UK Spending Watchdog Exposes £6.6bn Loss from Cancelled Government Projects
Parliament’s spending watchdog has found that government departments lost £6.6bn in the 2024-25 financial year due to cancelled projects, write-offs, and fraud, with the Ministry of Defence accounting for the largest share.
The UK Public Accounts Committee has reported that government departments lost £6.6bn in the 2024-25 financial year due to cancelled projects, write-offs, and fraud. The Ministry of Defence incurred the largest loss at £1.6bn, followed by the Department for Transport at £472m for cancelling road projects including the Stonehenge tunnel, and the Home Office at £290m for the scrapped Rwanda deportation scheme. The committee criticised the waste as a sign of complacency, while the Treasury defended the cancellations as necessary value-for-money decisions following the change in administration.
The cross-party group of MPs, assisted by the National Audit Office, analysed spending across 17 main government departments and identified significant losses stemming from write-offs, debts no longer pursued, and the cancellation or retirement of assets. Labour MP Clive Betts, deputy chair of the committee, described the figures as “egregious” and a result of government complacency. He stated that those who pay their dues should be aggravated by the loss, adding that high levels of fraud and waste are not the cost of doing business but the cost of complacency.
The Ministry of Defence recorded the largest single loss of £1.6bn, attributed to retiring assets and policy shifts following the change in administration to a Labour government in July 2024. The Treasury defended these cancellations, with permanent secretary James Bowler noting that write-offs can occur due to differing objectives between administrations. Bowler argued that there is a value-for-money trade-off, stating it is not always right to complete a project once started, even if initial approval had been given.
The Department for Transport lost £472m from cancelling eight road projects, including the A303 tunnel under Stonehenge. The Home Office lost £290m due to the cancellation of the Rwanda deportation scheme, which was scrapped by the new government. A Treasury spokesperson emphasised that the government took the decision to end the Rwanda scheme and cancel unaffordable road projects to protect public finances, asserting that every pound of taxpayers’ money must be spent with care.
Beyond project cancellations, the report highlighted persistent issues with fraud and compensation debts. The Department for Work and Pensions recorded £9.3bn in overpayments due to fraud and errors, a figure the PAC noted has persisted for 36 years. The total government compensation debt reached £73.4bn by the end of the previous financial year, an £11.8bn increase on the prior year. The committee urged the Treasury to take action to reduce fraud, stating that such high levels should not be regarded as inherent features of government systems.