12 March 2004
Tories find savings 'in excess' of £35bn
The Conservative Party's review of waste and bureaucracy in the public services has already identified savings 'significantly in excess' of the £35bn-a-year target set, Oliver Letwin has told Public Finance.
The shadow chancellor revealed that David James, the top business troubleshooter hired to lead the search for efficiency gains, has already surpassed the target set out in a major speech last month.
Letwin used that address to the Bow Group to commit the Tories to slashing government spending from 42% to 40% of gross domestic product, equivalent to a saving of £35bn a year, by 2011.
But, speaking to PF at the Tories' Spring Forum in Harrogate on March 6, Letwin said he had no doubt that his plans were achievable, opening up the possibility that he may go even further.
'We will certainly find savings that will enable us to implement these plans,' he said. 'In fact, David has told me that he has already identified savings significantly in excess of what we've described.'
Excessive bureaucracy and regulation and a 'top-heavy' government machine are all prime targets for James. The revelation gives a future Conservative government the option of imposing even tighter limits on the growth in public spending.
But the shadow chancellor, who would not be drawn on where James had found the additional savings, was keen to stress that spending curbs would not be delivered at the expense of services. He said: 'I am confident that we can find savings without affecting frontline services.'
Letwin believes James' search for waste and bureaucracy can yield substantially bigger savings than the government's own efficiency review, being conducted for the Treasury by top mandarin Sir Peter Gershon, because his brief goes much wider.
'There is a range of functions that the government currently carries out that they don't need to. There will be things we want to do in the private sector that are currently done in the public sector,' he said.
Letwin was circumspect about the precise parameters of the James review. But the admission that he has 'considerable sympathy' with the Liberal Democrats' plan for 'radical surgery' to the Department of Trade and Industry gives a glimpse of their potential reach.
And he made it clear that the ultimate aim of the James review enshrines a long-standing Tory concern. 'The savings will be sufficient to avoid Labour's third-term tax rises and, secondly, to reduce significantly the burden of taxation,' he said.
Howard outlines public sector reform programme
The shape of public services reform and the role of the state will be the key battleground in the next general election campaign, according to Conservative Party leader Michael Howard.
Howard used his first conference speech as leader to tell the 1,500 delegates that this was the 'fundamental difference' between the parties and that the next election represented a 'historic choice' for voters.
'It is a choice between top-down public services that are failing and a new approach that will give people more control,' he said.
Howard accused Chancellor Gordon Brown, and by extension the government, of being 'a tax and regulation junkie' who had failed to deliver the promised improvements to public services.
Instead, Howard pledged, the Tories would 'let the sunshine of choice break through the clouds of state control'.
The previous day, shadow public services secretary Tim Yeo unveiled the major policy initiative of the conference: the expansion of the party's planned 'passport schemes' in education and health.
Yeo announced that, in education, the voucher scheme allowing parents to buy their child a place at the school of their choice would be rolled out across England and Wales. Previously, it would have been piloted in inner-city areas.
In health, plans to allow patients to take 60% of the cost of their NHS procedure to put towards private treatment would cover a wider range of conditions, including chronic illnesses such as diabetes or kidney disease.
Curry raises doubts over 'silos of democracy'
Shadow local government secretary David Curry has voiced his concerns about moves towards a wider range of directly elected bodies to run local services.
Speaking at a fringe event organised by Citizens Advice and the New Local Government Network, Curry said he was 'conscious of their practical problems'.
He highlighted the struggle all political parties have currently to find enough candidates to stand in local elections, and asked where responsibility for strategic decisions would lie if 'little silos of democracy' were created.
Curry also confessed to having 'grave doubts' about his party's pledge to set up directly elected police boards. 'I fear that they will be a sitting duck for the chief constable to demand more and more public money.'
But he backed directly elected mayors, arguing that even if the Tories did not capture many authorities themselves, it was likely that Labour would lose quite a few.
'This is “let 1,000 flowers bloom” territory for us and we should be sponsoring it more effectively,' Curry added.