Source · Select Committees · Public Accounts Committee
Recommendation 23
23
Accepted
HMCTS repeatedly reduces expected savings from courts and tribunals reform programme.
Conclusion
HMCTS has reduced the savings it expected to achieve from the programme several times. When we last reported on the programme in 2019, HMCTS expected to save £244 million a year from 2024–25 through its reforms and claimed that it had saved £133 million in total so far.47 Since then, the programme’s expected savings have decreased. The National Audit Office found that in its most recent estimate, HMCTS predicted £220 million in yearly savings from 2025–26. It expected the programme to save £2 billion over its lifetime (to 2029–30), £310 million (13%) less than the £2.3 billion forecast in 2019. However, this is likely to have decreased further as HMCTS is yet to set out how pausing work on some its projects as part of its recent programme reset will impact savings.48
Government Response Summary
The government acknowledges that changes mean savings will be delivered later, with £50 million fewer recurring annual net savings by 2025-26. However, it expects full recurring annual net savings of £227 million by the end of 2026-27, which will include additional benefits to restore those lost from descoped projects.
Government Response
Accepted
HM Government
Accepted
5.1 The government agrees with the Committee’s recommendation Recommendation implemented 5.2 Recent changes to plans mean that savings will be delivered later than originally envisaged, but the overall Reform programme is still expecting to achieve the full value of ‘end state’ benefits in the Reform business case. The delay in achieving benefits will result in £50 million fewer recurring annual net savings by the end of 2025-26. However, the full recurring annual net savings of £227 million are still expected once benefits have fully accumulated, in line with the original business case, and this will include additional benefits to restore the £12 million benefits lost from the projects descoped by the recent changes. These full benefits will be achieved a year later than originally expected - by the end of 2026-27. 5.3 HMCTS has developed unit costs of outputs across 15 of its largest services, which are updated quarterly. By tracking changes in unit costs over time, HMCTS can obtain important evidence about the impact of Reform and other changes on the efficiency of service delivery. The unit costs are now showing, for example, that the operational cost of processing a divorce case has reduced from a baseline of £121 (the unit cost estimate prior to the COVID-19 pandemic) to £68 in Quarter 4 of 2022-23. A unit cost is derived using both cost and output levels and is therefore impacted by changes in either of these measures. Unit costs are monitored routinely by the HMCTS Finance and Performance Committee chaired by the HMCTS Chief Financial Officer and are tracked against the unit cost reductions that are expected as a result of HMCTS Reform. Unit costs are also reported to the full HMCTS board.