It is doubtful that the Office for Value for Money will have a “meaningful impact on driving efficiencies in departments”, a group of MPs has said, given its limited size and remit and the risk of duplication across existing bodies.
The cost-saving unit championed by chancellor Rachel Reeves has been tasked with an assessment of “where and how to root out waste and inefficiency” ahead of this year’s Spending Review.
But the Treasury Committee has flagged concerns that the unit’s chair, David Goldstone, is only contracted for a year and that, as of December, the unit only had 12 full-time members of staff.
There is also a significant risk that OVfM will replicate work already being carried out in other areas of government, according to the report, which urges the unit to “explain how it will interact with existing organisations and frameworks in government and the public sector that are already tasked with delivering value for money to avoid unnecessary duplication and to utilise existing expertise”.
The report lists seven examples of existing organisations, teams and processes designed to ensure value for money is considered in public spending decisions.
Examples given by the MPs include the National Audit Office – government’s external auditor, which has a budget of around £106m and more than 960 staff – and the Evaluation Taskforce in the Cabinet Office
It also noted the creation of the National Infrastructure and Service Transformation Authority, which will become operational in the spring.
NISTA will merge the Infrastructure and Projects Authority, which employs around 180 staff and which monitors the implementation of infrastructure projects, with the National Infrastructure Commission, which comprises 10 expert commissioners advising the government on infrastructure challenges supported by 42 staff members.
Existing processes to safeguard value for money include the Green Book, published by the Treasury, which provides guidance on how to appraise policies, programmes and projects; the Efficiency Framework, which contains Treasury guidance on how departments can make savings; and the Public Value Framework, a questionnaire to help departments determine how effectively programmes will be in achieving policy outcomes.
Finally, the MPs note that departments are still using Outcome Delivery Plans to monitor performance against priority outcomes – although these have not been published since July 2021.
“Those organisations are only a selection from the bodies working on value for money across Whitehall, which shows there is a clear risk of unnecessary duplication,” the report says.
The report also notes that departments other than the Treasury are “also involved in innovation in the delivery of public services” and therefore play a role in ensuring value for money in their area – such as the Department for Science, Innovation and Technology, which has been branded as the digital centre of government.
The Treasury Committee has also criticised a lack of transparency around the work of the OVfM. Its report says there is “very little information on which parts of government the OVfM will work with, how it will scrutinise departments’ investment proposals and who is responsible for evaluating OfVM’s effectiveness”.
The Budget Red Book, published in October, said the office would conduct value-for-money studies in specific high-risk areas of cross-departmental spending and scrutinise investment proposals, as well as making recommendations for reform. However, further details on these studies have yet to be published.
The report calls on the Treasury to clarify publicly by the end of January which departmental agencies or budgets will be subject to value-for-money studies.
It also asks the Treasury to publish an estimate of how much it will spend on the OVfM – including any use of external consultants.
As of December, the OVfM had 12 members of full-time staff, plus Goldstone as chair. They were mostly grade 6 and 7 secondees from the government commercial function and the Evaluation Task Force in the Cabinet Office, along with a deputy director seconded from the National Audit Office.
Andrew Wood, a deputy director at the OVfM who provided evidence to the committee, told the MPs that if a capability gap were to arise that external consultants or advisers might fill, the OVfM “would definitely keep that option open”.
Commenting on the report, Treasury Committee chair Dame Meg Hillier MP said: “Our committee has concluded the Office for Value for Money is an understaffed, poorly defined organisation which has been set up with a vague remit and no clear plan to measure its effectiveness. All of which leads me to feel this initiative may be something of a red herring.
“The Treasury needs to share far more information about what this small team will actually achieve for the taxpayer which cannot be done elsewhere. It must also be transparent about how it will operate and how it will assess its effectiveness.”