Departments Told to Prepare for New Digital Finance Data System#

HM Treasury announced plans on July 1, 2025, for a new digital finance data system designed to provide real-time insights into departmental spending, outcomes, and performance, reducing compliance burdens and enhancing centralized oversight. The initiative, part of broader public spending reforms, aims to modernize the government’s financial architecture and support an agile, productive state.

Key Details of the Initiative#

Purpose and Functionality: The digital solution will enable live sharing of financial, outcome, and performance data at both departmental and program levels, offering a shared understanding of budget and objective performance in real time. This modernizes spending controls, replacing manual processes like spreadsheet uploads and physical letters. Link Link
Leadership Directive: Chief Secretary to the Treasury Darren Jones emphasized the system’s role in improving delegation and reducing compliance reporting burdens. Cabinet Secretary Sir Chris Wormald has instructed all secretaries of state and permanent secretaries to ensure their departments’ financial and performance systems are fully integrated with Treasury systems by the project’s completion. Link
Implementation Timeline: Following the Spending Review on June 11, 2025, departments will begin feasibility work, including audits of current systems and data approaches, to prepare for integration. Link

Strategic Alignment#

Shared Services Strategy: The Treasury is collaborating with the Cabinet Office to align the system with the Shared Services Strategy for Government and broader functional system reforms, ensuring compliance with civil service reform principles. Link
AI Integration: The system will leverage AI tools, such as HMT-GPT, to analyze spending data, identify trends, and detect potential inefficiencies early, building on existing shared ERP software and cloud-based back-office integrations. Link Link
Reform Goals: The initiative supports reduced regulatory burdens, improved delegation, and enhanced decision-making, aiming to save time and costs while boosting service delivery. Link

Spending Review 2025: Announced by Chancellor Rachel Reeves, the review emphasizes data-driven decision-making, with the new system supporting expert “challenge panels” and public policy proposal tools. Link Link
Digital Government Strategy: The initiative aligns with the Government Digital Service’s (GDS) efforts to modernize funding models for digital projects, addressing barriers like complex business case approvals and legacy system risks. Link Link
National Payments Vision: HM Treasury’s broader fintech agenda, including the Payments Vision Delivery Committee, supports digital infrastructure upgrades, such as the Faster Payments System, complementing the new system’s goals. Link Link

Implications and Next Steps#

Departmental Accountability: Departments are tasked with auditing current systems to ensure compatibility, with feasibility work starting post-Spending Review. Link
Stakeholder Engagement: The Treasury and Cabinet Office encourage departments to propose improvements to delegations and reporting requirements to enhance delivery efficiency. Link
Long-Term Impact: The system aims to transform public spending by providing real-time insights, reducing wasteful expenditure, and enabling proactive issue resolution, benefiting taxpayers and service users. Link

Conclusion#

HM Treasury’s new digital finance data system marks a significant step toward modernizing UK government spending, offering real-time data sharing to improve oversight and reduce compliance burdens. Departments are preparing through system audits and feasibility studies, with implementation aligned with broader digital and shared services strategies. Stakeholders can engage with the Treasury and Cabinet Office to shape the system’s development.