New savings drive ‘more rigorous’ than Gershon

8 Jun 09
Treasury officials have assured MPs that £26.5bn savings made under the Gershon programme are ‘real’, but have said checks on the renewed efficiency drive would be ‘more rigorous’

By Tash Shifrin

05 June 2009

Treasury officials have assured MPs that £26.5bn savings made under the Gershon programme are ‘real’, but have said checks on the renewed efficiency drive would be ‘more rigorous’.

The Commons Treasury subcommittee on June 3 cited a February 2007 National Audit Office report, which said £3.1bn of the Gershon £13.3bn savings claimed at that point could not be demonstrated, while there were ‘measurement issues’ around another £6.7bn.

But Andrew Hudson, the Treasury’s managing director for public services and growth, insisted: ‘We’re confident that the £26.5bn of savings are real.’ This was £5bn over the original Gershon target.

Hudson was challenged by the MPs, who asked if redundancy payments made when staff numbers were cut had been ‘netted off’ the final efficiency savings figure. He admitted: ‘I’m advised that Gershon allowed both gross and net figures.’

Quizzed about the continuing savings programme outlined in the 2007 Comprehensive Spending Review, Hudson told the MPs: ‘The overall programme is more rigorous because savings are cash releasing, net of costs both upfront and ongoing, and sustainable.’

Controls to prevent service quality being hit by efficiency measures had not been relaxed since Gershon, Hudson said. ‘Targets have been scrutinised very carefully to make sure they’re value-for-money measures, not cuts.’

Asked whether the dropping of headcount reduction targets – a central feature of the Gershon programme – meant its advances were being reversed, Hudson said staffing cuts ‘were judged the right thing to do’ when the value-for-money culture was ‘less well entrenched than it is now’.

Dropping the staffing targets allowed departments a ‘genuine exploration of where value for money can be obtained’, he said.

 

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