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National Audit Office criticises government savings programme

NAO finds savings programme “not well enough understood” across government

The National Audit Office today questioned the government’s ability to meet
its target of £35bn of annual savings, following the publication of a damning
report into the previous government’s ‘value for money’ programme.

Departments and local authorities have reported annual savings of £10bn under
New Labour’s 2007 Comprehensive Spending Review, which runs until 2011. But the
NAO found that ‘departments’ management of their programmes could have been
improved’. The NAO said: ‘To date we have reviewed savings totalling some £2.8bn
from five major departments – transport, the Home Office, defence, Revenue
& Customs and education – which are to deliver around 40% of the total
across central government.

The report will make uncomfortable reading for chancellor George Osborne who
has introduced an ‘austerity’ regime across Whitehall.

A total of 38% was found to represent sustainable savings, while 44% may
represent savings, but with some uncertainty, indicating that departments do not
have the information on cost and performance to prove savings have been made.
The remaining 18% did not represent savings, the NAO said.

Recommendations include ensuring that the technical rules were widely
consulted on, published and made readily available to working level departmental
staff before the programme began, ensuring training for departments as well as
clarifying the benefits for senior officials.

Amyas Morse, head of the National Audit Office, said: ‘Public confidence in
reported savings is undermined where they do not stand up to external scrutiny.
The proportion which do not fully meet the Comprehensive Spending Review
criteria is evidence both that the programme was not well enough understood
across government and that quality control within departments was not good
enough.

‘Few of the savings made under the programme represent major departures from
previous practice. The scale of savings needed in the current financial si
tuation means that departments will have to think more radically about how to
reduce costs and how to sustain them in the longer term.’

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