Whitehall’s spending watchdog the National Audit Office (NAO) has published a report putting the cost for abolishing 262 public bodies at £830m, not £425m government proposed in October 2010.
The 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 or of the one-off transitional costs of the changes.
Government departments will need to find gross savings of around £3.5 billion if they are to meet the government’s net savings target of £2.6 billion, after the costs of transition have been taken into account, from abolishing or restructuring public bodies.
Through the Public Bodies Reform Programme, run by the Cabinet Office, departments are taking over the functions of 65 public bodies and transferring those of another three to local government. Departments propose to abolish 262 bodies, by such means as mergers, transfers out of government and ceasing functions.
Head of the NAO Amyas Morsesaid said,
“The Cabinet Office and departments will have successfully achieved the largest restructuring of public bodies for many decades, and provided clearer accountability to elected politicians for some spending, if they succeed in carrying through all the changes they plan.”
“However, they are not doing enough to secure value for money. I would expect departments to have a better grasp of the costs of reorganising bodies and of carrying on functions that have been transferred.”