Gershon under fire from Treasury Committee

The government’s accounting for Gershon efficiency savings has again been
criticised by MPs, who say that savings are recorded without taking the costs of
the reforms into account, and that departments were being encouraged to employ
expensive consultants.

The Commons Treasury Committee said the main limitations of Gershon were
inconsistencies and weaknesses in reporting by departments, insufficient clarity
as to the extent savings must be net of costs, outstanding issues relating to
measurement and verification, and a lack of measurable and externally verifiable
evidence that reported savings were secured without a diminution in service

It said it remained to be convinced of the value of explicit targets for
reductions in civil service numbers, on top of the demand for 5% annual savings
in administrative costs, warning that it ran the risk of distorting the
efficiency programme by encouraging the replacement of civil servants by
expensive consultants.

The accounting for cost reductions is changing, moving from the Office of
Government Commerce to the Treasury, establishing the principle that future
efficiency savings must be ‘cash-releasing’.

The committee called on the government ‘to clarify the reporting requirements
relating to implementation costs, indicating whether standard accounting
conventions will be used for identifying and distributing such costs.’

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