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Sir John Bourn, head of the National Audit Office, reported to Parliament today that he had identified five critical issues which departments must pay careful attention to if the extra £61 billion spent on improving public services over the next three years is to have its full impact.

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It is too early to tell whether the increased funding will deliver all the improvements planned. The report looks specifically at the preparations made by the recipients of the three largest increases, namely the Department for Education and Skills, the Department of Health and the Department for Transport to use these increased resources. This will provide a baseline for future NAO reports assessing the actual improvements achieved, as the additional funding begins to take effect.

Many of the issues highlighted apply to departments more generally. As a consequence, the report sets out five generic risks faced by many in Whitehall in their use of resources. These are:

Complexity of the delivery chain

Departments’ intentions are often filtered through several different organisations. For example, in the rail sector, the Strategic Rail Authority, the Office of the Rail Regulator, Network Rail and the train operating companies all have a role to play in improving rail travel. Complex delivery chains increase the risk that key aims are diluted, misunderstood or not given consistent priority. Departments need to work to remove unnecessary complexity, confusion and bureaucracy.

Capacity of delivery organisations

Essential work to strengthen capacity is underway. For example, the Department for Education and Skills has training in place designed to increase the programme and project management skills of over 1,000 members of staff. Departments need to give particular attention to developing project and programme management skills, expertise in working in partnership and assessing suppliers’ capabilities. Shortfalls in capacity can prove expensive, often requiring temporary solutions, bought at a premium.

Targeting Resources

Resources must be targeted to reach services most in need of improvement and which focus on benefiting citizens. For example, Ministers agree the Highway’s Agency’s programme of major improvement schemes over £5 million with priority given to schemes which contribute to congestion reduction and safety targets. The Department of Health allocates around 75 per cent of NHS resources directly to Primary Care Trusts to provide services to meet the health care needs of their local populations.

Risk Management

Departments need to focus clearly on ensuring that each organisation involved in service delivery is resilient. Departments have made progress in identifying risks but more needs to be done so that they are actively managed. They should avoid a too narrow or mechanistic interpretation of risks.

Monitoring and Evaluating Performance

Credible evaluation of performance, supported by reliable and transparent information, is important so that poor quality service is quickly identified and remedied. But a balance is needed to ensure that this process is not an unnecessary bureaucracy nor has a perverse impact. And departments need to find ways of reducing the pressures of multiple targets on front line staff.

"This unprecedented increase in public spending equates to £1,000 for every person in the UK. I continue to examine the value for money of individual projects and schemes but this report gives the opportunity to set out the fundamental issues that all departments need to address in the coming months and years in order to deliver a truly improved public service."

Sir John Bourn


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