Efficiency plan to save £159m has cost £1.4bn

A MASSIVE seven-year government efficiency programme has backfired – by increasing the cost to the taxpayer by hundreds of millions of pounds, a public spending watchdog said.

Whitehall departments have spent £1.4 billion over the past seven years in a bid to save £159 million by sharing “back- office” functions such as personnel and procurement.

Private-sector firms typically slash a fifth of their annual spend within five years using similar methods, the National Audit Office (NAO) said in a report.

But a combination of poor co-ordination, over-expensive IT systems, weak sanctions and an insistence on highly-tailored services saw public-sector costs rise instead.

Labour MP Margaret Hodge, who chairs the Commons public accounts committee, said it was “a shockingly familiar story of spiralling costs and poor value for money”.

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“The shared service initiative started out filled with good intentions, to save money and reduce duplication of back-office functions across Whitehall. This has not been delivered,” she said.

A Cabinet Office spokeswoman said: “We have been clear that the government will leave no stone unturned in the hunt for savings. The government has already announced a new approach to shared services that will save money for taxpayers.

“The government is committed to the correct management of major government projects which have not always delivered what they set out to achieve.”