DfT savings programme 'costs taxpayers £81m'

A plan to achieve £57 million of efficiency savings at the Department of Transport (DfT) will instead cost the taxpayer £81 million, the National Audit Office (NAO) says.

It reveals efforts to making the savings by sharing human resources, payroll and finance services have backfired.

"Poor initial implementation" is blamed for the failure alongside incorrect initial cost estimates and "inadequate contract management".

The NAO report suggests the DfT's decision to ask IBM to achieve "a very demanding timetable for implementation" may have been partly to blame.

Its failure to agree on a common set of business practices and inadequate system testing also contributed to the eventual cost, which will reach £81 million by March 2015.

"It is disappointing to see a programme which aimed to improve the efficiency and effectiveness of a department leaving it on current projections some £80 million worse off," NAO head Tim Burr commented.

"Departments need to be realistic about the challenges of implementing shared services and to manage suppliers effectively."

Liberal Democrat transport spokesperson Norman Baker said the report reflected wider problems within the DfT.

"At every stage the DfT fails to look after public money. Overspend on road schemes has reached £1 billion and even their cost cutting projects end up costing taxpayers more," he commented.

"This is a failing department in urgent need of a shakeup."

The DfT defended its record, however, insisting it was taking a leading role in developing the shared services programme and arguing the scheme will provide long-term benefits across Whitehall.

"As with any pioneering project on such a large scale, there will always be lessons to be learned and we have already made improvements," a spokesperson said.

"We are determined to develop shared services towards best practice standards for the public sector and this will result in significant savings in the future."