Independent think tank the Institute for Fiscal Studies has questioned the robustness of Spending Review figures that suggest all departments will be making very similar administrative efficiencies over the next five years.
IFS director Paul Johnson, who is an ex-HM Treasury director and former chief economist at the Department for Education and Skills, said the figures lacked credibility.
HM Treasury’s SR25 document details administrative efficiency savings expected to add up to £2.2bn by 2029-30 through measures such as staff-exit schemes and attempts to embed a more “cost-conscious culture” across Whitehall.
A table included in the Spending Review document identified 20 government departments or funding areas and gave planned administrative spending for the years to 2029-30.
Fourteen of the departments are described as planning cumulative administrative efficiencies of 10% between 2025-26 and 2028-29 – and another 5% in the following year, bringing their cumulative total to 15% by 2029-30.
Both HM Revenue and Customs and the Foreign, Commonwealth and Development Office project 13% administrative efficiencies by 2028-29 and 17% by 2029-30. The Cabinet Office projects 16% administrative efficiencies by 2028-29 but no further savings by the following year.
Meanwhile, “small and independent bodies” are earmarked to deliver 23% administrative efficiencies by 2028-29 and 25% by the following year.
A civil service-wide total confirms administrative efficiencies of 11% by 2028-29 and 16% by 2029-30.
Setting out the Spending Review to MPs in parliament on Wednesday, chancellor Rachel Reeves said she had been “relentless in driving out inefficiencies” and would be “relentless in calling out waste”.
In an analysis of the SR25 figures yesterday, the IFS’s Johnson said he welcomed her stance, but questioned the veracity of the administrative efficiencies figures.
“One thing is quite striking," he said. “It seems that virtually every department is ripe for exactly the same cut in its administration budgets – 10% for all of them over the three years to 2028-29 and then another 5% in one year, 2029-30 – irrespective of how much they might have grown recently, and irrespective of planned spending increase. Frankly, irrespective of anything at all.
“That is not the result of a serious department-by-department analysis.”
Johnson added: “I hesitate to accuse the Treasury of making up numbers, but…”
He then pulled a face suggesting he thought fabrication was the only possibility.
Johnson also questioned the extent to which the Spending Review had been “zero-based” – looking in detail at every aspect of spending, as claimed by Reeves.
“We can’t find any particular area of spending the government has decided it wants to withdraw from – other, perhaps, than overseas aid,” he said. “And no very obvious big decisions about reducing particular areas of spending.”
Civil Service World sought a Treasury response to the IFS’s observations.
It had not provided one at the time of publication.