across the country, the report stated.

The report recommended the DSIT lay out how it can ensure that AI specialists can be secure in their position.

Sir Geoffrey said: “We welcome the beginnings of a change in thinking, which our Committee has previously called for, in the uprating of digital experts’ salaries to improve recruitment and retention.

“These changes must now go further to match market rates in London and the South-East.

“We also identify other cultural shifts that will be required in the civil service to implement the change required – on the setting of targets for cost-identification, and on the proper recording of how civil servants are spending their time with an eye to improving productivity.

“This report may be viewed as a guide for central government to begin to achieve the change required.”