A report by thePublic Accounts Committee (Pac)has
said that there are doubts over the way government departments
report efficiency gains in certain IT projects and sasy that there
is evidence that some efficiency projects may be having an adverse
impact on service quality.
"The Treasury claimed at the end of last year that, by the
mid-point of its Efficiency Programme, it had already achieved an
annual £13.3bn of efficiency savings. This claim does not stand up
to close scrutiny. Our committee found that there is a question
mark over the reliability of nearly £10bn worth (74%) of the
savings claimed," said MP Edward Leigh, chairman of the Committee
of Public Accounts.
The
report said though most efficiency projects have not incurred
significant ongoing costs, the Department for Work and Pensions
ignored substantial additional costs when reporting £300m of
efficiency gains from an initiative to pay benefits electronically.
Because not all customers have bank accounts in which to receive
such electronic payments, the government introduced the Post Office
Card Account.
The contract for administering this account cost the department
£164m in 2005-2006, but this cost was not accounted for in its
reported efficiency gains, thus giving an overly optimistic picture
of what has actually been achieved and of the true benefit of the
initiative to the taxpayer.
The report recommended that departments need to
improve their measurement of efficiency by establishing
reliable baselines, taking account of all additional costs involved
in achieving efficiencies and having supporting evidence which is
subject to independent challenge by, for example, internal
audit.
The Government's Efficiency Programme is designed to achieve
ongoing efficiency gains across the public sector of £21.5bn a year
by 2007-2008 to improve front line services, to reduce civil
service posts by more than 70,000 and to reallocate a further
13,500 posts to front-line services.