MPs have rejected claims that spending £35m to reduce the burden of regulation on employers could yield a 50-fold return.
A House of Commons Public Accounts Committee (PAC) report states that the figures were based on unreliable estimates.
In 2005, the government launched the Administrative Burdens Reduction Programme with the Better Regulation Task Force, claiming it would lead to a £16bn increase in gross domestic product (GDP).
However, the MPs say that this figure was based on a similar exercise in Holland – before any evaluation of that scheme had been carried out.
They also said that the taskforce based its £20bn estimate of the burden on small samples and “non-random sample selection”.
The report concluded: “The Better Regulation Executive set the target for most departments to reduce burdens by 25% by 2010 without assessment of what was achievable in each case.”
It took 700 workers at consultancy PricewaterhouseCoopers to measure the cost of the administrative burden on government departments, at a cost of £2,000 per staff interview, the PAC said.