HM Treasury’s Office for Value for Money - which has now been closed - delivered on its remit to root out waste and make recommendations for reform, according to a report published as part of the tranche of Autumn Budget documents.
OVfM was established in October 2024’s Autumn Budget with a planned life expectancy of 12 months and the objective of driving efficiencies for the looming Spending Review as a significant part of its mission.
The unit had a team of just 15 full-time-equivalent staff supporting chair independent chair David Goldstone, and a budget of £1.6m across 2024-25 and 2025-26. It expanded its life expectancy by one month.
Earlier this year, members of parliament’s Treasury Select Committee questioned OVfM’s ability to have a “meaningful impact” and warned that it was at risk of duplicating work by the likes for the National Audit Office and the Cabinet Office’s Evaluation Taskforce.
However, an evaluation published today finds that OVfM delivered what was asked of it by chancellor Rachel Reeves, and fully or largely achieved all but one of 11 “success measures”.
Although the unit has closed, some of its core functions will be taken over by HM Treasury and National Infrastructure and Service Transformation Authority (NISTA). These include improving the spending controls and accountability framework across government, repeating the OVfM's efficiency exercises at every future spending review, and undertaking biennial thematic vale for money reviews.
Foremost among the success measures which the OVfM has met was delivery of departmental technical efficiency plans identifying annual efficiency gains of £13.8bn by 2028-29, measured against planned resource departmental expenditure limits for the current financial year.
The evaluation concludes that while not all departments set out plans to deliver efficiencies of 1% or more during every year of the spending-review period, the total across all departments is equivalent to 4% over the timescale.
“Departments would not have taken this approach without the intervention of the OVfM,” the evaluation says. “While efficiency targets have often formed part of departmental spending review settlements, efficiency targets agreed in the past between departments and HM Treasury have not been underpinned by specific delivery plans, nor have they had reporting processes in place to enable delivery to be tracked.”
The report says the OVfM’s role was “particularly important” in scrutinising efficiency plans and targets proposed by departments, testing their deliverability, and providing greater reassurance that the efficiencies identified could be delivered.
It adds that the OVfM also took action to support departments to identify potential efficiencies, including by hosting a roundtable with departments to share best practice and encourage innovation.
It acknowledges that the OVfM could not have achieved the results it did without the work of departments and other officials in HM Treasury, however.
Another area where OVfM’s mission was determined to have been “largely achieved” was in being a helpful addition to – rather than duplicative of – other work at HM Treasury and beyond.
The report said stakeholders viewed the unit’s work as “complementary to other organisations”, in particular the NAO and the National Infrastructure and Service Transformation Authority.
“The approach of establishing a programme of thematic VfM reviews was seen as complementary to future spending reviews, with a clear focus on delivery and deliverability,” it said. “Work on departmental efficiency plans was aligned with other teams in HM Treasury, and with government departments.”
Nevertheless, the report noted that some stakeholders highlighted “conflicting steers” from OVfM and relevant HM Treasury spending team in relation to efficiencies work.
The sole “success measure” that the evaluation was unable to judge was whether OVfM resources were used efficiently to deliver outputs with minimal wasted spending or time, compared to other teams in the Treasury.
The evaluation said it had “not been possible to fully assess this success measure”, although it said analysis showed that OVfM had been comparable in its size to other medium-sized teams within HM Treasury.
“More detailed information on team productivity across HM Treasury has not been available, and therefore this evaluation is not able to conclude on this measure,” it said.
‘We leave the spending framework better than we found it’
In the foreword to a different OVfM document also published today, Goldstone said the unit had focused from the outset on delivering “practical and lasting change” in partnership with HM Treasury, other departments and external partners.
“We have sought to address systemic value for money issues not by setting unevidenced targets, but by working in partnership with others to address root causes rather than symptoms, sharpening accountability, supporting credible long-term planning, and tackling the persistent barriers to effective coordination across government,” he said.
“The results are significant, and I am immensely proud of what the OVfM has achieved. At the Spending Review we agreed with departments bespoke efficiency targets and plans. We have worked in partnership with colleagues across government to inform future delivery of two high-risk areas of public spending. And, crucially, we have delivered change.
“The OVfM leaves the spending framework better than we found it 13 months ago, and on a clear path towards further, sustained improvement after the OVfM is gone.
“As the OVfM closes, I am genuinely delighted we have fulfilled the remit set by the chancellor. None of this would have been possible without the expertise of ministers and officials in HM Treasury and across government, nor the constructive challenge and support of our external partners. My thanks go to all those who have contributed to the OVfM’s work.”