The government does not have the ability to measure IT costs accurately. even though it has been trumpeting  multi-billion pound IT savings. That is the verdict of the Treasury Select Committee, which insisted the government must improve its accounting of efficiency savings if it is to make meaningful change to IT costs.

In a powerful report, Evaluating the Efficiency Programme, the committee lambasted the government for last year adding £5 billion to its own £21.5 billion Gershon savings target, without clear plans. That target included steps such as overhauling IT, other operational improvements, and the relocation of staff.

The increase was "a figure chosen by ministers without prior consultation with the relevant departments", the committee said in a damning indictment of government planning skills.

"As such, it does not inspire confidence," the committee added.

It also highlighted concerns that the National Audit Office had not even checked the achievements at that point against the original £21.5 billion targets, before announcing new plans.

It was vital that the government took a more accurate approach, with savings properly quantified and audited, the committee stated. The government needed "robust" data collection procedures to accurately measure savings from the start.

The Whitehall procedure "time and time again", of establishing these systems well after the efficiency programmes have already begun, was "illogical", the committee stated.

Sub-committee chairman Michael Fallon MP said that proper measurement of the benefits was vital "now that the level public debt has reached such gargantuan proportions".

The committee also queried the latest plans, including the Operational Efficiency Programme announced in April. That programme, designed by ex-Logica chief executive by Martin Read, aimed to carve £7 billion from IT costs.

The committee said the savings presented notable challenges. An examination of the targets, by accountants PricewaterhouseCoopers, said that the government needed to simplify and standardise processes, and improve cooperation between departments.

Traditional tactical efficiency savings "would not provide the required results", the committee noted.

"We question whether the necessary structures are in place to facilitate such co--operation and require the government in its response to this report to outline the practical steps taken to date," it added.

Throughout all of the savings programmes, it said, maintaining staff morale was vital. This had become a significant problem at HM Revenue & Customs, where only 16 per cent of staff where "satisfied" with the department last year.

Staff were struggling under the pressure to do more with less, as service quality fell and jobs remained uncertain, the report said.

It was important that staff are "encouraged to feel proud at increasing the efficiency of their department, rather than living in a climate of fear and uncertainty", the committee noted. It said it wanted to see more evidence that management took the issue "seriously".