Departments are under increasing pressure to reduce costs. The
scale of cost reduction required means that they will have to look
beyond immediate short term savings and think more radically about
how to take cost out of the business and how to sustain this longer
term. This will require strong leadership, disciplined financial
management and a corresponding change in organisational
culture.
Our work has repeatedly highlighted areas of waste in government
where complex processes, lack of information and poor planning have
led to inefficiencies. These are opportunities for cost cutting. We
have examined different approaches to cost reduction, from
reengineering processes and the greater use of technology through
to major departmental change programmes. The NAO is therefore
well-placed to set out its expectations of the effective management
of cost reduction.