Government spending and waste/inefficiency

You know how, in the early days of your Economics course, Fiscal Policy is taught as "when the government spends it creates jobs and produces significant gains"? While I am not advocating you drop that view and become cynical of government (that is for you to develop - or not - as you mature), I do advise you to be able to evaluate the value of some government spending. FREER is a new part of the IEA, and it has published a report into inefficiency in government departments and spending projects. There are rumours that not only is Crossrail late and over-budget, it also has issues with the platforms being too low for the trains; this is something the French encountered after spending nearly £4.5bn on trains that now cannot be used. Here is a taster (from the report) of commons committees questioning some of the "culprits":

The Charge Sheet

“The Public Accounts Committee continues to have serious concerns about the cost and delivery of the Emergency Services Network (ESN) […including] the delivery timetable, potential overrun costs, and the absence of detailed contingency plans.” Public Account Committee preamble, www.parliament.uk

“It is disappointing to us to see a programme that at first seemed so promising unravel so quickly and fall victim to the same project management issues that we see so frequently across Whitehall.” Public Accounts Committee report: ‘Crossrail: Progress Review’, 3 April 2019, p.4

“Just so I am clear […the Disclosure and Barring Service] took a service […] ‘modernised’ it and productivity dropped off a cliff by a half. It has now got a little better, and we are about to go through a total reprocurement to use the same system, which you are concerned is architecturally flawed, in order to get us back, potentially to close to where it was before it was touched. Is that the summary?”

 “Yes, because that is the sensible way to go about it.” 
Exchange between Public Accounts Committee and the Head of the Disclosure and Barring Service reviewing their flawed ‘Modernisation’ Programme which cost £220 million more than expected, 11 March 2019

“If the project is too complex to provide a name as to where the failure is, why is the project not too complicated to provide bonuses to those at the top when they haven’t delivered?” 

“I don’t think you are comparing apples with apples in that regard.” 
Exchange between Public Accounts Committee and the former Chair of Crossrail reviewing their £2.8 billion cost overrun, 15 May 2019

“Do you think, as the head of the civil service, that we have the wrong people in the wrong jobs? Do we have a lot of very senior civil servants who are interested in policy and not at all interested in project management?” 

The Executive Summary (to read more click this link):

The UK public sector currently struggles to provide IT and project management. From NHS Records to the Emergency Services Network, and from the Disclosure and Barring Service to e-borders, the Government has been responsible for a litany of project management, delivery, and implementation failures stretching back over many years. On their own, these failures occasionally make the news — buried after the latest political intrigue and guaranteed to elicit no more than an eye roll from most.
Yet each one of these failures matters: they represent a forgone opportunity for change, a promise to the public not being realised, or spending not achieving what it was intended to do.

Indeed, government institutions seem rather flat-footed when it comes to project management. Repetitive failure matters more when, for much of the last decade, the Government has been making the case for spending restraint. When your pounds need to stretch even further than before, the ones you actually spend should be done so wisely. And, given that the political narrative has recently (regrettably) swung towards raw spending totals and inputs, the focus on how we spend, or what we achieve, has been lost at the very top. Prime Minister’s Question Time has recently felt like an arms race, characterised by evermore inflated amounts to spend, and little focus on how we spend it.

And that is why the travails of public-sector project delivery are so frustrating. In the last couple of years, the select committee I sit on (the one charged with overseeing that value-for-money test), Public Accounts, has dealt with nine separate instances of project failures, costing the taxpayer over £7.5 billion pounds and collectively causing 34 years of project delays. That’s £7.5 billion of money that has effectively been written off. Or, in crude terms, money that could have funded a penny off corporation tax for a year, the building of 21 new hospitals, the funding of 17,000 new police officers for the next ten years, or the ability to plug the socialcare gap for the remainder of this parliament.

 Of course, project failure is nothing new. The public are relatively inured to poor project delivery precisely because they have seen decades of it before. And, whilst those at the most senior level of politics have failed to focus on value for money, there has been a valuable continuing effort further down to build on the greater commercial focus first applied by Francis Maude in the 2010–2015 parliament. Credit should go to those people for some successes. This paper neither seeks perfection nor full success in project delivery. Yet, we need a renewed approach to the reduction of project failure in the public sector. We need to decrease inefficiency, to reform public-sector delivery mechanisms properly, and to shift the focus back on to how we spend money, rather than just how much.

“[…] Well, my background is not in programme and project management. I would not say every permanent secretary has that […]”
Exchange between Public Accounts Committee and the Head of the Civil Service, 1 April 2019

“Neither the Army nor Capita tested the fundamental changes to the recruitment approach prior to its introduction.” National Audit Office Report: ‘Investigation into the British Army Recruiting Partnering Project’, 14 December 2018

“We also found no clear or shared understanding of what constitutes value for money in nuclear decommissioning.” National Audit Office Report: ‘The Nuclear Decommissioning Authority: progress with reducing risk at Sellafield’, 20 June 2018