Reducing Costs In The Department For Work And Pensions


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Reducing costs in the Department for Work and Pensions


Reducing costs in the Department for Work and Pensions

Author: Great Britain: National Audit Office

language: en

Publisher: The Stationery Office

Release Date: 2011-06-23


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The NAO reports that the Department for Work and Pensions will have to make rapid progress in reorganising the way it operates if it is to meet its target of achieving sustainable running cost reductions of £2.7 billion while implementing substantial welfare reforms and a £17 billion reduction in benefits and pensions by 2014-15. Since 2007, the Department has reported reductions of £2 billion in its running costs, and initial out-turn data show that it met its target from the June 2010 Budget to reduce running costs by £535 million in 2010-11. However, the NAO has concluded that the Department must make progress quickly in order to be able to demonstrate that it can secure sustained cost reductions in a structured and strategic way. The report recognises that the DWP is only at the start of its new cost reduction challenge. However, without basing its running cost reduction plans more on robust information on the profile of its business costs and how that relates to the value of the services delivered, the Department is not in the position to make rational choices about what it should stop doing, what it should change and what it should continue. Recent cost reductions have been based largely on budget restrictions rather than on fundamental reform of working practices. Three months into the Spending Review and the Department does not yet have a detailed model of how it wants to run in the future.

Cost reduction in central government


Cost reduction in central government

Author: Great Britain: National Audit Office

language: en

Publisher: The Stationery Office

Release Date: 2012-02-02


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This report by the National Audit Office on progress by central government departments in reducing costs concludes that departments took effective action in 2010-11, cutting spending in real terms by 2.3 per cent or £7.9 billion, compared with 2009-10. The analysis of departments' accounts supports the Efficiency and Reform Group's estimate that Government spending moratoria and efficiency initiatives, including cuts to back-office and avoidable costs, contributed around half of the figure, some £3.75 billion. However, the report warns that departments are less well-placed to make the long-term changes needed to achieve the further 19 per cent over the four years to 2014-15, as required by the spending review. This is partly because of gaps in their understanding of costs and risks, making it more difficult to identify how to deliver activities and services at a permanently lower cost. Fundamental changes will be needed to achieve sustainable reductions on the scale required. It is unclear how far spending reductions represent year-on-year changes in efficiency, or whether front-line services are affected; and the departments' forward plans examined by the NAO are not based on a strategic view. Departments' financial data on basic spending patterns is sufficient to manage budgets in-year, but information about the consequences of changes in spending is less good. Longer term reform is a Cabinet Office priority and departments will need to look beyond short-term cost cutting measures and make major operational change. Cost reduction plans also need to build in contingency measures to cover unexpected risks.

Cost reduction in central government


Cost reduction in central government

Author: Great Britain: Parliament: House of Commons: Committee of Public Accounts

language: en

Publisher: The Stationery Office

Release Date: 2012-04-27


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The National Audit Office report on this topic published as HC 1788, session 2010-12 (ISBN 9780102975376)