Friday, February 17, 2006

NAO: Brown's Bogus Efficiency Gains

We've blogged before (eg here and here) about the dodgy arithmetic behind Gordo's bogus claim to be well advanced with those Gershon efficiency savings. It now transpires the National Audit Office agrees with us 110%:

"The Government's reported efficiency gains totalling £4.7 billion... should be regarded as provisional and subject to further verification, given the degree of risk that efficiencies may not be measured accurately."

Well, as we all know, anything this government tells us always needs "verification" from somebody else. Whether it's the Comptroller and Auditor General, the United Nations Weapons Inspector, or Lord Archer, any source will be more reliable than the government.

And behind its diplomatic language, this two volume NAO report is a stinging critique of the whole Gershon process:
  • Baselines- "There is not always a justification for the baselines selected by projects...there have been difficulties in establishing baselines...58 per cent of efficiency projects...did not include information on the baselines against which changes in inputs and outputs would be measured."
  • Costs- "There is inconsistency over whether planned efficiency gains are net or gross of upfront capital investment costs and ongoing expenditure such as maintenance... departments can report efficiency gains gross... most efficiency projects do not currently take account of additional costs."
  • Outputs- "...inconsistencies in how effectively projects are measuring quality of output. If no quality measures are in place, the reported efficiency might otherwise be simply a cut to services...efficiencies from improving the quality of services without a proportional rise in inputs (accounting for one-third of all targeted "gains")...need to measure quality of output before and after".
  • Double-counting gains and cost shifting-"...measurement systems currently in place are not sufficiently detailed to guarantee that the risk of double counting is being mitigated."
  • Data quality- "Departments need to improve the robustness of data quality assurance...well known and long-standing limitations in departments’ data systems and the robustness of their management information systems...mean that their ability to measure changes in output quantity and quality as well as inputs still lags behind."
  • Dependence on IT- "The public sector has yet to demonstrate that it can consistently deliver successful IT programmes. Nevertheless, at least £3.2 billion (15 per cent) of the efficiency gains target is dependent on projects needing new or upgraded ICT systems."
  • Staff numbers- "Of the staff reductions so far, 56 per cent are attributable to the Department for Work and Pensions...but... agency staff and contractors employed by the Department are not accounted for within the Department’s staff figures."
  • Programme leadership- "There was a difficult transition from the Gershon Review to the Efficiency Programme...high turnover among key has taken longer to materialise".

So to summarise, here we have another ill-planned government wheeze- designed primarily to grab headlines- with no defined startpoint, no defined route, no signposts, and no leadership.

In other words, more of the same.

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