14 May 2004
Business leaders have expressed scepticism about government plans to slash £20bn off the cost of running Whitehall, describing proposals as 'crude', and claiming that ministers could 'spin' success stories to obscure analysis of the target.
The CBI business lobby, which represents many of the private sector firms used to deliver public service improvements, also warned ministers against crude cost-cutting measures and 'cosmetic reform'.
The comments came in the CBI's submission to the Treasury-led Whitehall efficiency review, the study by Sir Peter Gershon that will inform Chancellor Gordon Brown's Spending Review in July.
Brown has already outlined plans to slash 5% off administration costs at every department by 2008, as well as broader efficiency savings of 2.5% at each. More than 42,000 civil service posts have already been earmarked for termination.
Leaked details of Gershon's interim findings suggest the government will seek efficiencies totalling £20bn by 2008, to free resources for frontline public services.
But the CBI submission states:'[We are] concerned that the focus and structure of the current review process not only puts in doubt the attainment of the £20bn annualised efficiency target by 2008 but prevents the public sector from realising even greater substantial efficiency gains in the medium term.
'To date, it is not clear how the government intends to realise the full value of the £20bn gain, with only a fraction of this total currently identified as a cash realisable saving.'
But CBI director general Digby Jones later acknowledged that, with the right approach, efficiency gains above £20bn could be met in the longer term.
The CBI's attack was dismissed by the Treasury, which claimed that the number of job cuts promised by the government indicated that ministers were 'thinking radically' about meeting the target by 2008.
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