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Structured cost reduction

Structured cost reduction. Overview of this presentation. Spending Review 2010 The NAO’s response to the spending review Principles of cost reduction Lessons from previous NAO work. Spending Review 2010. Most Departments have significantly reduced budgets

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Structured cost reduction

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  1. Structured cost reduction

  2. Overview of this presentation • Spending Review 2010 • The NAO’s response to the spending review • Principles of cost reduction • Lessons from previous NAO work

  3. Spending Review 2010 • Most Departments have significantly reduced budgets • It’s no longer enough to identify ‘efficiency savings’ • Departments must be clear on their priorities

  4. Spending Review 2010: Departments’ contribution to budget reductions (DEL)

  5. The challenge

  6. The NAO’s response • Independent auditors, not consultants • Financial audit: focus on internal controls • VFM: • examining examples of past cost reduction to draw out good practice • rolling programme of studies over the spending review period • principles of good practice

  7. Lessons learned from previous NAO work on cost reduction • Overall organisational approach • Risk management • Transition periods • Run-rate costings • Claimed savings must be backed up by financial data • Baselines

  8. Questions?eleanor.murray@nao.gsi.gov.uk

  9. Over to you… • Good examples of • Rethinking delivery models • Robust costing data • Whole organisation approaches • Anything else you think we should know about • What are the major challenges you’re facing? • In the next 3-6 months? • In the next 6-18 months? • Over the spending review? • What would you like from NAO?

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