If the NAO is calling for government innovation, you know it’s bad
Everyone thinks government should be more innovative, but the NAO saying it means Labour really has dithered, writes Eliot Wilson
“Government can use innovation to make faster gains” is not the most radical statement ever made; indeed, it has become a commonplace in Whitehall, a slogan repeated by ministers and would-be ministers without thinking to show that they are in tune with the pace of the outside world. But when it is stated by the head of the National Audit Office (NAO), it takes on rather more weight.
Last week, Gareth Davies, comptroller and auditor general of the United Kingdom, addressed Members of Parliament and civil servants on two major issues for the coming year, productivity and resilience. His argument was straightforward: the state needs to work better, exploit its assets more effectively and adapt to change more quickly. In addition, it needs to do this while managing risk and protecting itself from external threats.
Has Labour achieved anything so far?
Davies pointed to areas where there are obvious failures. The NHS is plagued by “rising demand and costs, alongside unsatisfactory outcomes”, as is provision for children with special educational needs (the latter was the subject of a NAO report last October). He underlined the breadth of change needed, from using new technology like artificial intelligence to organising employees so that they use and develop their skills most effectively.
At least superficially, he is preaching to the choir. The Prime Minister and his cabinet colleagues never fail to talk about its Plan for Change, and emphasise that the kind of reforms needed will not be achieved simply by more public expenditure.
“We know we cannot simply tax and spend our way to better public services and delivery of these milestones, nor will we pursue them at any cost. That is why our focus will be on reform to ensure that we are delivering these milestones efficiently and through the best use of taxpayer money.”
However, seven months into the government’s life, announcements still outnumber concrete achievements. The armed forces await the publication of the Strategic Defence Review, the NHS 10-Year Plan for Health is still being drafted (Wes Streeting has only just appointed a senior official to contribute to the process) and a consultation is underway on changes to the National Planning Policy Framework. With Labour’s first major test of public opinion since the general election approaching in May’s local elections, ministers need to be aware that the benefit of the doubt is a dwindling resource.
What is the NAO?
The NAO has considerable authority to hold the government’s feet to the fire. It is an independent body, the comptroller and auditor general is an officer of the House of Commons, not a civil servant, and its work supports the Public Accounts Committee (PAC), a body which rarely shies away from robust criticism. The PAC is always chaired by an opposition MP, currently veteran Conservative Sir Geoffrey Clifton-Brown, and is conscious of its status as a stern-but-fair watchdog of public expenditure.
Ultimately, though, the NAO can only pass judgement on past activities and forward planning. The Chancellor of the Exchequer, Rachel Reeves, established an Office for Value for Money in last October’s Budget to “to root out waste and inefficiency… scrutinising investment proposals to ensure they offer value for money”. As I pointed out recently, however, it is a tiny organisation – it employs 12 civil servants to the NAO’s 1,000 staff – and has a time-limited mandate.
Do we need our own DOGE?
Davies was asked after his speech if he would seek to emulate the Department of Government Efficiency (DOGE) in the United States, Elon Musk’s freewheeling but slapdash advisory body to President Trump. He replied that he was “open to learning from anything”.
“Let’s see what happens and what to learn from it. If it is possible to make very big savings whilst delivering the government’s priorities, then of course we should be interested in how that’s being done,” he said.
The NAO chief should be cautious. Musk’s frenetic and pugnacious activity is driven as much by personal animus and a principled dislike of central government than a clear-eyed assessment of where inefficiency is rife. Davies’s task is different, and twofold. On the one hand, he must take advantage of the NAO’s reputation for painstaking and fair-minded rigour. In doing so, he must also find a way to make sure that ministers translate their radical words into action.
By the time of the next election, Whitehall must look and feel different: more agile and dynamic, more willing to take risks, making better use of technology and learning the lessons of failure more rapidly. To reach that point will frequently be unpopular and always demanding, but ministers have no alternative. They have a great deal to prove, but the NAO offers not just a critique but potentially a benchmark. If they fail to reach it, the judgement of the electorate will, rightly, be harsh.
Eliot Wilson is a writer and strategic adviser