The UK government's habit of cancelling major projects after spending significant sums has cost taxpayers £6.6 billion in the last financial year alone, according to a damning report from parliament's public accounts committee (PAC).
Key Findings on Government Waste
The cross-party committee said successive governments had a 'particularly egregious' record of poor value for money. The deputy chair, Labour MP Clive Betts, described the losses as a sign of 'complacency' that should anger hardworking taxpayers.
The Ministry of Defence was the most wasteful department, incurring £1.6 billion in losses by cancelling projects. The Treasury attributed this largely to retiring assets or policy changes after the Labour government took office in July 2024.
High-Profile Cancelled Schemes
The Home Office lost £290 million on the Conservatives' Rwanda deportation scheme, which Labour scrapped. The Department for Transport wrote off £472 million from cancelling eight road projects, including the planned A303 tunnel under Stonehenge.
Betts said: 'At a time of such straitened financial circumstances for so many, we should never, ever be satisfied with time or money wasted at no benefit to the public. Yet here our report finds £6.6 billion last year simply boiled off into the atmosphere as a loss.'
Compensation and Fraud
The report also revealed that government compensation schemes owed £73.4 billion by the end of the last financial year, an increase of £11.8 billion. While the committee did not question the validity of these schemes, it raised concerns about whether value for money had been properly considered in their design.
Fraud was another major factor. The Department for Work and Pensions has seen persistent fraud and errors for 36 years, with overpayments reaching £9.3 billion in its most recent accounts, excluding the state pension. The PAC said this 'enormous figure has been accepted for far too long' and called for Treasury-led action.
Government Response
James Bowler, permanent secretary at the Treasury, told the committee that write-offs could occur when governments change and priorities shift. He noted that there is a 'value for money trade-off' and that projects once started should not always be completed.
A Treasury spokesperson said: 'We will never tolerate fraud, error or waste - every pound of taxpayers' money must be spent with care. That is why this government took the decision to end the Rwanda scheme and cancel unaffordable road projects to protect the public finances.' The government will provide a formal response to Parliament in due course.
