Only a quarter of the £13.3bn in annual efficiency savings reported by the Government stand up to scrutiny, according to the National Audit Office.
Under the Gershon efficiency drive, the Government aims to reduce spending on administration by £21.5bn by next year. However, although government departments have reported 62% of the overall savings target, the NAO claims only £3.5bn (26%) of the efficiency savings are accurate. In contrast, 51% (£6.7bn) of the claimed savings ‘carry some measurement issues and uncertainties’, and 23% (£3.1bn) of the efficiency gains ‘may be substantially incorrect’.
According to the NAO, many of the measurement problems arise from long-standing weakness in departments’ data systems, and the risk of inaccurate reporting could be reduced in some cases by making straightforward adjustments, such as not reporting savings that will only be achieved for a limited period. In order to improve accuracy, the NAO makes a number of recommendations to departments, including focusing on the efficiency of all aspects of a business – not just those covered by efficiency projects – and encouraging staff to put forward ideas for improving efficiency.
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