MPs have expressed significant concerns about the newly-formed Office for Value for Money (OVfM), warning that it is understaffed, poorly defined and will struggle to have a meaningful impact.

The OVfM was established by Chancellor Rachel Reeves in the 2024 Autumn Budget to “provide targeted interventions through the multi-year Spending Review” and make “recommendations for system reform”. Both objectives are intended to root out waste and inefficiency. 

However, a report published by the Treasury Select Committee this week warns that a lack of resources, a very short lifespan and high risk of duplication has left MPs on the Treasury Committee sceptical about the OVfM achieving its objectives. 

OVfM Chair, David Goldstone CBE, is contracted for just a year and in December the unit had only 12 full-time members of staff, prompting questions about its likely meaningful impact on driving efficiencies in departments. 

Clear risk of unnecessary duplication

The Committee also highlights significant overlap with existing mechanisms to ensure value for money across public spending decisions. It points to seven examples of organisations, teams and processes that are just a selection from the bodies already working on value for money across Whitehall.

The report warns there is very little information on which parts of government the OVfM will work with, how it will scrutinise departments’ investment proposals and who is responsible for evaluating OfVM’s effectiveness. The Committee is calling on the Treasury to publish those details, alongside an estimate of how much the government will spend on the OVfM, including any use of external consultants. 

‘Vague remit’

Chair of the Treasury Select Committee Dame Meg Hillier MP says: “Our Committee has concluded the Office for Value for Money is an understaffed, poorly defined organisation that has been set up with a vague remit and no clear plan to measure its effectiveness. All of which leads me to feel this initiative may be something of a red herring.

“The Treasury needs to share far more information about what this small team will actually achieve for the taxpayer that cannot be done elsewhere. It must also be transparent about how it will operate and how it will assess its effectiveness.”

Alison Ring OBE FCA CPFA, Director, Public Sector and Taxation at ICAEW, says: “Rigorous assessment of spending proposals in advance of money being spent combined with post-spending evaluations should help departments to improve both outcomes and cost-effectiveness. 

“I had hoped that the OVfM might overcome the traditional departmental silos that make it difficult to work effectively across government, as well as actively driving delivery. But the Treasury Select Committee’s report shows low expectations for the OVfM role, which is extremely disappointing.”

• Read the Treasury Select Committee report here.