Recommendation 26

The Treasury confirmed that it had incorporated the NAO’s principles for reporting efficiency savings into its Efficiency Framework, which included setting out the requirements for sustainability and avoiding cost-shunting.39 The new Efficiency Framework states that for reporting both cash-releasing savings and non-cash releasing savings there should not be an adverse impact on performance or outcomes. For cash- releasing savings it explains that savings must not adversely impact on the achievement of a department’s strategic priorities, and that departments should be able to demonstrate that because of reforms, the department and sector is delivering better value for money overall. It also states that, to report cash releasing savings, they should be “sustainable and should not be reallocating or deferring costs to future years”. The Framework notes that 34 Committee of Public Accounts, Efficiency in government, Twenty-Eighth Report of Session 2021–22, HC 636, 3 December 2021 35 HM Treasury, Treasury Minutes: Government response to the Committee of Public Accounts on the Twenty- Seventh to the Thirty-First reports from session 2021–22, CP 631, February 2021 36 Q 44; C&AG’s Report, paras 13, 2.7 37 Q 44 38 Q 45 39 Q 76 16 Cabinet Office functional savings cost reallocation or deferral takes place where there is a simple movement in cash across a year end which does not relate to a total net reduction in waste or inefficiency when the two years are taken together. It does not, however, specifically reference cost-shunting.40 Avoiding double-counting efficiency savings