8 March 2010 | Jake Kanter


The UK government must “re-engineer” public service delivery and improve procurement to make vital spending cuts, the Confederation of British Industry (CBI) has urged.

In a letter to chancellor Alistair Darling ahead of the Budget, CBI director general Richard Lambert said the UK deficit is “worryingly large”, but “still manageable”. He called on the government to set out a “convincing, credible pathway for balancing the books” two years earlier than they have currently planned.

As part of this, Lambert said, savings of £130 billion could be achieved by 2015-16 through smarter spending and cutting inefficiency in procurement.

In many areas private and third sector suppliers can deliver “better outcomes at lower cost”. On delivering improved health services, he said: “Better support in the community for those with long-term conditions would increase patient satisfaction, improve health outcomes and reduce the need for expensive hospitalisation.”

Local authorities should share back office services, rationalise IT and reduce office space, the CBI chief added.

Paul Pindar, chief executive of outsourcing firm Capita, echoed the CBI’s call to find savings in service delivery but said cuts could be even further reaching.

"If you look at the total level of public expenditure of £680-£700 billion and the level of savings that have previously been made of 25-30 per cent, there's no doubt significant savings are there," he told the Daily Telegraph today.

It follows the CBI’s pre-budget report submission last year, which called on the government to cut waste and reduce "lengthy" procurements.