07 December 2007
Senior backbench MPs are calling on ministers to introduce independent audits of public service quality to ensure it does not suffer from the 'stretching and highly ambitious' efficiency targets set for the 2008/11 spending period.
The Treasury select committee, which published its report on the Comprehensive Spending Review on December 3, warned that the £30bn savings target took the search for efficiency 'to a new level'.
The MPs said savings should be recorded only where departments could demonstrate that service standards had, at the very least, been maintained.
'The government needs to commit itself now to a regular programme of independent and external audit of service quality, starting with benchmarking service standards in 2008, if public and parliamentary confidence in the nature of the new efficiency programme is to be maintained,' committee chair John McFall said.
'If so-called “efficiency savings” lead to a diminished service to the public or a reduction in product quality, they are simply “cuts”, not savings.'
The Treasury has set a 3%-per-year savings target for Whitehall departments and local authorities. In addition, some ministries will face real-terms cuts to their budgets from 2008.
The committee issued its warning because the government has changed its definition of what constitutes an efficiency saving. So-called 'non-cashable' gains, such as improvements in productivity, can no longer be included in the totals. In future, efficiencies must release cash to qualify.
'The Treasury is taking the efficiency programme to a new level, and making greater demands on departments, public bodies and local authorities,' McFall said.
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