Revenue & Customs under-estimated the cost of its efficiency programme by half by missing out vital elements of spending, auditors have found.
The PaceSetter programme is meant to help the department provide more with fewer resources, using ‘Lean’ business improvement techniques. While R&C’s productivity is improving as a result, the NAO says, it is changing too slowly to meet its efficiency targets.R&C introduced PaceSetter as part of its plans to cut running costs by 25%. It was one of the first public sector organisations to apply ‘Lean’ techniques, such as redesigning claim forms, standardising procedures across offices and more tailored approaches to entitlement checks.
The department estimated the cost of the programme would be £55m since 2005/06 but the NAO found it had cost at least £115m.
It says the R&C estimate only covered part of the cost, and a ‘more complete assessment’ of the scheme, including the salaries of its 400 trained PaceSetter practitioners, should have been completed.
The NAO report warns that ‘robust tracking of costs and benefits’ is necessary if other government departments apply similar techniques, which aim to improve efficiency through eliminating waste and giving more responsibility to frontline staff.
The report concludes that the techniques need to be used more strategically to maximise the benefits of the plans, and says R&C has ‘much further to go before it has a mature process improvement approach’. Specifically, it should apply PaceSetter efforts to areas that will gain most benefits.
Auditor general Amyas Morse said: ‘PaceSetter is travelling in the right direction but not fast enough.’
R&C’s approach to process improvement should be ‘better measured, more sophisticated and more ambitious’, he said.
