A recent National Audit Office report has discovered that although government reforms have slashed public sector IT spending by £316 million, insufficient departmental information exists to validate an additional £386 million in cost savings.

The report has prompted stinging criticisms from the Public Accounts Committee, which accuses departments of holding back key spending data.

The Committee’s Chair, Margaret Hodge, said:

“Too often, departments concentrate on their own self-interest, protecting their turf rather than ensuring joined up thinking across government. There is no evidence of clear thinking on how one decision to save money in one budget area might lead to an increase in expenditure elsewhere.”

The report criticised departments for omitting data on productivity, cost effectiveness and unit costs in key management information. Moreover, the report refers to Treasury suspicions that some departments were deliberately withholding information they considered “inconvenient”. In a number of cases, the PAC report states, “… departments had been gaming the system as they were unwilling to reveal that they had no evidence of any link between increased spending resulting in improved outcomes.”

Ms Hodge explained that the Treasury’s ability to properly scrutinise department budgets was being undermined by a lack of commercial skills and by high staff turnover. The treasury, she said, “needs to up its game to ensure proper scrutiny of what departments are up to.”

An implication of the report which was not directly mentioned is that thorough auditing across departments using all the necessary information may drive innovations in the public sector. Amongst these, hiring highly skilled flexible workers such as Umbrella Company employees to help implement reforms may go some substantial way toward reducing long-term costs.

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