Whitehall budgeting must improve, says NAO

18 Oct 12
Whitehall’s budgeting system has improved but is still not good at demonstrating whether spending decisions represent value for money, the National Audit Office said today.
By Vivienne Russell | 18 October 2012

Whitehall’s budgeting system has improved but is still not good at demonstrating whether spending decisions represent value for money, the National Audit Office said today.

Information given to the Treasury was also often inadequate and varied between departments. In particular, cost-benefit data on resource spending  – which accounts for nearly 90% of all controllable spending – was patchy, which often made comparisons within and between departments difficult.

But the auditors did find improvements in the way capital projects were allocated. There were also some promising developments in some departments. These included the introduction of innovative methods of internal challenge, improved aspects of external challenge and strengthened links between performance and spending.

NAO head Amyas Morse said: ‘Good budgeting is an integral part of delivering any activity successfully and comparing actual results with what was planned. This needs more focused attention within government, particularly at a time when there is significant pressure on public spending and change across the public sector.’

The NAO recommended that the Treasury play a greater role in helping departments learn from the experiences of their counterparts. It also noted that high staff turnover within the Treasury’s spending teams made effective scrutiny of departmental spending proposals more difficult. Of the 52 Treasury spending team staff in place at the time of the 2010 Spending Review, only eight were still in post 20 months later.

The auditors also calculated that running the 2010 Spending Review cost the Treasury and departments around £20m.

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