Coalition cuts unprecedented

Over the past three decades, no government has been able to achieve reductions in the administrative costs of central government equal to those proposed by the coalition, a report from Oxford University said earlier this month.

By Civil Service World

17 Oct 2012

Having analysed administrative costs data, Dr Ruth Dixon and Professor Christopher Hood found that between the early 1980s and the early 1990s, net running costs rose dramatically in real terms, despite efforts to improve efficiency.

Margaret Thatcher launched a “New Public Management” (NPM) efficiency drive, which made bureaucratic cost-cutting one of its central themes, but running costs rose by 47 per cent in real terms between 1980–81 and 1992–93.

Only John Major’s government secured a reduction in net running costs during its tenure: after a rise from 1990 to 1992, costs fell until the Labour election victory in 1997.

However, the study found that Major secured a fall in administrative costs of just six per cent over five years: less than a fifth of the savings being called for over 2010–14. The coalition aims to cut administrative costs by 34 per cent by 2014-15.

The only time administrative costs fell by over ten percent was in the late 1990s, but this was because the Treasury reclassified and reduced its definition of administration, no longer counting counting prison officers and immigration officials.

“If there is a historical parallel with what is currently being called for, it seems to lie outside the NPM era, such as the radical reduction in public spending and employment that took place after World War II or the deep cuts made by the ‘Geddes Axe’ under the Lloyd George Liberal–Conservative coalition government of the early 1920s,” the report says.


You can access a 4-page summary of the report online at this web address:




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