Poor management of taxpayers’ money is costing billions of pounds, Labour’s Zero-Based review of public spending has found.

Labour’s Zero-Based Review, being led by Shadow Chancellor Ed Balls MP and Shadow Chief Secretary to the Treasury Chris Leslie MP, has uncovered a trend of over-payments and poor financial oversight of taxpayers’ money under this Tory-led government.

From benefit payments to Christmas bonuses, this government is failing in its stewardship of public funds and failing the British people.

Overpayments
- Overpayments by the Department for Work and Pensions have increased by £100 million since 2010/11 to £3.3 billion. A staggering £700 million of these overpayments were due to official error, rather than claimant error or fraud.
- £1.5 million of Common Agricultural Policy overpayments to farmers have been written off by the Rural Payments Agency.
- Duplicate payments of Christmas bonuses at DWP rocketed to over £1 million being wrongly paid out in 2012/13, up almost 70% from £636,000 in 2010/11.

Failure to control
- Clinical negligence liabilities have soared, with a rise of £466 million in the amount paid out by the NHS Litigation Authority under the Coalition.
- The hasty conversion of maintained schools to Academies has also resulted in 83 Trusts not returning their accounts to the department for scrutiny, meaning the government has no idea how £280 million allocated to these schools has been spent.
- Maladministration at the Department for Environment, Food and Rural Affairs resulted in a £20 million shortfall in funding from the EU in 2012/13 which had to be made up from taxpayers’ money by the department. Failure to improve administration and compliance with EU rules earned rebuke from the Comptroller and Auditor General, and the warning that “it is likely that the level of penalties finalised will increase again in future years”. (p.87 of 2012/13 annual report)

Fines & penalty payments
- Our Zero-Based Review has revealed that departments are putting taxpayers’ cash aside to pay for expected fines and the cost of legal challenges resulting from their failure to implement policy. At DEFRA, for example, £7.5 million has been diverted to pay an expected fine for failure to implement the Wild Birds Directive.

Error
- At the Department for Communities and Local Government £5.3 million was lost in 2012/13 due to European regional development money being spent on ineligible projects. The department has had to cover the cost of this error.
- £260,000 of penalty notices have been written off by the Home Office due to administrative error.
- Government mistakes resulted in £75,000 being written off by the probation service due to bookkeeping errors.

Chris Leslie MP, Labour’s Shadow Chief Secretary to the Treasury, said:

“From millions paid in error by the government to millions written-off by maladministration, this Tory-led government has utterly failed to keep control of costs. They haven’t got a grip of the academies budgets, and even hundreds of thousands have been squandered on duplicate Christmas bonus payments. No wonder the government is set to fail in its promise to balance the books by 2015.

“Labour’s Zero-Based Review of every pound the government spends is uncovering alarming examples of poor financial control just like these. Through this work we are exploring better ways to improve services, get maximum value for every pound of taxpayers’ money and rise to the challenge of delivering a long-term economic recovery.

“Taxpayers are already hard-pressed and the last thing they want is to see Ministers wasting millions of pounds of taxpayer’s money through negligence, error, and incompetence.”

Ends