Reeves to press ahead with Value for Money office despite ‘risking taxpayer cash'

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12-03-2025

Rachel Reeves is set to push ahead with controversial plans to create an Office for Value for Money (OVfM) despite warnings from MPs that it risks wasting taxpayer money.
The Chancellor is forging ahead with the new taxpayer-backed body in the hope it will help the Government root out £4bn in cost savings a year.
The Treasury said in a report on Tuesday that the OVfM will begin by prioritising how to stem the spiralling costs of housing asylum seekers, while also scrutinising spending on so-called 'mega-projects'.
It comes after the Treasury Committee criticised the plans in January over fear the unit will not have a 'meaningful impact'.
Labour's Dame Meg Hillier, warned at the time that OVfM 'has been set up with a vague remit and no clear plan to measure its effectiveness', describing it as an 'understaffed, poorly-defined organisation'.
In response to the committee's criticism, the Treasury said even small improvements in the budgets for mega projects had the potential to create 'significant savings' for the public purse.
It said the OVfM also has the potential to cut the billions of pounds spent on temporary accommodation for asylum seekers.
The Home Office paid out £2.3bn on hotels and short-term accommodation for asylum seekers last year, while local authorities paid out a further £1.6bn, the report said.
The new cost-cutting unit will have a staff of around 15 officials between offices in London and Darlington and be led by David Goldstone, the former chief operating officer of the Ministry of Defence.
Mr Goldstone's appointment has already been mired in controversy after it emerged he will be paid £950 a day for chairing the body. On a full-time basis, his pay would be equivalent to a salary of £247,000 a year.
In his new position, Mr Goldstone will also continue to hold his seats as a non-executive director on the boards of the Submarine Delivery Agency and HS2. However, conflicts of interest rules mean he will be required to recuse himself from discussions with the boards of either organisation.
Mr Goldstone is set to work at the OVfM on a part-time basis for an initial 12-month period, providing private advice to the Chancellor and Chief Secretary to the Treasury.
In response to the Treasury's report on Tuesday, Dame Hillier said: 'As always with these initiatives, the proof of the pudding will be in the eating, but we will closely hold the Treasury to the letter and spirit of the transparency commitments made today.'
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