“Straightforward” Whitehall savings achieved, says Cabinet Office, as it claims £3bn in efficiencies

Fresh data flags more modest year-on-year savings, as Cabinet Office acknowledges that larger efficiencies "will only be achieved by total service transformation"

By Matt Foster

03 Feb 2017

Many of the “straightforward” Whitehall efficiency savings targeted in the last parliament have already been achieved, the Cabinet Office has said, as it unveiled new figures reporting more than £3bn in savings over the past year.

During the last parliament, the Cabinet Office’s Efficiency and Reform Group became the effective corporate headquarters of the civil service, overseeing efforts to drive value for money across government, including by renegotiating contracts with major suppliers, centralising procurement and digital expertise, and establishing a dedicated property unit.

The Group could point to major savings in the 2014/15 financial year, the last year of the coalition's spell in office, when it reported an £18bn reduction in costs against a 2009/10 baseline.

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But the latest figures, published on Friday, flag up a more modest £3.3bn year-on-year saving between 2014/15 and 2015/16, prompting the Cabinet Office to acknowledge that “many of the more straightforward savings have already been achieved”.

It added: “Some of the larger savings that the government is targeting will only be achieved by total service transformation, much of it enabled by digital. That means making some early investments at the beginning of this parliament to achieve considerable gains at the end. “

This is the first time the government has measured efficiency including savings delivered in the current parliament and represents a significant step toward enabling greater efficiency in the way government works for years ahead.”

An accompanying note from the Government Internal Audit Agency, which vetted the figures for the Cabinet Office ahead of the announcement, meanwhile stressed that the previous parliament’s figures could no longer be directly compared with the latest release.

“Savings are now being measured primarily against a 2014/15 baseline and so reductions in spend between 2009/10 and 2014/15 are no longer being counted in the savings figures,” it said.

“Savings for 2015/16 therefore appear relatively small compared to what have been reported in prior years. For some of the savings workstreams previously reported, no savings are being reported in 2015/16.”

Nevertheless, the GIAA has validated £3.3bn in year-on-year savings across several key areas overseen by the Cabinet Office. Of those, the report flagged £1.2bn in reduced operational costs, of which £95m came through reducing the in-year cost of the government’s property estate; £879m through providing specialist commercial expertise on complex transactions; and £225m through centralising procurement.

The Government Digital Service meanwhile saved departments £339m in the past year “through setting standards and providing assurances”; while around £805m of the £3.3bn total came from efforts to cut fraud, error and debt, including £632m alone from the Department for Work and Pensions’ own drive.

The remaining amount includes £16.8m from the sale of government IP addresses, and £973m in capital receipts from the sale of surplus government property, although the GIAA’s accompanying report strikes a sceptical tone on whether such sales should be included in the overall savings figures in future years.

“Savings totals currently include some elements which are not as the result of efficiency or reform and are not sustainable,” it says.

“For example sale of land and buildings and shares in commercial models. Whilst the proceeds do help to reduce the deficit we do not consider these items a good measure of savings.

“Sales proceeds themselves are not evidence best value has been achieved for the taxpayer although they are indicative of the prevailing market value. Going forwards both the targets and the means by which they are measured should be clearly defined in a manner which is targeted at maximising value.”

The GIAA also recommends that the 2016-17 figures be audited at departmental level to increase their accuracy.

“This could be done on a rolling basis throughout the year and would increase the level of assurance around savings figures and reduce the intensive year end process,” the auditor says.

“Where savings are measured using departmental accounts these will already be subject to audit by the National Audit Office and so would have a high level of assurance and would require minimal additional effort.”

Launching the latest savings figures, Cabinet Office minister Ben Gummer said the government had made “significant steps forward in tackling fraud, selling off redundant government property such as the former Civil Service College in Sunningdale and making better use of modern digital technology to drive savings”.

He added: “The government is committed to delivering value for money for taxpayers and the Cabinet Office will continue to drive savings right across departments as set out in the Spending Review in 2015.”

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