Poor management information is undermining the government’s spending cuts programme, with departments routinely ‘gaming’ the Treasury by withholding spending information, a Public Accounts Committee report has said.
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Departments lack the sort of management information vital to demonstrating what outcomes they expected to achieve for each pound of proposed spending, said the report.
Margaret Hodge, chair of the PAC, said: "Departments often lack information on costs, or accurate benchmarks. This means the Treasury struggles to assess the cost effectiveness of proposed spending and make meaningful comparisons.
"Too often, departments concentrate on their own self-interest, protecting their turf rather than ensuring joined up thinking across government. There is no evidence of clear thinking on how one decision to save money in one budget area might lead to an increase in expenditure elsewhere,” she said.
The news follows a National Audit Office report, which found that reforms have cut IT spending by £316m, but was unable to validate a further £386m in savings due to a lack of departmental information.
The Treasury needs to enforce requirements for departments to assess the cost-effectiveness of their spending and analyse in aggregate how well departmental proposals address key government objectives, said the report.
The Treasury needs to up its game to ensure proper scrutiny of what departments are up to
Margaret Hodge, Public Accounts Committee
“Information which could aid improved understanding of value for money such as data on unit costs, cost effectiveness and productivity is not commonly part of the key management information used in departments; and not routinely shared with the Treasury,” said the report.
“The Treasury told us that, in some cases, it suspected that departments deliberately withheld information that may have proved inconvenient. It considered that in a number of cases departments had been gaming the system as they were unwilling to reveal that they had no evidence of any link between increased spending resulting in improved outcomes,” it said.
Hodge said: "High staff turnover and a lack of commercial skills at the Treasury are undermining its ability to scrutinise departmental budgets effectively. Only eight of the 52 staff on the Treasury spending teams we looked at lasted more than 20 months.
"This enables some departments to play games with the Treasury, for example, by deliberately holding back information. The Treasury needs to up its game to ensure proper scrutiny of what departments are up to.