Source · Select Committees · Public Accounts Committee
Recommendation 15
15
Acknowledged
We also noted that the Plan is only affordable if the Department achieves intended £13.8...
Conclusion
We also noted that the Plan is only affordable if the Department achieves intended £13.8 billion of savings, £5 billion of which it has not yet developed plans to achieve.39 The Department may be over-optimistic in expecting to achieve all intended cost reductions and efficiency savings.40 In addition, of the savings for which it does not yet have clear plans, the Department must find £2.1 billion of these in the next three years. The Department’s contingency over those three years is only £0.5 billion, which means it has limited ability to absorb any failures to achieve savings, or unexpected cost increases.41
Government Response Summary
The government agrees with the committee's recommendation and will provide an assessment of the key sources of uncertainty and risk in the forward plan in the next update to the committee.
Government Response
Acknowledged
HM Government
Acknowledged
4.1 The government agrees with the Committee’s recommendation. Target implementation date: December 2023 4.2 Forecasting across ten-years is inherently uncertain. In a complex plan with many large programmes, forecasts change as delivery schedules and cost estimates mature. Improving forecasting can help to reduce this risk, but the department’s plans need to be flexible to adapt to change. 4.3 The equipment plan report includes an upper and lower cost estimate for the ten-year plan based on uncertainty in key variables such as savings and efficiencies assumptions. To inform the costing ranges, the department carries out a rigorous annual process to review and challenge delivery teams’ costings through an independent assessment by the Cost Assurance and Analysis Service. 4.4 In the next update to the committee, the department will provide an assessment of the key sources of uncertainty and risk in the forward plan.