Innovation is vital to achieve public sector savings, says Hammond

25 Jun 09
The public sector must develop a culture of innovation to cut costs while improving services as spending is squeezed, the shadow chief secretary to the Treasury has said In yesterday’s guest lecture, delivered the day after the Conservative MP was elected as the new Speaker of the House of Commons, Parris said Bercow was ‘on probation’ and would face some significant challenges in his first months

By Tash Shifrin

25 June 2009

The public sector must develop a culture of innovation to cut costs while improving services as spending is squeezed, the shadow chief secretary to the Treasury has said.

Philip Hammond told delegates at the CIPFA conference in Manchester today that the Conservatives would challenge ‘the bogus assumption that less cost means poorer outcomes’.

The public sector faced ‘the challenge of sustaining and improving public services while cutting the cost of delivery’, he said. ‘I believe we need... an approach which is based on the concept of innovation, a bottom-up approach.’

Hammond attacked the government’s economic record, warning of ‘the real possibility of a debt trap’. And he told delegates: ‘The end of the recession does not mean business as usual because Britain’s fiscal imbalance will not correct itself.’

But the second in command of the Tories’ Treasury team remained cagey about how his party aimed to reduce the government deficit – although he reiterated that ‘the brunt of the burden is going to have to be borne by public spending’.

Hammond added: ‘Anyone with a calculator and a copy of the Budget Red Book can work out the implications of the fiscal crisis themselves.’

He also promised ‘a new culture of financial discipline in Whitehall’, telling delegates: ‘We will redefine the role of the finance director in government departments as the second most important post.’

The Conservatives would also ‘restore to the Treasury its traditional role as guardian of taxpayer value and the driver of financial discipline’. Current Treasury spending areas, such as tax credits, would be transferred to the Department for Work and Pensions.

But spending rounds ‘won’t simply be a matter of Treasury diktat’, Hammond said. Instead, the Cabinet as a whole would be responsible for spending decisions.

He also promised that ‘all items of public expenditure over £25,000 will be published on the internet for public scrutiny’.

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