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.