Treasury efficiency ‘savings’ cast into doubt

By staff

Less than half of already-announced efficiency savings for the three years to 2010/11 have been judged as sustainable by Britain’s public spending watchdog.

The National Audit Office (NAO) warned that the much severer spending reductions to come meant the Treasury would have to implement much more radical steps if it is to succeed in cutting costs.

It assessed £2.8 billion of the £35 billion annual savings which the Treasury was seeking to save in its value for money programme from 2008/09 to 2010/11.

Of this, 38% represented sustainable savings; 44% represented potential, uncertain savings; and 18% represented either overstated savings or no savings at all.

“Public confidence in reported savings is undermined where they do not stand up to external scrutiny,” NAO head Amyas Morse warned.

“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.”

Separate reviews for specific departments found that 59% of the Ministry of Defence’s savings and 58% of HM Revenue and Customs’ savings were not fully sustainable. Only nine per cent of the Department for Education’s savings were given the green light.

“Few of the savings made under the programme represent major departures from previous practice,” Mr Morse added.

“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.”