Taxpayers hit by pounds 2.5bn bill for blunders: Audit office reports reveal catalogue of waste

THE GOVERNMENT is wasting more than pounds 2.5bn a year - the equivalent of 1.5p in the pound on income tax or the amount to be raised by imposing value-added tax on domestic fuel.

An analysis by the Independent of reports this year by the National Audit Office, the public spending watchdog, reveals an annual wastage total of pounds 2.63bn. By far the highest proportion, pounds 1.5bn, came from a sudden, unaccountable rise in the cost of the motorway widening programme. From 1989 to 1992, the estimated bill for building extra lanes was pounds 3.4bn. During 1992-93, it shot up, to pounds 4.9bn.

Other areas of wastage in the NAO's 50 'value for money' reports, and nearly 500 sets of accounts of government departments and other public bodies in the past 12 months, included an over-expenditure by the Benefits Agency of pounds 465m. None of that money, which was paid to people on income support, is thought to be recoverable.

The figures will prove an embarrassment to a government that prides itself on sound financial management and the Opposition will question whether increased competition in the public sector has undermined individual accountability by government departments.

Early in the new year, the Commons Public Accounts Committee will scrutinise the overruling of the Overseas Development Administration by the Foreign Office that led to the granting of pounds 234m of state aid to the Pergau hydro-electric project in Malaysia. It was described as 'a very bad buy' by the NAO.

According to the audit office, up to pounds 60m was spent by general practitioners on repeat prescriptions that may not be fully used. The Department of Employment lavished pounds 48m on a computer system for the Training and Enterprise Councils that, said the NAO, was 'only a partial operational success'.

Staff at the Inland Revenue ran up a sick pay bill of pounds 37m - excessive, said the office. Four projects at the British Antarctic Survey exceeded estimates by pounds 24m.

Some of the errors were simple, but costly. Failure by the Government to keep a proper check on who was using its telephones led to unnecessary expenditure of pounds 15m, while the Forestry Commission felled trees at the wrong age - and wasted pounds 10m.

Audit office sources singled out Peter Lilley's Department of Social Security as one of the worst offenders. By contrast, the Ministry of Defence, a big-spending department heavily criticised in the past, appeared to have improved.

Sir John Bourn, audit office head, said the wastage figure illustrated the need 'to maintain the highest standards of probity and ensure the proper conduct of public business'. He said that while the office must not inhibit the changes taking place in the Civil Service and the opening up of the public sector to private business, its work 'also provides a safeguard, a check, that devolution of responsibility does not diminish accountability, and that public money is still spent properly and wisely'.

Recent scandals at the Welsh Development Agency and West Midlands Regional Health Authority, said Sir John, emphasised the 'distinctive nature of public sector operations'.

Terry Davis, MP for Birmingham Hodge Hill and a member of the Public Accounts Committee, said last night: 'What worries me is that these figures are just the tip of the iceberg. They show a scale of savings that could be achieved if we had a government that was determined to get value for money.'

pounds 1.5bn: Motorway widening pounds 465m: Income Support pounds 234m: Malaysia power plant pounds 60m: NHS prescriptions pounds 48m: Computer systems pounds 37m: Sick pay pounds 24m: Antarctic Survey pounds 15m: Government phones pounds 10m: Felling wrong trees