Leading MPs have questioned whether the new Office for Value for Money will actually save the taxpayer any money.
In the October budget, Chancellor Rachel Reeves announced the new department to help the government “realise the benefits from every pound of public spending”.
However, a report published by the cross-party Treasury Select Committee has heavily criticised the Office for Value for Money (OVM) and questioned how it would have “a meaningful impact on driving efficiencies in departments”.
The committee’s chair, Labour MP Dame Meg Hillier, said she thinks the initiative “may be something of a red herring”.
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However, Sir Keir Starmer’s spokesman said it is important and will help “root out waste”.
In the report, MPs said the OVM’s independent chair, accountant David Goldstone, a former chief operating officer at the Ministry of Defence, is only contracted for a year and as of December – two months in – there were only 12 full-time staff, not the promised 20.
It was revealed in November Mr Goldstone is being paid £950 a day from existing Civil Service budgets and is expected to work a monthly average of a day a week, meaning he will have an annual salary of £50,000. If the post was full-time, it would be £240,000 for the year.
The committee also said there has been no estimate of how much the OVM will cost, including the cost of any external consultants it is considering using.
The MPs said the OVM is duplicating what other departments are already doing, with seven examples of teams and processes within Whitehall ensuring public spending decisions are value for money – and said there are more.
It pointed out the National Audit Office is the government’s statutory external auditor that conducts regular value-for-money audits and has an annual budget of about £106 million and more than 960 staff.
Mr Goldstone, who also works on the government’s submarine delivery, HS2 and GB nuclear, told the committee in December he is “not going to duplicate other parts of government” but “will leverage them and work with them where we can”.
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The committee also said there is very little information on which departments the OVM will work with, how it will scrutinise their investment proposals and who is responsible for evaluating the OVM’s effectiveness. It has called on the Treasury to publish those details.
Committee chair Dame Meg said: “Our committee has concluded the Office for Value for Money is an understaffed, poorly defined organisation which has been set up with a vague remit and no clear plan to measure its effectiveness.
“All of which leads me to feel this initiative may be something of a red herring.
“The Treasury needs to share far more information about what this small team will actually achieve for the taxpayer which cannot be done elsewhere. It must also be transparent about how it will operate and how it will assess its effectiveness.”
Sir Keir Starmer’s spokesman said the OVM is “important and taxpayers will want the government to ensure taxpayer money is spent appropriately”.
He added it is bringing in “expertise to help root out waste and identify areas where spending is wasteful and can identify savings”.
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Sky News has contacted the Treasury for a comment.
