4 November 2010 | Lindsay Clark
The parliamentary spending watchdog has
voiced concerns that government cuts will be made, not by greater efficiency,
but by reducing front-line services.
A report into value for money savings in
government by the Committee of PublicAccounts (PAC) found that a £35 billion efficiency target, set in 2007,
represented savings of 3 per cent a year for each department’s expenditure.
However, by March 2010, two years into the
three-year programme, departments and local authorities had reported only £15
billion of savings, less than half of the total needed to reach the £35 billion
target, the PAC said.
Since the new government was elected it has
pledged to cut spending by an average of 19 per cent outside health and
international aid by 2014-15. However, it hopes to protect services as much as
possible by making efficiency savings, including £400 million-a-year through
better Whitehall procurement.
MP Margaret Hodge, chairwoman of the PAC, said:
“Now that much more radical cost-cutting measures are required across
government, my committee is gravely concerned about the ability of government
to make efficiency improvements on the scale needed. There is a serious risk
that, to reduce costs, departments will rely solely on cutting front-line
“This committee expects efficiency
improvements to make a major contribution to the cost reductions now required
across government. We also expect the Treasury and departments to learn the lessons from the 2007 value for
Despite the importance placed on that programme
at the top of government, departments could not even measure adequately what
savings they had made, and the Treasury failed to create a framework for reliable
reporting, the PAC found.
In the future the Treasury should take full
responsibility for the delivery of efficiency savings across government as a
whole and demonstrate a full grasp of the causes of underperformance in any
department, intervening where it does not meet expectations.