NAO sets out its expectations for public bodies on managing staff costs
The National Audit Office has issued a framework setting out its expectations for how central government organisations should manage staff costs in a period of spending reduction in public services.
Split into four parts, the framework – which builds on the watchdog’s guide to structured cost reduction – tackles:
- Identifying and appraising options for staff cost reduction
- Planning staff cost reduction
- Delivering staff cost reduction
- Embedding a business as usual approach to staff cost management.
The first three parts are intended to cover specific cost reduction programmes, ranging from the small scale covering efficiencies within existing activities to much broader change programmes. The NAO addresses approaches for identifying cost savings, but does not provide guidance on implementing them.
The fourth part relates to the watchdog’s expectations for ongoing activity around staff cost management.
The NAO highlighted the importance of strong management information to the framework and decision-making generally.
It said: “We recognise that constraints and barriers exist that may make it difficult or even prevent central government organisations from applying these principles in some instances.
“These include the tensions between shorter term pressures to deliver savings in the current financial year, and the longer term investments in organisational change and IT systems required to provide the platform for fundamental service reform. However, ongoing staff cost management, including having robust systems, information and controls in place, will ensure that organisations are better placed to respond to such challenges.”
