Efficiency and Reform Group needs to ‘strengthen processes’ to validate savings, says NAO

Gurjit Degun
16 July 2014

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16 July 2014 | Gurjit Degun

The Efficiency and Reform Group (ERG) needs to improve its work in certain areas to “strengthen its processes” to validate savings it has claimed, a report by the National Audit Office (NAO) has said.

Last month, the ERG, whose purpose is to help UK government departments achieve cost reductions, reported savings of £14.3 billion for 2013-14. In 2012-13, it saved £10 billion.

After examining the methodologies and processes employed by ERG to validate its savings claim, the NAO found of the 14 areas of savings, nine have strong methods and evidence.

“In the remaining five areas, the methods are less strong but significant savings are still likely to have been achieved,” the report said. “These savings include commercial models, which is a new category this year.

“The current method is adequate to support the one saving reported but it will need development as future savings are claimed. The areas of construction and commercial relationships have established methods, but more attention is needed in the collection of evidence for individual savings.

“In the areas of major projects and Government Digital Service (GDS) controls, the processes are weaker which have led to errors being identified and removed.”

The NAO added the ERG has “responded well” to many of the recommendations it made last year. “However, three of the areas the NAO identified as needing improvement in 2012-13 – GDS controls, construction and major projects - have continued to be weaker in 2013-14,” the report said.

Amyas Morse, head of the NAO, said: “The Efficiency and Reform Group has worked to improve the calculation of savings but there are still areas where the quality of evidence must be improved.

“ERG has undoubtedly achieved significant savings for the taxpayer, as well as generally injecting pace and priority into the efficiency agenda. But it should do more to strengthen its own processes. It should also look to improve its reporting on how the scope of the savings has changed over time.”

A Cabinet Office spokesperson said: “We welcome the NAO’s recognition of the significant savings we have made and our commitment to transparency. However, there is still more to do and we must now accelerate our reforms to ensure taxpayers’ money is being spent wisely.”

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