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.
