Government departments have been set a series of targets for implementing efficiency gains of £21.5 billion a year by 2007-08, as part of the Treasury's Efficiency Programme following on from the Gershon Review of public sector efficiency. This NAO report finds that considerable progress has been made by departments towards achieving the efficiency targets, and the Efficiency Programme has ensured a greater focus on value for money issues among senior staff. Progress has also been made in addressing measurement issues, supported by new guidance issued by the Office of Government Commerce, although some reported efficiency gains still carry a significant risk of inaccuracy. The OGC has also initiated a new reporting system to improve the accuracy of reported efficiency gains, but this would benefit from a greater review process to assess whether they meet good practice, either through a stronger internal audit within departments or by the OGC. Departments must improve the transparency of the reporting process, and do more to encourage staff to put forward ideas for efficiency improvements. A companion volume is available separately (HCP 156-II, session 2006-07, ISBN 9780102944372) containing twelve opinion pieces on options to improve efficiency in the public sector, written by commentators from the fields of business, trade unions, academia and management consultancy.