By Vivienne Russell
20 July 2010
Whitehall departments are unlikely to come up with the £35bn
of annual savings demanded of them this year, government auditors said today.
The National Audit Office said the savings programme
initiated by the Treasury following the 2007 Comprehensive Spending Review had not
been well understood and suffered from poor quality control, while the
programmes initiated by departments were not sufficiently radical.
The NAO reviewed the savings so far of five major
departments, including the Home Office and the Ministry of Defence, which totalled
£2.8bn. It found that 18% of these did not represent savings or significantly
overstated them, while almost half (44%) of those reported were surrounded by
uncertainty. Problems included departments using unsuitable baselines and
difficulties in demonstrating links between savings and performance.
NAO head Amyas Morse 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 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 situation means that departments will have to think more radically
about how to reduce costs and how to sustain them in the longer term.’
The 2007 CSR said departmental savings should be cashable,
sustainable and have a neutral impact on service quality.
The other Whitehall departments included in the NAO review
were: the Department for Education; the Department for Transport; and Revenue
& Customs. Between them, the five departments have to find 40% of the total
savings required of Whitehall in the CSR.