Review of the Efficiency Delivery Programme

Audit Summary

Publication Date:
December 2012

Audit Office:
Northern Ireland Audit Office

Link to full report:
https://www.niauditoffice.gov.uk/sites/niao/files/media-files/efficiency_final.pdf

This study examines the extent to which the 2008-11 efficiency programme delivered efficiency savings and the lessons that can be learnt for future efficiency programmes.

The review focuses on a sample of 42 efficiency projects - drawn from the four largest spending departments which, between them, accounted for some £1,303 million (81 per cent) of reported savings.

On the Measurement of Departmental Efficiency Savings:

For around two thirds of the projects examined, NIAO can offer no assurance that genuine efficiency savings have been achieved. This reflects a lack of understanding by departments of what represents an efficiency saving, and a lack of sufficient financial and performance information.
Around a third of the projects reviewed did not have the basic financial and performance information necessary for auditors to make an informed judgement on the achievement of efficiency savings.
Departments, on the whole, measured only inputs, in cash terms, but there was little focus on the measurement of outputs, quality, and the extent to which frontline services were protected. Efficiencies cannot be validated unless departments collate all the necessary information.
Departments did not always net off the upfront investment costs or the additional recurrent costs necessary to deliver an efficiency. This is misleading.

On the Management of the Efficiency Programme:

Guidance provided by the Department of Finance and Personnel (DFP) was not sufficiently detailed and was not fully implemented by departments. It did not define an efficiency saving; detail how departments should monitor and measure savings; provide advice on the need to net any investment costs off against savings; or seek assurance that the saving had not impacted adversely on service users.
Departments’ published EDPs were inconsistent; lacked transparency about what was actually being proposed and the potential impact of those proposals; did not provide information sufficient to allow for meaningful public scrutiny or internal monitoring; and did not provide an adequate basis for the measurement of efficiency savings.
Public reporting of efficiencies was not transparent, comprehensive or meaningful. Progress against departments’ overall savings target was reported to the Executive and Assembly but was not published. Information on performance against the details contained in EDPs was not published and little, if any, reference was made in departments’ annual reports.

For the Measurement of Departmental Efficiency Savings, the audit recommended that:

departments do more work to improve information systems, particularly to identify the unit cost of activities and to quantify current performance.
departments maintain a clear audit trail to support the identification, monitoring and reporting of future efficiency or savings measures.
future efficiency or savings initiatives include measures which seek to capture quality of service.
departments establish measures of inputs, outputs and quality of service for all savings programmes; that a robust baseline is established; and that all these measures are monitored and reported on comprehensively, on an annual basis.

For the management of the Efficiency Programme, the audit recommended that:

more substantive guidance is prepared for future savings or efficiency programmes. Guidance should be published and disseminated before the programme commences. The training needs of staff involved in managing and measuring efficiencies should be assessed and any necessary training should be provided to departments.
departments exercise improved oversight of their ALBs efficiency proposals, enhance their scrutiny role and improve governance arrangements. Departments should provide a strong challenge function to their ALBs in relation to the planning and delivery of future efficiency measures, including the need to ensure that quality of service is maintained.