The Driver and Vehicle Licensing Agency will be asked to find efficiency savings of 5% over the next three years ahead of next year’s spending review.
The recommendation came in an independent review of DVLA published last week, which found that the agency is “critically important”.
In a foreword to the report, future of roads minister Lillian Greenwood said officials in the Department for Transport and DVLA were already taking action to implement the report’s recommendations.
The review found that DVLA has managed to keep its workforce at 2019 levels while delivering more for government year on year, and while demand for its core services has also risen.
But it said issues such as inflation and the complexity of some non-digitised services has meant that costs are increasing year on year and “the current efficiency picture is less favourable”.
It said there is an “opportunity for the DVLA to develop a robust efficiency strategy, aligned to its corporate vision and strategy and to target a minimum efficiency saving across its whole cost base of 5% over three years” ahead of the 2025 Spending Review.
DVLA should conduct a strategic assessment of efficiency options and confirm defined targets for savings in "workforce, finance, service digitisation and productivity", it said. The review suggested productivity savings could be found by improving processes and using AI. It also said the agency could also consider making "spend-to-save" bids to the Treasury.
The agency should take a “systematic and forensic approach to enable downward pressure on fees where possible, whilst delivering excellent services”, the report added.
DVLA should also be “ambitious (with the support of DfT) in measuring the potential efficiency prize from digital modernisation and service transformation”, the report said. And it should “consider making a further case for capital investment from HMT with a proven long-term return”.
The 5% efficiency target follows the Budget’s demand that departments find 2% in productivity and efficiency savings for next year ahead of the 2025 Spending Review.
The review made 19 recommendations to strengthen DVLA’s ability to deliver high-quality services, including strengthening collaboration between the agency and the Department for Transport and Central Digital and Data Office.
However, Janette Beinart, who led the review, was clear about how important the agency is.
“I have no doubt that the DVLA’s functions are essential and that it should continue to deliver as an executive agency of the DfT,” she said. “During my visits to the DVLA I was struck by the size and scale of its operations, and by the dedication of its skilled staff. In our numerous meetings with stakeholders, we received much positive feedback on the DVLA’s effectiveness.”
The review was part of the Cabinet Office’s Public Bodies Review Programme, which assessed agencies’ current and future capacity and capability to deliver high quality services. It was originally expected to report in early 2024.