Reeves axes £600k ‘cost-cutting’ taskforce after just one year
‘Gimmick’ to root out wasteful government spending paid chief £950 a day
Labour’s cost-cutting quango is set to be scrapped just one year after being unveiled, The Telegraph understands.
The Office for Value for Money (OVfM) was formed in 2024 to assess government spending, identify inefficiencies and scrutinise investment proposals to safeguard taxpayers’ money.
In that time the chairman, David Goldstone, was paid £950 a day and expected to work a monthly average of one day a week.
Mr Goldstone also could not give advice on HS2 and the development of the Royal Navy’s new Dreadnought submarines due to conflicts of interest – despite both projects having huge cost overruns.
The OVfM was always planned to have a lifespan of at least one year, a Treasury official said.
Documents published last year stated Mr Goldstone’s remit of providing spending advice to Rachel Reeves came with the “possibility of extension” – but the official confirmed there would be no such extension.
The OVfM was formed in October last year and will be shut down around the same time this year.
The closure comes after a damning report by MPs in January criticised the newly-formed taskforce and asked it to justify its cost to taxpayers.
When the OVfM was launched, Labour said the independent body would conduct assessments of “where and how to root out waste and inefficiency” and scrutinise Whitehall spending with a “ruthless focus [on] realising benefits from every pound of public spending.”
Bob Blackman, a senior Conservative MP, said: “This was a gimmick to start with and it’s not surprising it hasn’t gone anywhere. When they are looking for dramatic savings, not wasting money might be a good idea to start with.”
Sir Jacob Rees-Mogg, the former business secretary, said: “It seems to me to have achieved nothing in a year so perhaps it is at last achieving value for money by being shut down.”
A Treasury review is now under way into whether the OVfM lived up to expectations and represented value for money for taxpayers, with the findings scheduled to be published in October.
Labour outlined plans in April to cut dozens of quangos in an effort to reduce the size of the state. The announcement came after 27 new recommendation-making agencies were formed in the first eight months of Sir Keir Starmer’s time in Downing Street.
In January, MPs on the influential Treasury Select Committee published a report questioning whether the OVfM was a useful initiative, describing it as a “red herring”.
The cost to taxpayers of running the taskforce so far is £598,474, according to Treasury accounts published in March. This was less than its overall budget of £611,489.
Mr Goldstone was paid £23,000 as chairman in the financial year ending in 2025. His full remuneration package amounts to £49,400 a year. This is equivalent to a full-time salary of £247,000, or £950 a day, and significantly more than Sir Keir Starmer’s £166,786 salary.Dame Meg Hillier, the Treasury Select Committee’s chairman, said at the time that the OVfM was “an understaffed, poorly-defined organisation which 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,” she added.
The report recommended that estimates of how much the OVfM had cost the taxpayer be made public. It called on the quango to explain how it was working with existing Whitehall organisations and would avoid duplicating existing cost-cutting plans.
As of December, the OVfM had 12 full-time members of staff, not including Mr Goldstone. It had the power to hire as many as 20 officials and considered using external consultants to fill any gaps in expertise, according to the select committee report.
In its response to the report, the OVfM said it was “committed to transparency of its costs” and that there was no intention to hire any external consultants.
The OVfM has published studies with recommendations about budgeting for so-called “mega projects” like the Sizewell C nuclear plant and the procurement of short-term residential accommodation by the public sector.
Mr Goldstone was not involved in discussions that could be linked to his roles on the board of HS2 and as non-executive director the Submarine Delivery Authority – responsible for delivering the new Dreadnought-class submarine fleet – during his time at the OVfM, according to details of his employment published by the Government.
The costs of HS2, the delayed high-speed rail link between London and Birmingham, was initially projected to be £38bn but will now likely exceed £100bn. The updated submarine fleet is likely to spend its extra £10bn “contingency” funding on top of a £31bn budget, according to the House of Commons Library.
A Treasury spokesman said: “For too long, taxpayer money has been squandered, and we are putting an end to it. The Office for Value for Money is a unique, time-limited office based in the Treasury, with an independent chair, which has been working in partnership across government to place value for money at the heart of spending decisions.”
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