Amyas Morse, the head of the NAO, said there are “many examples over recent years of government projects where weaknesses in forecasting have led to poor value for money”.
A report published last week says departments do not “take forecasting sufficiently seriously” and that “unrealistic assumptions” are often driven by policy agendas. It found that 70 separate NAO reports have criticised forecasting since 2010.
The new report raises particular concerns over optimism bias and the poor quality of data available to forecasters. It describes forecasting as an “indispensable element of project planning and implementation”, but says civil servants regard it as “of limited relevance to financial management”.
Meanwhile, a survey of civil service finance directors carried out by the NAO found that the majority believe that the current spending control framework “incentivised them to over-budget and underspend”.