NAO report says efficiency savings don’t add up

The NAO has published a report on the savings declared by three more Government Departments (Revenue & Customs, MOD and Education) in procurement and other areas as part of the Treasury's value for money savings programme (designed to run from 2008 - 2011).

To no-one's great surprise, they find that only 38% of declared savings are verifiable.  44% are rated amber by NAO (the Procurement Excellence technical term for these is 'dodgy') and 18% are red ('very dodgy').  It is worth quoting Amyas Morse (the head of NAO) and his summary in full:

"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 within departments 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."

We've made this point before including in our White Paper; proper measurement is vital to support the cost reduction initiatives of the next few years.  And procurement will have no credibility if people see jobs being slashed at the same time that spurious 'savings' are being declared.  This I would suggest has to be high priority for the Cabinet Office Efficiency and Reform Group.  Get a strong savings methodology agreed and get it out into public organisations, with a clear statement that says THESE ARE THE RULES FOR CLAIMING SAVINGS!

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