The efficiency drive that increased costs by £81 million

December 16, 2008 8:56 AM

This is a pretty astonishing failure, reported in the Independent:



"The shared service centre in Swansea had been intended to cost £55m but make £112m in savings – which would have given an overall cut of £57m. Instead, the latest estimates show that the programme will cost £121m and save just £40m, leaving taxpayers with a bill of £81m.


In a report published today, the MPs blame senior officials in the department for the fiasco, but warned that "despite the extent of mismanagement in this case, no individuals have been dismissed or properly held to account"."


Huge amounts of taxpayers' money has been wasted and noone held accountable. That lack of accountability is one reason why these projects tend to go poorly, another reason is that the real causes of Government waste aren't addressed, as I wrote for the Guardian's Comment is Free website:



"The government proposes quite tough spending targets for the years after their fiscal stimulus has run its course. Unfortunately, their plan to achieve them is based around running much the same public services we have now, in roughly the same way, with minor operational changes delivering efficiencies. It won't really be possible to save serious amounts of taxpayers' money until the government starts doing things differently.


Cuts at HM Revenue & Customs may have saved money in the short term, but those savings couldn't last while the government were also asking the department to administer the hideously complicated tax credits system. It will take a simpler tax and benefit system to deliver big administrative savings. The Regional Development Agencies have cost more than £15bn since they were introduced in 1999 but have done little for regional economies. They could simply be scrapped. Cameron referred, in his speech, to a need to increase the "productivity of the state" but until this translates into concrete plans beyond a few choice areas like schools and prisons there is no comprehensive alternative to the government's proposals.


So long as our public services are still so centralised and bureaucratic it will be impossible to deliver value for taxpayers' money. If we can't get better value for money then paying off the massive debts currently being incurred will be incredibly expensive and they could spiral out of control, risking a real economic calamity."

This is a pretty astonishing failure, reported in the Independent:



"The shared service centre in Swansea had been intended to cost £55m but make £112m in savings – which would have given an overall cut of £57m. Instead, the latest estimates show that the programme will cost £121m and save just £40m, leaving taxpayers with a bill of £81m.


In a report published today, the MPs blame senior officials in the department for the fiasco, but warned that "despite the extent of mismanagement in this case, no individuals have been dismissed or properly held to account"."


Huge amounts of taxpayers' money has been wasted and noone held accountable. That lack of accountability is one reason why these projects tend to go poorly, another reason is that the real causes of Government waste aren't addressed, as I wrote for the Guardian's Comment is Free website:



"The government proposes quite tough spending targets for the years after their fiscal stimulus has run its course. Unfortunately, their plan to achieve them is based around running much the same public services we have now, in roughly the same way, with minor operational changes delivering efficiencies. It won't really be possible to save serious amounts of taxpayers' money until the government starts doing things differently.


Cuts at HM Revenue & Customs may have saved money in the short term, but those savings couldn't last while the government were also asking the department to administer the hideously complicated tax credits system. It will take a simpler tax and benefit system to deliver big administrative savings. The Regional Development Agencies have cost more than £15bn since they were introduced in 1999 but have done little for regional economies. They could simply be scrapped. Cameron referred, in his speech, to a need to increase the "productivity of the state" but until this translates into concrete plans beyond a few choice areas like schools and prisons there is no comprehensive alternative to the government's proposals.


So long as our public services are still so centralised and bureaucratic it will be impossible to deliver value for taxpayers' money. If we can't get better value for money then paying off the massive debts currently being incurred will be incredibly expensive and they could spiral out of control, risking a real economic calamity."

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