The Treasury has announced an efficiency drive to cut £5.5bn of ‘wasteful spending’ across government departments
The crackdown, which was requested by Prime Minister Boris Johnson, has seen a new ‘Efficiency and Value for Money Committee’ set up, which will be chaired by Chancellor Rishi Sunak and will aim to ensure that the 5% efficiency target set last year is met across the government and will also examine strategies to prevent fraud and error.
The announcement stated that the £5.5bn saved from this measure will be put straight back into public services such as the NHS. As part of the plan, the annual NHS efficiency target will be doubled to 2.2% which the Chancellor stated would free up around £4.75bn to fund the NHS over the next three years.
The crackdown will also see a review of government arm’s length bodies and quangos which will be expected to save at least £800m from their budgets.
The efficiency target will also aim to ensure that the funding settlement of £188.9bn a year by 2024-25 for the Department for Health and Social Care will also ‘deliver the best possible value for money’.
The increased efficiency target will also aim to ensure that the record funding settlement of £188.9bn a year is delivering the best possible value for money for the taxpayer and the money saved will be used to fund frontline NHS priorities.
The Treasury said that the savings will be made through a range of programmes which include the digitisation of diagnostic and frontline services, which has been shown to reduce cost per admission by up to 13%, better use of property, reduced reliance on consultants, and greater use of shared services.
The Treasury will also launch an innovation challenge to crowdsource ideas from civil servants on how government can reduce waste and improve public services, with winners selected this summer and the best ideas becoming government policy.
A similar challenge was run in 2015, which received 22,000 responses, of which 16 measures were implemented.
Chancellor Rishi Sunak said: ‘During these challenging times it’s vital that every single penny of taxpayers hard-earned cash is being spent well.
‘The current level of waste across government is simply not acceptable, which is why we’re doubling down on wasteful spending and launching an efficiency drive to make £5.5bn worth of savings. That money will then be pumped directly into the world class public services that the British people deserve.’
Last month, minister for Brexit opportunities and government efficiency Jacob Rees-Mogg MP outlined to The Times his plans to shrink the civil service by cutting more than 65,000 jobs, around one in seven civil servants by 2023-24.
In an interview, Mogg stated that he wanted to get the headcount ‘under control’ and asked whether the current civil service headcount was ‘providing value’ for the taxpayer.
Mogg then pledged to deliver former Cabinet Office minister Francis Maude’s legacy of reforming and cutting the size of the civil service. Under Lord Maude, the civil service shrank from around 470,000 full-time officials in 2010 to about 384,000 just before the 2016 EU referendum. The 2012 Civil Service Reform Plan aimed to reduce the headcount to 380,000.
However, this cut has almost been reversed with the civil service having around 472,700 full-time equivalent staff as of September last year, according to the Institute for Government’s most recent Whitehall Monitor report, which is mainly due to Brexit and the Covid-19 pandemic.