- Government departments wrote off £6.6bn in failed spending during the last financial year.
- The Rwanda deportation plan and Stonehenge tunnel project were among the biggest cancelled schemes.
- MPs warned fraud, waste and abandoned projects are becoming too common across Whitehall.
British taxpayers are carrying the cost of billions of pounds lost on abandoned government projects, after Parliament’s spending watchdog warned that repeated policy reversals and weak financial controls are draining public money across Whitehall.
A report from the Public Accounts Committee (PAC) found government departments wrote off around £6.6bn during the 2024-25 financial year alone. The losses covered spending that failed to deliver its intended purpose or produced no value for taxpayers, according to the committee.
The findings place fresh focus on UK government spending, taxpayer waste and cancelled infrastructure projects at a time when public finances remain under pressure and departments face growing scrutiny over how money is being managed.
The PAC, working alongside the National Audit Office, examined accounts across 17 major government departments and found some of the largest losses came from cancelled projects, abandoned assets, unrecovered debt and fraud-related write-offs.
Among the most high-profile examples was the Conservatives’ Rwanda deportation scheme, which the Labour government scrapped after entering office in July 2024. The Home Office recorded a £290m loss linked to the cancelled policy.
The Department for Transport also reported a £472m hit after axing eight road schemes, including the proposed A303 tunnel near Stonehenge, a project that had faced years of environmental opposition and political debate.
Meanwhile, the Ministry of Defence emerged as one of the departments with the biggest losses overall, writing off £1.6bn during the year. The Treasury reportedly said in a news report that much of this related to retired assets and policy changes following the change in government.
‘Money boiled off into the atmosphere’
Clive Betts, Labour MP and deputy chair of the PAC, reportedly said in a news report that taxpayers had every reason to be frustrated by the scale of the losses.
“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,” he reportedly said.
Betts added that £6.6bn had effectively “boiled off into the atmosphere” through cancelled projects and shifting political priorities.
The committee described the repeated cancellation of projects after large sums had already been spent as a “particularly egregious” example of poor value for money. MPs also warned against treating fraud and waste as unavoidable parts of running public services.
The report pointed to long-running problems at the Department for Work and Pensions, where fraud and administrative errors have reportedly persisted for 36 years.
The department recorded £9.3bn in overpayments in its latest accounts, excluding the state pension. The PAC said it was “not at all persuaded” that such losses should simply be accepted as normal within government systems.
Compensation bill climbs past £73bn
The watchdog also highlighted the growing cost of government compensation schemes, with liabilities reaching £73.4bn by the end of the last financial year. That figure was up by £11.8bn compared with the previous year.
While the committee said it was not questioning whether compensation schemes themselves were necessary, MPs raised concerns over whether enough attention had been paid to long-term value for money when designing them.
James Bowler, permanent secretary at the Treasury, reportedly said in a news report that write-offs can happen when governments change and priorities shift.
He reportedly told the committee that there is sometimes a “value for money trade-off” involved, arguing that continuing every project regardless of changing circumstances may not always be the right financial decision.
A Treasury spokesperson defended the decision to cancel the Rwanda scheme and several road projects, saying the government would “never tolerate fraud, error or waste”.
The spokesperson reportedly said the projects were dropped to help protect public finances, adding that the government would provide a formal response to Parliament in due course.
