Recommendation 25

We therefore asked the Cabinet Office how confident it was that efficiencies were genuinely cash savings, and had not resulted in additional costs elsewhere in government. The Cabinet Office told us it asked the heads of function to answer that question, but did not seek independent verification. It explained that it was “wary” about cost-shunting type activity, but that it thought that this was “probably not an area that is particularly susceptible to so-called cost-shunting”.37 We therefore asked what controls it could introduce to ensure that cost-shunting was not taking place. The Cabinet Office recognised that it did not currently have “that extra loop” to check with departments whether savings had resulted in a tertiary impact. It told us that it would be taking up the NAO’s recommendation to be more prescriptive in its guidance to ensure that the cost savings being put forward by departments were “net of cost shunting in other places”. It did not, however, propose to change the methodology of its central team or the GIAA, or to have an independent verification of whether savings had resulted in service implications.38