09 April 2004
Senior backbench MPs have expressed doubts that Gordon Brown will find £20bn a year in efficiency savings by 2008.
The Commons' Treasury committee endorsed the chancellor's plans to slash Whitehall bureaucracy and cut 40,500 jobs to free billions of pounds for frontline services, outlined in his Budget statement last month.
But in a report, published on April 6, the committee called for clear explanations of where the £20bn would come from. 'Given the long history of public sector efficiency targeting, there is clearly an issue of how certain it is that the envisaged savings will be achieved,' it said. 'The House… will wish to see clear indications in the Spending Review as to how the savings are to be made and their achievement measured.'
Brown told Parliament that all departments would have to find annual efficiency savings of 2.5% over the 2005-2008 Spending Review period.
But the committee highlighted evidence from officials revealing that a 2.5% efficiency savings target set for the Treasury in a previous Spending Review had been dropped, partly because of difficulties with quantifying gains.
MPs also warned that departments that failed to meet the targets risked having their budgets squeezed, while those that were too zealous risked compromising the quality of their services. 'It is clear that the efficiency savings target is challenging and leaves little room for manoeuvre,' they said. 'Whether increases in expenditure on frontline public services are to match those of recent years will depend on the success of the government's efficiency programme.'