Who can possibly be against any attempt by any government of any political colour to get better value of money? After all, public sector productivity – which has been basically flat over the last 25 years despite all the advantages of new technology – is at heart a question of doing just that.
So we should all welcome that Rachel Reeves in her first budget set up the Office for Value for Money in the very heart of the Treasury. With its similar title to the Office for Budget Responsibility (which has of course been criticised for taking over responsibility for the budget), perhaps here at last would be a tough-minded approach to securing value for money from government spending. After all, this is a bureaucracy where spending on government credit cards quadrupled over the last four years, where one team spent £1,200 on luxury coffee pods in two months, and others spent nearly £2,500 at a shoe shop called Shoe Crush in Barbados. As The Spectator’s Project against Frivolous Funding (Spaff), found out, the government is buying e-bikes for jobseekers. There is plenty for this new OVfM to get stuck into.
So far, the Office for Value for Money has published just two terms of reference for studies which it will undertake ahead of the Spending Review later this year: one on ‘governance and budgeting arrangements for mega projects’, the other on ‘procuring short-term residential accommodation’. Both extremely worthy subjects to study, but it is difficult to see that these studies will be informed by urgency, or a single-minded determination to get to grips with undoubtedly real problems. Consider this bit on ‘governance and resourcing’ from the study on short-term residential accommodation:
The Chief Secretary to the Treasury will oversee the study at a ministerial level, supported by the Deputy Prime Minister and the Home Secretary.
A senior official group, with representatives from relevant departments, will oversee policy development and the recommendations to ministers. This study will be resourced by officials from the Office for Value for Money, the Home Office, the Ministry of Housing, Communities & Local Government, the Ministry of Defence, the Ministry of Justice and HM Treasury, with input from the Cabinet Office and the Government Commercial Function.
The study will be informed by engagement with local authorities, the Local Government Association, the Centre for Homelessness Impact, and other relevant experts.
What could possibly go wrong?
Senior mandarins from a range of government departments are simply being asked to mark their own homework. Are we really going to get the same determined attitude which you would find in any successful private sector organisation which was seeking to identify and cut unnecessary expenditure? Is it really right tat the very people who have been responsible for the appalling public sector productivity problems of the last two decades are now suddenly going to discover the importance, not to mention the management skills, of getting true value for money in the public sector?
There is of course an alternative. Why not split both these studies in two and let one half be run by all these cross-departmental mandarins while the other half can be run by newly recruited professional managers from the private sector who have the experience and a successful track record of managing major projects? And to make things even more interesting, perhaps both parties could be invited to put forward their proposals for what percentage of the cost savings they should personally get in the event that they did actually achieve better value for money. One per cent of the savings made on cuts to the £834 billion currently being on mega projects in the UK is a lot of money.
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