26 January 2007
The Gershon efficiency drive has probably saved billions of pounds. But the government's reluctance to reveal just how this was done might undermine the programme's other aim of regaining public trust
Just before Christmas, the Treasury select committee held hearings on the Pre-Budget Report. In this, the government claimed it had achieved £13.3bn of efficiency savings under the Gershon efficiency programme.
In evidence to the committee, I pointed out that we seemed to have some sort of inverse law operating with regard to Gershon: the bigger the savings claimed, the less information was made easily available about how the figures were arrived at.
The following day, Treasury officials obligingly made this point for me by refusing to give the committee any details of how the £13.3bn had been arrived at, suggesting instead that the MPs trawl through the individual departmental performance reports for the information.
Just to rub salt into the wound, they did actually publish one of the breakdowns of the data the committee was asking for — in their supplement in Public Finance. This was obviously a scoop for PF, but not so good for parliamentary accountability.
In an effort to get at the truth, I put in a Freedom of Information request asking to see the Office of Government Commerce reports on the progress of the efficiency programme. No prizes for guessing that this was turned down on 'public interest' grounds.
Twenty years ago, a book appeared in the US entitled The search for government efficiency — from hubris to helplessness. This scenario is more like 'from hubris to hide-and-seek'.
The Treasury committee published its report this week. It certainly made interesting reading, albeit couched in the niceties of Parliamentary language. Even so, it has highlighted the way the Treasury has been so secretive about the Gershon data.
The purpose behind the efficiency drive was obviously two-fold. First, and most obviously, it was concerned with saving money. The context for this was a rapidly expanded public services sector post-1998 in which there was evidence of inefficiencies creeping into the system, for example, Office for National Statistics estimates of falling productivity in the NHS.
We leave aside the question of why the various 'strategic management' systems put in place by New Labour didn't catch these inefficiencies.
The material problem was simple — the growth in real-terms spending was going to come to a halt in 2008/09 and if more resources were to continue to be made available for frontline service delivery, they had to be squeezed out from elsewhere.
Hence the plan to 'save' £21.5bn over three years, the most ambitious efficiency programme ever. In contrast, Margaret Thatcher's early 1980s efficiency programme managed only about £0.6bn identified savings, and only half of these were realised in practice.
The second, and more profound, purpose to Gershon was to create, or recreate, trust in public service provision. The drive for efficiency was not just about saving money, it was about convincing the public that their (slightly higher) taxes were being well spent and not frittered away on perks and waste.
The implied deal was that 'we the government will maintain and even slightly increase the tax burden but you the public will get more, and more efficient, services'.
What is crucial to this second objective is that the public trust that real efficiencies are being made and their money isn't being wasted. This is very close to the 'public value' idea, that public services have to be efficient, effective and crucially trusted and legitimate to achieve real success.
This is where the government's secrecy and spin about the efficiency programme becomes so important.
No one I have talked to who analyses these things seriously believes that the government really has made £13.3bn worth of savings. But most of us do agree it has probably achieved the biggest single efficiency drive ever — a quantum level above previous efforts. But the comment I hear most often is 'it's all smoke and mirrors'.
So here is the paradox. The government probably has a huge success story on its hands but by having exaggerated its aims in the first place, over-claimed progress and then tried to avoid any serious scrutiny of the results — by Parliament, the National Audit Office, or anyone else — it has contributed to an atmosphere where no one believes it.
So, ironically, the government might be simultaneously saving substantial amounts of money and decreasing public value by being so secretive and unaccountable about the way it reports this.
Colin Talbot is professor of public policy and management at Manchester University's Centre for Public Policy and Management
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