Improving productivity in Government could save “tens of billions”, head of spending watchdog says
The head of the Government's public spending watchdog has said Government could save "tens of billions" by improving productivity.
In his annual speech to Parliament, Gareth Davies, who leads the National Audit Office (NAO), said he wanted to "make the case" that the Government can achieve more with what it already spends and that this amounts to a "material contribution to the fiscal challenge, certainly tens of billions of pounds a year".
He noted that tax spending and borrowing forecasts supporting November's Autumn Statement showed that Government of any "complexion" faces a tough challenge ahead.
The main challenges facing Government include the increasing demand for services, "crumbling" national infrastructure, out-of-date IT systems, and inflation, according to Davies.
He also said that the public sector is finding it harder to retain staff.
"Turnover in social care roles reached 37% in some areas in 2022," he said. "Neither is this problem confined to 'frontline' roles as evidenced by the thousands of digital vacancies across Government."
These factors have created a "productivity problem", Davies said.
However, he went on to list the following areas where improvements could "make public money work harder":
- Better managed major projects
- More efficient asset management
- Better use of competition in procurement
- Digital transformation
- Reducing fraud and error
He suggested that better data and 'innovation and evaluation' aimed at creating operational improvements could enable better productivity.
He also said: "[The] planning and spending framework can better support this drive for efficiency and productivity.
"Our recent report on combatting the harm from illegal drugs provides a good example of how Government needs to work across existing departmental boundaries to get the most from the available resources.
"The Shared Outcomes Fund is aimed at encouraging this approach. Yet examples like this are still the rare exception and many other opportunities for better allocative efficiency remain to be exploited."
He said each of these "enablers" must be underpinned by a stronger focus on leadership and delivery skills.
Davies noted: "It is relatively easy to cut spending. It requires skilled leaders and managers to deliver genuine efficiencies that release resources for government priorities. We need leaders that have the capability to deliver what's required, achieving the right blend of homegrown talent and expertise from outside."
Concluding, he said: "There's enough evidence from the positive examples we have found in our work to be confident that significant amounts of public money can be freed up for Government's priorities. But it will take a disciplined, focused, cross-government approach over several years to fully realise the potential, and make the exceptional the norm.
"For our part, the NAO's programme of value for money work will continue to identify opportunities for better results and greater resilience."
He also said the NAO will continue to produce its lessons learned reports and its good practice guides, offering practical advice to those running services and tasked with delivering more efficiently."
Adam Carey
