A GOVERNMENT efficiency programme has been criticised in a damning report which casts doubt on whether real savings in the public sector were achieved.
In her latest report published today, Comptroller and Auditor General Lynn Pamment said that efforts to find efficiency savings – begun in 2019 during Charlie Parker’s time as government chief executive and continuing until May last year – failed to deliver all the promised benefits.
And she questioned whether many of the savings should properly be described in that way, highlighting that one department had achieved ‘savings’ by not filling vacant posts.
The programme also included spending more than £1 million on bringing in consultants to create efficiencies in 2020.
By the end of August last year, a savings target of £86.1 million for the period 2020 to 2022 was forecast to fall £9.3m short but the CAG highlighted problems with ‘the granularity and integrity’ of data supporting the identification of these efficiency savings.
‘There was a general expectation that there should be no service degradation as a consequence of making efficiencies. However, the approach adopted lacked the specific identification of current and desired service levels to enable departments to assess their service target objectives,’ the report stated.
For example, the CAG analysed in detail the savings of Infrastructure, Housing and Environment between 2020 and 2022, noting that while the department was forecast to achieve 92.1% of its ‘savings’, almost all of these had been achieved by reducing the property maintenance budget and by not recruiting staff to vacant posts.
‘While these measures have resulted in reduced expenditure, neither of these two broad areas of budget reduction meet the recognised good-practice definition of what constitutes efficiency savings. In addition, both are non-recurrent savings measures and do not represent ongoing efficiencies or ongoing sustainable savings strategies,’ the report stated.
The document identifies a similar shortcoming at the Judicial Greffe, where the department’s targeted savings of £496,000 for 2022 was forecast to be almost completely achieved.
However, the report continues: ‘The savings have been achieved by realigning the budgets for court costs to reflect a trend over the last five years and to reflect an increase in charges.
‘I consider these items to be budget realignment and income generation. While I note that they fall within the definition of efficiency savings adopted by the efficiencies and rebalancing programmes, they are not items that meet the recognised good-practice definition of efficiency savings.’
Commenting on the use of more than £1m on consultants to support the efficiencies programme in 2020 and the investment of £273,000 in the zero-based budgeting programme to support it, the report stated: ‘There is, however, little evidence of cultural change in respect of efficiencies and the zero-based budgeting programme has delivered budget realignment rather than efficiencies.’
The CAG acknowledged the impact of the pandemic during 2020 when ‘arrangements to develop government cross-cutting themes to support the identification and achievement of longer-term efficiency savings in effect did not happen at all, being severely interrupted by the pandemic’.
And she noted that the pandemic forced the government to use a range of different measures – including borrowing strategies, economic stimulus, treatment of funds and the delivery of savings and efficiencies – to balance its finances.
But, commenting on her findings, Ms Pamment also highlighted the longer-term impact of Covid-19, saying: ‘During 2020, the efficiencies programme was replaced by the rebalancing programme. However, this rebalancing programme has not delivered all of the recurring benefits envisaged in the original efficiencies plan.’
The CAG notes that a new approach to establish a value-for-money programme, part of the new government plan for 2023-2026, ‘provides an opportunity to establish new programme governance arrangements and an appropriate supporting culture shift’.