By Jaimie Kaffash
15 December 2009
Almost one-third of reported savings by the Department for Transport has been ‘significantly overstated’, according to the National Audit Office.
In its report on value-for-money savings made by the DfT and the Home Office, the NAO found that £307m of a total £892m savings generated by reduced funding to Network Rail were an area of concern. It said that the savings were not based on actual expenditure in previous years.
The NAO also said £58m, 17%, of the £338m savings reported by the Home Office and examined by the NAO were ‘one-off events that will not permanently reduce the department’s expenditure’.
Amyas Morse, head of the NAO, said the two departments would have to make cuts elsewhere to cover these claimed savings.
‘It is worrying, when the money has already been removed from their budgets, that there are question marks hanging over claimed savings from the Department for Transport and the Home Office.
‘A failure to deliver these savings may mean cuts having to be made elsewhere. I also expect to see more detail than departments have been able to provide on whether savings represent real improvements in value for money,’ he said.
Public Accounts Committee chair Edward Leigh said the findings had ‘serious implications’ for the departments involved and government departments as a whole ‘needed to take a much tougher approach to identifying and making genuine, long-term value-for-money savings’.
A DfT spokeswoman said: ‘All our savings estimates were based on the best information available at the time and in accordance with Treasury guidance.
‘In the case of support to the rail industry, the NAO has recognised that substantial savings have been made and that expenditure for both areas was lower than the value-for-money target level in 2008/09.’
A Home Office spokesman said the criteria used did not reflect the good work it has done. 'Some of the savings were one-off cash savings in the prices of major contracts, but the rules only allow those savings to score if they are made again and again, in each successive year. These have been rated as 'red' even though they have saved millions of pounds.
'As a department we are committed to providing value for money and reported estimated savings to Parliament worth £690m a year in our 2009 Autumn Performance Report. This puts us in a strong position to meet future challenges on value for money.'
15 December 2009
Almost one-third of reported savings by the Department for Transport has been ‘significantly overstated’, according to the National Audit Office.
In its report on value-for-money savings made by the DfT and the Home Office, the NAO found that £307m of a total £892m savings generated by reduced funding to Network Rail were an area of concern. It said that the savings were not based on actual expenditure in previous years.
The NAO also said £58m, 17%, of the £338m savings reported by the Home Office and examined by the NAO were ‘one-off events that will not permanently reduce the department’s expenditure’.
Amyas Morse, head of the NAO, said the two departments would have to make cuts elsewhere to cover these claimed savings.
‘It is worrying, when the money has already been removed from their budgets, that there are question marks hanging over claimed savings from the Department for Transport and the Home Office.
‘A failure to deliver these savings may mean cuts having to be made elsewhere. I also expect to see more detail than departments have been able to provide on whether savings represent real improvements in value for money,’ he said.
Public Accounts Committee chair Edward Leigh said the findings had ‘serious implications’ for the departments involved and government departments as a whole ‘needed to take a much tougher approach to identifying and making genuine, long-term value-for-money savings’.
A DfT spokeswoman said: ‘All our savings estimates were based on the best information available at the time and in accordance with Treasury guidance.
‘In the case of support to the rail industry, the NAO has recognised that substantial savings have been made and that expenditure for both areas was lower than the value-for-money target level in 2008/09.’
A Home Office spokesman said the criteria used did not reflect the good work it has done. 'Some of the savings were one-off cash savings in the prices of major contracts, but the rules only allow those savings to score if they are made again and again, in each successive year. These have been rated as 'red' even though they have saved millions of pounds.
'As a department we are committed to providing value for money and reported estimated savings to Parliament worth £690m a year in our 2009 Autumn Performance Report. This puts us in a strong position to meet future challenges on value for money.'
