How the spending watchdog blew £750,000

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It's not easy to cut costs if you're in government. Not only are you duty bound to spend £50 on a bag of pasta or £100 on a ream of A4 paper, but there are also a myriad of ways you can overspend on staff. At the moment different branches of government seem to be trying all of them - from paying a fortune for fat cats, to offering massive payoffs to failing leaders. However, the National Audit Office has taken the prize.

It has managed to spend £5.2 million on cutting the cost of staff. Genius


The waste
The problem is that because it planned to make people redundant, it had to follow civil service rules which force it to offer voluntary early retirement in return for handsome payments.

The trouble is that these payments were snapped up, and not everyone who took the package were the people that the body wanted to get rid of - so they had to pay some people a fortune to go away - and then advertise for a replacement. Some have been paid up to £750,000 each - which is the highest reported pay off since the crackdown on quangos.

How could this happen?
A huge chunk of the blame lies at the doors of those in the Labour Government who were responsible for drawing up the contracts for these employees in the first place - and included such ridiculously generous terms for early retirement and demanded that people be offered it in any redundancy excercise. Presumably at the time because the government was employing new people as fast as it could dream up jobs for them it didn't think it would ever have to actually face the business of getting rid of people.

Most of those who have been paid to leave have not been named, as they have been deemed too junior to be in the public eye. However, those who the office has had to name include the auditors general Caroline Mawhood and Wendy Kenway-Smith. When Kenway-Smith left, with a package estimated to be worth up to £385,000, the body immediately advertised for a replacement.

This constitutes a particularly disastrous grasp of the money-saving concept.

The real concerns
It's a joke - particularly given that the National Audit Office was set up to ensure government departments and quangos were offering value for money. It goes to show that the office wouldn't recognise value for money if it jumped up and bit it in the backside. All it can see is red tape, rules and regulations. Following the rules has completely overtaken the notion of cutting back on spending.

This does not bode well for the fact it will be involved in ensuring that the redundancy deals struck by other departments will constitute value for money - presumably anything below £1 million will be considered an absolute bargain.

It's an expensive mockery of the principle of cost cutting. Of course, we have come to expect no less from our government.

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