Source · Select Committees · Public Accounts Committee
Recommendation 3
3
Previous efficiency programmes have over-promised and under-delivered.
Conclusion
Previous efficiency programmes have over-promised and under-delivered. ‘Optimism bias’ is a long-standing problem within government where project plans are impractical and unrealistic, and do not always achieve the expected objectives. We have seen this across a range of programmes, such as Shared Service Centres and, more recently, the Defence Equipment Plan 2020–2030. These problems occur due to poor data on costs and performance, but also because departments and central government do not consistently challenge existing plans. The Treasury and Cabinet Office told us that “test-and-learn pilots” gather programme data to give departments 6 Efficiency in government the flexibility to react when programmes do not meet their assumptions. However, government needs to be more agile in responding to these results: currently too few schemes are halting early enough after showing signs of poor progress. These issues could re-emerge if government prematurely over commits to efficiencies based on changes that have occurred during the pandemic which may not endure, such as reducing the government estate as a result of staff working from home. Recommendation: HM Treasury need to ensure plans are subject to adequate challenge, testing the realism of departments’ expected savings, and considering the use of pilots where appropriate.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. Recommendation implemented HM Treasury recognises the need to underpin the planned efficiencies and savings agreed through SR21 with departmental plans for delivery. SR21 confirmed savings of 5% against day-to-day central departmental budgets in 2024-25 from the Efficiency and Savings exercise ahead of Spending Review 21. The Chief Secretary to the Treasury led a process of engagement in summer 2021 to test departmental savings and efficiency proposals to test for deliverability. This process also involved the Government Functions reviewing relevant efficiency proposals to ensure they were realistic and deliverable. HM Treasury tests, and reviews business cases and departmental benefits realisation plans in practice through the spending control process led by HM Treasury spending teams. Spending teams use gated approvals such as Major Project Review Groups (MPRG) or Treasury Approval Panels (TAPs) to review departmental projects or programmes to test whether they are suitably designed to deliver the desired outcomes. HM Treasury also works closely with the Cabinet Office to undertake performance stocktakes, jointly reviewing policy and financial performance. Spending teams’ scrutiny is supported by enhanced financial reporting and management information (such as Finance Board Packs) developed by the Government Finance Function and delivered by departmental finance teams. HM Treasury and Cabinet Office are also working with departments to develop Outcome Delivery Plans (ODPs) covering 2022-25, that will set out how each UK government department will use its resources to work towards the delivery of the priority outcome agreed at SR21. ODPs will test the deliverability of all of the government’s spending plans, including plans for efficiency and savings. They will be published after the start of the next financial year on gov.uk. HM Treasury plans to collaborate with Government Functions to share best practices across the Civil Service. The Government Functions will be encouraged to share departmental best practices to generate further opportunities for efficiencies across government based on these successful pilots in departments.