Government not taking account of IT transfer costs when axing quangos, says NAO

The government may miss savings targets, as it axes quangos, partly because it has focused mainly on staffing costs and not included the costs of transferring IT systems elsewhere, according to the National Audit Office.

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The government may miss savings targets, as it axes quangos, partly because its departments have focused mainly on staffing costs and not included the costs of transferring IT systems elsewhere, according to the National Audit Office.

The government reorganisation promised to cut costs and bring decision making under the wing of ministers, instead of relying on quangos to indirectly implement government policy in the field.

But a new NAO report raises "concerns that government departments do not have a good enough grasp of the ongoing costs of functions being transferred to other parts of government", says the NAO.

The NAO says most government departments have not yet made "adequate estimates of the transition costs of reorganisations". To date, it says, they have identified costs for reorganisations covering just 51 percent of all employees affected by the Public Bodies Reform Programme.

This shows, the NAO said, that departments have not fully developed their plans to realise the estimated net savings of £2.6 billion over the spending review period of 2011-12 to 2014-15. "Where departments have identified costs, they have focused on staff costs, particularly redundancies, with less attention to IT, estates and indirect costs, that our previous report identified to be at a similar level to staff costs", said the NAO.

Amyas Morse, head of the National Audit Office, said the Cabinet Office and government departments were "not doing enough to secure value for money".

Margaret Hodge, chair of the parliamentary Public Accounts Committee, which will question government officials on the NAO findings, added that the reorganisation "is following an all too predictable path".

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