By Lucy Phillips
27 May 2010
Doubts have been cast on the government’s ability to make cashable efficiency savings after this week’s announcement by the Treasury.
Chief Secretary to the Treasury David Laws set out the individual departmental contributions to the £6.2bn of required in-year Whitehall savings on Monday. These included £1.15bn of savings from discretionary spending areas such as consultancy, advertising and travel costs; £1.7bn from delaying and stopping contracts and projects; £600m from quangos; and £95m from IT programmes.
At least £120m of savings are expected to be achieved through a civil service recruitment freeze.
Laws said: ‘Our first priority is to cut out waste. We cannot expect difficult decisions to be taken on spending until we have eliminated waste.’
A cross-Whitehall ‘efficiency and reform group’, chaired by Laws and Cabinet Office minister Francis Maude, has been set up to oversee the savings.
But Eilís Lawlor, a public services expert at the New Economics Foundation, said the Cabinet Office and Office of Government Commerce already existed for that purpose. She urged the new body to identify true efficiency savings by measuring expenditure outcomes rather than simply how much was spent. ‘We haven’t got a good enough sense of what is wasteful and what is not,’ she said.
She added that the term ‘efficiency savings’ was a euphemism for ‘cuts’. In the past, local authorities and civil servants had simply made across-the-board cuts without looking at what was actually inefficient.
‘Often people cut things that are expensive but because it’s expensive, it does not mean it’s inefficient... Still using the term efficiency savings is worrying because government can get away with making cuts that might otherwise be controversial,’ she told Public Finance.
Lawlor said cutting things like quangos was ‘politically expedient’ but there was no proof if that was best for the public. ‘If we have to make cuts, we have to focus on the things that are least useful,’ she added.
Ben Scott Knight, a director at Concentra Consulting, said it was ‘one thing to identify savings and another thing to realise them’. He warned that the Treasury’s plan to save £6.2bn could fall £2.5bn short because up to 40% of targets were usually lost through bad processes.
‘In practice, many savings programmes don’t achieve their predicted targets,’ he said.
27 May 2010
Doubts have been cast on the government’s ability to make cashable efficiency savings after this week’s announcement by the Treasury.
Chief Secretary to the Treasury David Laws set out the individual departmental contributions to the £6.2bn of required in-year Whitehall savings on Monday. These included £1.15bn of savings from discretionary spending areas such as consultancy, advertising and travel costs; £1.7bn from delaying and stopping contracts and projects; £600m from quangos; and £95m from IT programmes.
At least £120m of savings are expected to be achieved through a civil service recruitment freeze.
Laws said: ‘Our first priority is to cut out waste. We cannot expect difficult decisions to be taken on spending until we have eliminated waste.’
A cross-Whitehall ‘efficiency and reform group’, chaired by Laws and Cabinet Office minister Francis Maude, has been set up to oversee the savings.
But Eilís Lawlor, a public services expert at the New Economics Foundation, said the Cabinet Office and Office of Government Commerce already existed for that purpose. She urged the new body to identify true efficiency savings by measuring expenditure outcomes rather than simply how much was spent. ‘We haven’t got a good enough sense of what is wasteful and what is not,’ she said.
She added that the term ‘efficiency savings’ was a euphemism for ‘cuts’. In the past, local authorities and civil servants had simply made across-the-board cuts without looking at what was actually inefficient.
‘Often people cut things that are expensive but because it’s expensive, it does not mean it’s inefficient... Still using the term efficiency savings is worrying because government can get away with making cuts that might otherwise be controversial,’ she told Public Finance.
Lawlor said cutting things like quangos was ‘politically expedient’ but there was no proof if that was best for the public. ‘If we have to make cuts, we have to focus on the things that are least useful,’ she added.
Ben Scott Knight, a director at Concentra Consulting, said it was ‘one thing to identify savings and another thing to realise them’. He warned that the Treasury’s plan to save £6.2bn could fall £2.5bn short because up to 40% of targets were usually lost through bad processes.
‘In practice, many savings programmes don’t achieve their predicted targets,’ he said.
