Background to the report

The scale and nature of the COVID-19 pandemic and the government’s response are without precedent in recent history. The overall long-term impact and cost of the pandemic remains uncertain but will be substantial. The government is now beginning to plan for the post-pandemic recovery, with this autumn’s Spending Review providing an opportunity to set a medium-term approach for expenditure across government’s areas of responsibilities.

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As part of measures to manage spending over the coming months and years, government plans to increase its efficiency. HM Treasury allocates funding across the government’s priorities, sets limits on spending and defines the main outcomes that the public can expect the government to achieve with its resources. Ahead of the next Spending Review, HM Treasury has asked government departments to make plans which set out where they might achieve substantial efficiency savings by 2024-25. HM Treasury plans to work with departments over the summer to refine these plans, using a range of evidence to establish whether the plans are realistic, deliverable, or if they could go even further.

Scope of the report

In our role as the UK’s independent public spending watchdog, we have learnt about the successes and failures of past government attempts to improve efficiency. In this report we have drawn out the issues that we regard as being most important for government to get right when it comes to: identifying efficiency gains that can endure; having a robust plan to realise those gains; and finding ways to embed efficiency as an ongoing priority.

This will be the first in a series of National Audit Office reports about efficiency in government and we will use the issues raised here when assessing the value for money of efficiency measures.

“Given the huge impact of COVID-19 on the public finances, it is inevitable that government is now focusing on efficiency. As it prepares for the Spending Review, it will be important for government to apply the learning set out in this report drawn from its previous successes and failures in increasing efficiency.”

Gareth Davies, the head of the NAO