Whitehall departments told to prepare 6% saving plan under efficiency drive

28 Feb 17

Whitehall departments have been told by the Treasury to draw up plans to make up to 6% savings under a cross-government efficiency drive, but any savings found in local government will be reinvested in social care.

The programme, which was first announced by former chancellor George Osborne in the 2016 Budget, is intended to cut spending by £3.5bn in 2019-20. In the Autumn Statement, Osborne’s successor Philip Hammond announced he would go ahead with the efficiency drive, but that up to £1bn could be reinvested in priority areas.

Setting out today’s update, chief secretary to the Treasury David Gauke said the government was committed to a modern, high-quality public sector that delivers the services people need in the most efficient way possible.

“There has been considerable progress, but there is further to go and the whole of government is working together to consider how we can live within our means while delivering maximum value for every pound of taxpayers money,” he said.

Departments will need to produce two plans for the Treasury – one setting out 3% savings and one for a 6% reduction. However, the NHS and core schools budgets are protected areas of spending and do not come under the scope of the review. The Treasury also said it recognised the spending pressures on social care services, therefore any efficiencies found within the Department for Communities and Local Government would be reinvested in care provision.

Existing commitments to meet the NATO target of spending 2% of GDP on defence and for the defence budget to rise by 0.5% above inflation each year of this Parliament would also be met.

An update on progress will be provided in the autumn.

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