By Vivienne Russell
25 March 2010Whitehall departments have set out how they plan to achieve the government’s efficiency target of £11bn a year by the end of the next Spending Review period.
The Department of Health revealed it is to save £4.3bn by 2012/13 – more than a third of the total savings. This includes: £1.5bn from improved procurement practices; £555m through reducing staff sickness in the NHS; and a further £70m from better use of the NHS estate.
The Department for Communities and Local Government is to save £200m, although a further £2.1bn will come from local government.
Of this £200m, £130m will be made by making back-office functions more efficient. The remaining £70m will come from reducing duplication with arm’s-length bodies such as the Homes & Communities Agency and regional development agencies.
The Budget also revealed that the shared services functions provided by the Department for Work and Pensions – which already provides services such as payroll for 140,000 staff across three departments – will take on four new departments.
The Ministry of Justice will also introduce a shared service centre for human resources, payroll and finance and transactions, providing services to 81,000 staff.
James Close, government services partner at Ernst & Young, said new shared service vehicles were a ‘welcome step forward’.
But, he added: ‘Announcing efficiency targets is one thing – achieving them is quite another.’
Mike Turley, head of the public sector practice at Deloitte, pointed out that back-office efficiencies would go only so far.
‘The size of the public debt will require an acceptance that the more challenging aspect of removing costs from frontline services will need to be confronted,’ he said.
