The Department for Culture, Media and Sport (DCMS) has "improved the maturity" of its financial management, according to a new National Audit Office (NAO) report.

In its report, the spending watchdog said the department had shown 'good' management of finances in its Olympic programme that should be replicated across its entire remit. However, the NAO also found that the DCMS had taken the decision to merge or axe arms-length bodies without full consideration of the costs involved.

A total of 19 DCMS quangos are to be shut or reformed, although the move was not guided by a financial analysis of costs such as lease cancellation, redundancy and pension costs. The NAO said the department had applied a "standard flat-rate cut" to the budgets of most quangos, but is currently unable to assess the final impact of the measures.

NAO head Amyas Morse said: "Some decisions have been made based on insufficient financial information and analysis, as exemplified by the decisions to merge and close some arms-length bodies. "This can leave organizations exposed and unprepared for the future and lead to high overall costs or the displacement of costs elsewhere."

The NAO did, however, welcome the prioritisation of quick decisions that enabled quangos to plan cost reductions early, but still has more to do before achieving "value for money".