Government on track to save £8 billion this year through Efficiency and Reform Group controls

The Coalition government has announced that it has managed to eradicate even more wasteful spending across Whitehall than it originally envisaged. It has managed to achieve this by fundamentally shifting the way government operates, and enforcing a strict approach to public sector spending across all departments and driving a business-like approach throughout Whitehall. The latest interim results suggest that overall the government has managed to save an additional £3.1 billion so far this year on IT contracts, property, marketing, temporary contracts and consultancy, putting the government on track to save £20 billion a year by 2015, according to the Minister for the Cabinet Office, Francis Maude.

Interim results show not only have these departments already saved £3.1 billion so far this financial year, but they are also expected to save a further £4.9 billion by the year end. The figures were released at the inaugural government analysts briefing event. The event gave financial analysts an opportunity to scrutinise interim results from the first half of 2012/13, and to examine the Efficiency and Reform Group’s business plans and commercial targets for the remainder of the financial year.

The figures follow a renewed drive within the Efficiency and Reform Group – the Government’s new operations centre – which was recently boosted by the appointment of Chloe Smith as a Minister in the Cabinet Office and Stephen Kelly, former Chief Executive Officer of FTSE Company MicroFocus, as the Government’s Chief Operating Officer. Speaking at the event, Francis Maude stated:

“Our fundamental programme of reform is changing the way Whitehall operates and driving efficiency savings to make every taxpayer pound count. Thanks to the hard work of hundreds of civil servants in the Efficiency and Reform Group and beyond we have helped departments save £3.1 billion so far this financial year, putting us on track to save £8 billion by year end.”

“We have said we want to be saving £20 billion a year by 2015 and savings of this magnitude cannot come by trimming budgets here and there. That’s why we are working to transform Whitehall into a leaner, more efficient machine that manages its finances like the best-run businesses. We are taking the tough decisions required to ensure that Britain can compete in a global race. We cannot go back to the old days of waste and profligacy.”

The interim departmental results of £3.1 billion announced today build on the £5.5 billion of savings in 2011/12 and the£3.75 billion saved during 2010/11. They include:

  • £680 million through the moratorium on consultancy and contingent labour spend and on extending existing consultancy contracts;
  • £170 million from reductions in the in-year cost of the government’s property estate, by exiting unnecessary properties, and questioning each and every lease break before they get extended;
  • £295 million by using government’s bulk-buying power and pooling spend on goods and services used by different departments; and
  • £900 million from salary cost, achieved by reducing the size of the Civil Service through stronger controls on non-essential recruitment.