Government efficiency savings, 2021
Published 28 March 2022
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In the Declaration on Government Reform, the government committed to improving cross-government functions to better support departments’ corporate activity and delivery capability, with clear standards and spending controls to maximise value for money for the taxpayer.
In financial year 2020/21, the government continued its work to deliver savings for the UK taxpayer by improving operational efficiency and effectiveness. Functions, departments and other central government bodies have worked together to realise significant efficiencies in how services and outcomes are delivered. The figures set out here are those which meet the definition of cashable savings. Cashable savings are those which lead to a direct reduction (all other things being equal) in a department’s budget.
During 2020/21 cashable savings totalled £3.4 billion. £1.9 billion of this was delivered through reducing losses from fraud and error, improving debt management and improving the effectiveness of grants. £1.4 billion of the savings were enabled by commercial teams driving improvements in the procurement of goods and services across government. £142 million of the savings were delivered by Digital Teams supporting departments to bring capability in-house and reducing the cost of running IT services. All of these savings have been assured for accuracy and robustness by the Government Internal Audit Agency. A summary of these savings by functional team is set out below:
| Function (team) | Team activity | 2021/21 savings (£) |
|---|---|---|
| Government Counter Fraud function | The Government Counter Fraud function brings together c.16,000 public servants who work to find and fight fraud within public organisations. This includes those working to understand and mitigate fraud risk within their organisations and those who work in the public sector to fight economic crime | £1.388 billion |
| Government Debt Management | The Government Debt Management function works with departments to identify opportunities to maximise debt collections over and above business as usual activity | £441 million |
| Government Grants Management function | The Government Grants Management function exists to ensure the effectiveness of grant funding and the efficiency of grants administration across government | £34 million |
| Digital, Data and Technology function (Standards and Assurance team) | The aim of the Standards Assurance team is to make sure government spend on digital and technology aligns with the technology code of practice, service standards, and government digital strategy to help departments make the right technology decisions to deliver great digital services | £142 million |
| Commercial function (Complex Transactions team ) | The Complex Transactions team helps to generate savings by providing specialist commercial expertise directly to departments | £1.191 billion |
| Commercial function (Markets and Suppliers team) | The Markets and Suppliers team as part of the Commercial function works on making savings from 40 strategic suppliers to the government | £212 million |
| Total | £3.408 billion |
Audited monetised savings - examples
Counter Fraud, Debt and Grants
The Government Counter Fraud function, Government Debt Management function and Government Grants Management function work closely with HM Treasury and across government to identify and reduce financial losses through fraud and error, improve overdue debt management and improve the effectiveness of grant funding and the efficiency of grant administration. Many of the savings within the Government Counter Fraud function come from the delivery of data matching and analytics solutions that highlight anomalies that may indicate fraud thereby enabling better prioritisation of the work of the counter fraud expertise. For example, £139 million of Personal Protective Equipment (PPE) savings (£77 million direct and £62 million department led) were delivered by using data to identify fraudulent (including suspected) contracts which were then terminated and the prevention of proposed contracts being signed.
Digital, Data and Technology
The Central Digital and Data Office (CDDO) has directly enabled efficient use of departmental budgets. In enabling the reduction of running costs of IT services, and providing the necessary expertise and guidance to develop in-house capabilities, CDDO has helped realise a total of £142 million of savings. Included in this figure are £138 million of in-year savings from the Unity programme, a centralised ICT service within the Department for Environment, Food and Rural Affairs (DEFRA) network, created to replace the two largest DEFRA ICT contracts which were both expiring. This included redesign and migration of the existing ICT services to a multi-supplier model before single source contracts expired.
Commercial
The Government Commercial function is a cross-government network which supports the procurement of goods and services and works to improve people, processes and infrastructure so as to deliver better results within departments. Included within the total savings of £1.4 billion for 2020/21 are £93.5 million of savings delivered by the function in support of the Supply Chain Coordination Limited. These savings were collaboratively delivered by the Complex Transactions and Supply Chain teams by changing the approach to procurement and category management, improving terms and delivering savings as a result of reduced product and services cost.
Read the technical note on the savings made by government in 2020/21 (pdf, 151 KB).
Unaudited wider benefits
Some improvements to efficiency and effectiveness, such as increases in quality or avoided expenditure do not deliver cashable savings. As a result, we believe the figure of £3.4 billion understates the total savings and benefits delivered across central government. Examples of wider benefits delivered by central functions not cited here can be found within publications such as :
- Government Legal Department, Attorney General’s Office and HM Crown Prosecution Service Inspectorate Annual Report and Account
- State of the Estate Report
- Government Property Agency Annual Report and Accounts from the Government Property function.
- Crown Commercial Services Annual Report and Accounts including audited efficiencies delivered by Crown Commercial Services
Further examples of these wider benefits can be found below. Please note, unlike the efficiencies cited above, these benefits are not cashable and have not been subject to audit by the Government Internal Audit Agency.
Analysis
The Analysis function is a cross-government network supporting government to make better decisions so that policy and operations deliver value for money and improve the lives of people in the UK. This is done by delivering expert advice, providing high-quality data and evidence across government, and seizing opportunities to build cutting-edge, transformative analytical capabilities. For example, analysts across government are improving the resilience and efficiency of the way analysis is delivered through a methodology called Reproducible Analytical Pipelines (RAP). The Analysis function runs a cross-government network of RAP champions and provides guidance on how to implement RAP, which delivers efficiency by removing manual processes, increasing resilience in the way analytical outputs are delivered and improved quality assurance. Adopting RAP has been a significant enabler for the Department for Education’s Explore Education Statistics
Security
The Government Security function’s mission is to enable government to protect citizens and provide vital public services by understanding and managing security risks. The Government Security Centres provide expert services and products on critical areas of security for the wider benefit of departments and arm’s length bodies. The advice and support they provide help departments meet Government Security Standards and reduce risk. They have also rationalised the delivery of common services and created critical mass in terms of security expertise. Serious security events are catastrophically expensive. For example, the cyber attacks against Redcar and Hackney Councils each cost over £10 million to remediate. The Security function reduces these risks and significant benefits are realised through the avoidance of costs associated with such incidents.
Finance
The Government Finance function (GFF) centre enables finance teams in departments and organisations to work more efficiently by building capability, sharing good practice, and supporting continuous improvement across the function. The GFF centre undertakes a number of specific activities where the creation of a central solution that departments and organisations can tap into directly saves government money. These include: the Government Finance Academy (GFA) which provides high quality learning and development offers to improve financial skills, capability and expertise across government and the Tax Centre of Excellence and Technical Accounting Centre of Excellence which provide departments and organisations with centres of expertise relating to tax and accounting. This results in significant savings given that this knowledge gap would otherwise be filled by direct recruitment into individual organisations or by buying expensive external advice on an ad hoc basis.
Legal
As the government’s principal legal advisers, the Government Legal Department (GLD) has delivered efficiencies across Whitehall and beyond by bringing together the majority of lawyers working in central government. GLD has invested in corporate services, business management teams and additional front line resources with the aim of maintaining and improving capacity and quality of legal services to government. This has allowed the government to continuously draw upon the skills of GLD’s lawyers as they bring to life the policies pledged in their election manifestos. GLD has improved the quality of legal services through enhanced sharing of knowledge and innovation, a more consistent approach to advising on risk and responding to changing priorities and emerging issues where these cross departmental boundaries.
Business Services
Government Business Services (GBS) supports the modernisation of the Civil Service, by driving efficiency in back office systems and services, to enable civil servants to focus on their role in supporting ministers and the public rather than burdensome internal processes, and improve workforce and finance data across the government system.
Through GBS’s operation of central services to departments and functions, they deliver benefits through economies of scale, drive standardisation and support interoperability. In 2020/21 GBS delivered savings and efficiencies across its portfolio including pensions, recruitment and shared services. Savings delivered through managing the Civil Service Pension Scheme (CSPS), the third biggest of its kind in the UK, were delivered through reduced one-off project costs and an improved contract with the administrator. Furthermore, Government Recruitment Services as part of GBS, is providing recruitment services to government departments, agencies and non-departmental public bodies enabling saving to be made compared to stand alone arrangements.