23 April 2004
Gordon Brown's plans to make £20bn a year in efficiency savings by 2008 look shaky after official figures showed that Whitehall's administration costs last year went more than £1bn over budget.
Statistics published by the Treasury on April 19 reveal that government departments spent £21.3bn on administration in 2003/04, an increase of 11.7% on the previous year. But the government had planned to spend only £20.2bn.
The pay bill has also risen substantially, by 9% from £10bn to £10.9bn. This is partly the result of 11,400 new full-time equivalent posts, which increased the total by 2.5% to 471,500.
Both Labour and the Conservatives have pledged to slash waste and bureaucracy to free billions of pounds for frontline services.
Senior mandarin Sir Peter Gershon is due to report the findings of a wide-ranging efficiency review in time for July's Spending Review. But Brown has already said all ministries will have to find savings of 2.5% a year between 2005 and 2008.
Administrative costs, which last year represented 4.6% of total government expenditure, are to be frozen in cash terms between 2006 and 2008, reducing them to 3.7% of public spending.
But the latest statistics, set out in the Public Expenditure Statistical Analyses, illustrate the scale of the task facing Whitehall departments.
Shadow chancellor Oliver Letwin, who has pledged a Tory government would save £35bn a year by 2011, said the administration costs were an indictment of the government.
He added: 'This ought to be the most controllable item in government spending. In practice, it is clearly out of control, with the growth rate twice that anticipated.'
PFapr2004
