"It is worrying, when the money has already
been removed from their budgets, that a significant proportion of
the savings claimed by the Department for Transport and the Home
Office have question marks hanging over them. A failure to
deliver these savings may mean cuts having to be made
elsewhere.
"Both
the Department for Transport and the Home Office have had some
success in reducing costs so far, but more generally all
departments must now take a more rigorous approach towards ensuring
large-scale, genuine savings are
made."
Amyas Morse, head of the National Audit Office, 16
December 2009
The National Audit Office has today published
independent reviews of value for money savings reported by the
Department for Transport and the Home Office as part of their
2008-09 Annual Reports.
The Department for Transport reported savings
of £892 million, of which the NAO found that 43 per cent fairly
represent realised cash savings, 22 per cent may represent realised
cash savings but with some uncertainty, and 35 per cent may be
overstated. At the Home Office, the NAO sampled £338 million
of £544 million reported savings and found 59 per cent of these
fairly represent realised cash savings, 24 per cent may represent
realised cash savings but with some uncertainty, and the NAO has
significant concerns over 17 per cent.
These independent reviews are two of a series
of reports the NAO will be producing into savings reported by
departments as part of the targets set by the 2007 Comprehensive
Spending Review. Overall, the Government has set a target to
generate annually cash-releasing savings of £35 billion by
2010-11.
The savings programme is based on the
principle that the planned savings have already been removed from
departments' budgets. Departments therefore have to deliver
savings to release enough cash to meet their spending plans or
reduce activity compared with the planned level.
The NAO is satisfied that, in many cases, both
departments are achieving long term savings. The main reasons for
the NAO's concerns are:
- Eighty per cent of the Department for Transport’s reported
savings relate to support for the rail industry. The NAO
considers the benchmarks against which these savings were measured
should have been revised in the light of the most recent
information, which would reduce the savings reported in
2008-09.
- The main reasons for the NAO's concerns with around 17 per cent
of savings reported by the Home Office were that reported gains
were one-off cash savings which will not permanently reduce the
Department's expenditure, or were not new annual savings as the
procurement actions had been taken in prior years.
Publication details:
HC: 86, 2009-10
ISBN: 9780102963366