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Getting full value for money from the significant investment in the Typhoon project will depend on the Ministry of Defence successfully progressing the delivery of multi-role capability so that the aircraft can be deployed when required and affordably. The 2010 Strategic Defence and Security Review underlined how Typhoon is core to the RAF's combat aircraft capability and emphasised the Government's commitment to develop Typhoon into a fully multi-role aircraft which can conduct both air-to-air and ground attack missions. Typhoon already successfully undertakes air defence tasks and so far MOD has committed a total of £564 million to upgrade Typhoon for the ground attack role. However, it is unlikely to become the aircraft of choice for most ground attack missions until 2018. The cost of the Typhoon project has risen substantially. Despite the MOD's now buying 72 fewer aircraft (down from 232 to 160, a reduction of 30 per cent), the forecast development and production cost has risen by 20 per cent to £20.2 billion. This is a 75 per cent increase in the unit cost of each aircraft. The cost of supporting each aircraft has also risen by a third above that originally expected. Key investment decisions were taken on an over-optimistic basis and costs have risen at a rate the MOD did not predict. The objectives of four partner nations on the project are not fully aligned and decision-making is slow. There have also been problems with spares and other support which mean the RAF is not flying Typhoon as much as planned.
This report examines the past decisions taken on the Typhoon fighter aircraft and looks at improvements that the Department can make to its delivery model to get more from industry in terms of reduced costs and better performance in the future. The Department originally planned to buy 232 aircraft. However, in light of changed operational requirements and significant funding constraints arising from the pressures of the defence budget, it is now ordering 160 aircraft and will retire the 53 oldest aircraft by 2019, leaving a long-term fleet of 107 aircraft. Overall, it is costing the Department £20.2 billion, £3.5 billion more than it first expected, to buy a third fewer aircraft. This is equivalent to the purchase cost of each aircraft rising by 75%, from £72 million to £126 million. Problems with the availability of spares mean that Typhoons are not flying the hours required and the Department is forced to cannibalise parts from other aircraft to maximise the number of aircraft available on a given day. As a result, it is not fully training all its pilots. Support costs are budgeted at £13.1 billion, but could be as high as £16.6 billion across the life of the aircraft. The Department has identified potential savings of £3.5 billion to keep support costs within budget. The Department will need to both reduce the cost and increase the timeliness of future collaborative spares and repairs contracts. At present, the contracts do little to incentivise better industry performance and to penalise failure.
Almost a third of young people with a Statement of special educational needs at the age of 16 are not in any form of education, employment or training two years later. The Government spent £640 million on special education for 16- to 25-year-olds in 2009-10, yet too many of these young people are falling through the gaps after they leave compulsory education, damaging their life chances and leaving a legacy of costs to the taxpayer. The system is extremely complex and difficult to navigate, with an array of different providers. Too many parents and young people are not given the information they need to make decisions about what is right for them. But three quarters of local authorities do not give parents any information at all about the respective performance of schools, FE colleges and specialist providers. The Department doesn't know how much money is actually spent on support. The huge variation between local authorities in funding per student suggests that a postcode lottery is at work. Students with higher-level needs are placed on the basis of statutory assessments of need; however, witnesses emphasised just how patchy the quality of these assessments can be. The opportunity for reform presented by the Department's recent Special Educational Needs Green Paper should be used to address our concerns It is right for local authorities to decide how to meet the needs of young people in their area - but local people must have access to clear information so that they can hold local authorities to account for how well they deliver
The Work Programme, designed to help long-term unemployed people into sustainable employment, started in June 2011, replacing virtually all welfare to work programmes run by the Department for Work and Pensions. Over the next five years, the Programme is expected to help up to 3.3 million people at a cost of £3-5 billion. 18 prime contractors, each with sub-contractors, are contracted to deliver the Programme across England, Scotland and Wales. The Department has done well to introduce the Work Programme in 12 months. Prime contractors receive the majority of their payments once a participant has stayed in a job for a set period of time, with the length of time varying according to claimant group. Although some financial risks have been transferred to the providers, the test of whether the Programme is achieving value for money will be whether more people are in work as a result of the Programme than would have been if it had not existed and that the wider social benefits which underpin the cost benefit analysis are delivered in practice. The Department should seek assurance on a range of issues: that sub contractors are treated fairly, not misled into accepting inappropriate contracts, and receive the number of cases and funding they were promised; that harder to help claimants are not parked and ignored; and ensuring proper value for money. The Department relies on contractors to set minimum standards of service but has no measurable indicators against which the quality of service can be judged
The National Audit Office report on this topic published as HC 1788, session 2010-12 (ISBN 9780102975376)

DFID

Great Britain: Parliament: House of Commons: Committee of Public Accounts

Published: 2012-02-03

Total Pages: 56


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The DFiD's transfer programmes deliver cash, food and assets, such as livestock, directly to people living in poverty. Transfers can be used to tackle a range of issues, such as hunger and malnutrition, or access to health and education services, in a variety of contexts. In 2010-11 the Department spent £192 million on social protection programmes, which includes its transfer programmes. The evidence heard suggests transfer programmes are effective in targeting aid, and ensuring the money goes directly to the poorest and most vulnerable people. It is therefore surprising that the use of transfer programmes has not increased. The Department only plans to support transfer programmes in 17 of its 28 priority countries. It does not have an overall strategy for the use of transfers and its decisions on where to support transfer programmes look reactive. The decision as to whether or not to propose a transfer programme is taken by staff working in the country and it is not clear why there are extensive programmes in some countries and none in others. The Department does not collect data on all the costs of the transfer programmes it supports and the Department is therefore unable to say whether it is lifting more people out of poverty for every pound spent on transfers compared to other programmes. The Department's long-term objective is for the governments of recipient countries to take on the responsibility of owning and funding transfers as part of a sustainable social security system. However, the Department has not been clear about how individual programmes will be sustained
BBC's efficiency Programme : Seventy-third report of session 2010-12, report, together with formal minutes, oral and written Evidence
In November 2011, HM Treasury published the first audited Whole of Government Accounts (WGA), covering the year 1 April 2009 to 31 March 2010 (HC 1601, ISBN 9780102975192). The Committee welcomes this major step forward in improving transparency and accountability and highlights some of the information it contains: at 31 March 2010 the government's public service pensions liability was around £1,132 billion; the present value of its future commitments under PFI schemes was £131.5 billion; the government wrote off £10.9 billion in unpaid taxes and expected to have to pay £15.7 billion for outstanding clinical negligence claims; cost of future nuclear decommissioning (£56.7 billion); the need for stronger accountability systems to secure effective responsibility for cost and value for money at local levels - academies, Free Schools, Foundation Trusts and GP consortia. But the WGA will only serve its purpose- showing what the government owns, owes, spends and receives - if it is timely and robust. The figures in the first audited WGA are too dated because Treasury took 20 months to prepare and publish the report. Treasury must address the issues that led the Comptroller and Auditor General to qualify his audit opinion on the WGA 2009-10. A key issue is Treasury's decision to deviate from accounting standards, by omitting Network Rail, the publicly owned banks, and various other government-controlled or owned bodies from the WGA. The Committee sets out a set of principles that future accounts should follow.
When the 2010 Strategic Defence and Security Review (SDSR) had started, the Department had contracts for two carriers with an estimated cost of £5.24 billion and delivery dates of 2016 and 2018. Decisions taken in the Review mean the UK will have no carrier aircraft capability from 2011-2020. While two carriers are still being built, only one will be converted to launch the planes that have now been selected, and the other will be mothballed. The UK will only have one operational carrier with a significantly reduced availability at sea when Carrier Strike capability is reintroduced in 2020. That carrier is being built according to the old design and will have to be modified to make it compatible with the requirements of the new aircraft: the cost of these modifications will not be known until 2012. The SDSR decision is forecast to save £3.4 billion, but only £600 million of this is cash savings while the remainder is simply deferring expenditure beyond the Department's 10 year planning horizon. The decision will lead to nine years without Carrier Strike and full capability will not be achieved until 2030. And more work will be needed to get the best and most flexible operational use from the carrier. The Committee is disappointed that the systemic issues that have appeared in its other recent defence reports continue to arise. The Committee has built on what has been said in past reports and focussed on two key areas: strategic decision-making and delivery of capabilities
The Commons Public Accounts Committee publishes its 61st Report of the Session which, on the basis of evidence from the Cabinet Office and HM Revenue and Customs (HMRC), examined tax disputes. At 31 March 2011 HM Revenue & Customs was seeking to resolve tax issues valued at over £25 billion with large companies, some of which included disputes over outstanding tax. In this report, the Committee expresses concern about how the Department handled some cases involving large settlements and that there needs to be proper separation between the negotiation of tax settlements and the authorization of such settlements. The Committee also states that HMRC made matters worse by trying to avoid scrutiny of these settlements, keeping confidential the details of specific settlements with large companies. This effects Parliament's ability to establish value for money, compounded further by imprecise, inconsistent and potentially misleading answers given by senior departmental officials, including the Permanent Secretary for Tax in particular over his evidence on his relationship with Goldman Sachs, in facilitating a settlement with the company over their tax dispute. HMRC governance processes in these matters were inconsistent and it has now appointed two new Commissioners with tax expertise, and plans to introduce a new assessor role to permit independent review of large settlements before they are finalised. The Committee further states that it saw little evidence of personal accountability within the Department, and that a perception has developed that large companies are treated more favourably, receiving preferential treatment compared to small businesses and individuals.