Press release

Government on track to save £8bn this year

A shift in the way government operates, enforced by the Efficiency and Reform Group, has put the government on track to save £20bn a year.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

29 October 2012

A fundamental shift in the way government operates, which sees the Efficiency and Reform Group enforcing financial controls across all departments and driving a business-like approach in Whitehall, has accelerated savings, putting the government on track to save £20 billion a year by 2015, the Minister for the Cabinet Office Francis Maude announced today.

Interim results show departments have saved £3.1 billion so far this financial year and are expected to save more than £8 billion by the year end. These figures were released today at the inaugural government analysts briefing event. At the event financial analysts had the opportunity to scrutinise interim results from the first half of 2012/13, and to examine the Efficiency and Reform Group’s business plans and commercial targets for the remainder of the financial year.

Today’s figures follow a renewed drive within the Efficiency and Reform Group - the Government’s new operations centre - which was recently boosted by the appointment of Chloe Smith as a Minister in the Cabinet Office and Stephen Kelly, former Chief Executive Officer of FTSE Company MicroFocus, as the Government’s Chief Operating Officer.

Minister for the Cabinet Office Francis Maude said:

At this morning’s inaugural analysts event we invited the financial analyst community to scrutinise our savings for the very first time - we know that with their knowledge and expertise we can find even greater savings for taxpayers.

Our fundamental programme of reform is changing the way Whitehall operates and driving efficiency savings to make every taxpayer pound count. Thanks to the hard work of hundreds of civil servants in the Efficiency and Reform Group and beyond we have helped departments save £3.1 billion so far this financial year, putting us on track to save £8 billion by year end.

We have said we want to be saving £20 billion a year by 2015 and savings of this magnitude cannot come by trimming budgets here and there. That’s why we are working to transform Whitehall into a leaner, more efficient machine that manages its finances like the best-run businesses.

We are taking the tough decisions required to ensure that Britain can compete in a global race. We cannot go back to the old days of waste and profligacy.

The interim departmental results of £3.1 billion announced today build on the £5.5 billion of savings in 2011/12 and the £3.75 billion saved during 2010/11. They include:

  • £680 million through the moratorium on consultancy and contingent labour spend and on extending existing consultancy contracts;
  • £170 million from reductions in the in-year cost of the government’s property estate, by exiting unnecessary properties, and questioning each and every lease break before they get extended;
  • £295 million by using government’s bulk-buying power and pooling spend on goods and services used by different departments; and
  • £900 million from salary cost, achieved by reducing the size of the Civil Service through stronger controls on non-essential recruitment.

Notes to editors

  1. Since 2010 the Minister for the Cabinet Office, Francis Maude, has worked closely with the Chief Secretary for the Treasury to lead a major programme of radical reform to Government operations. The program strategically focuses on eliminating wasteful and low value spend, reforming government business to lock in efficiencies and generate savings for the taxpayer.
  2. In 2011/12, UK central Government spent around £45 billion on goods and services which is equivalent to approximately 3% of GDP. Last year, the Cabinet Office helped departments across Whitehall save £5.5 billion. These savings were driven by the Cabinet Office’s Efficiency and Reform Group (ERG) which applied controls to cut expenditure by departments on commercial contracts, IT, property, marketing, temporary staff and consultancy.
  3. These figures represent our best interim assessment of the Government’s progress against meeting the above objectives based on interim team reports. These savings figures are not national or official statistics; they are management information evidenced, normally, by department reports. These figures have not been assured by our internal auditors or the NAO.
  4. The Efficiency and Reform Group reports to Francis Maude, and is overseen by an Efficiency Board chaired jointly by the Chief Secretary to the Treasury, Danny Alexander, and the Minister for the Cabinet Office and Paymaster General, Francis Maude.
  5. Chloe Smith MP was appointed the Minister for Political and Constitutional Reform in September and supports the Deputy Prime Minister across the full range of political and constitutional issues. In addition to this role, Chloe supports the Minister for the Cabinet Office on some aspects of the Efficiency and Reform and Civil Service Reform agenda, as well as Cyber Security and Civil Contingencies.
  6. Stephen Kelly was appointed Chief Operating Officer for Government in September. In this role he will help the Government to go even further with its crucial efficiency and reform agenda and build on the £5.5 billion of efficiency savings achieved last year.
  7. The Cabinet Office ensures departments work together to tackle waste and improve accountability across a range of areas, including information and communications technology (ICT), procurement, projects, HR and property.
  8. Find further details on the Government’s Efficiency and Reform programme here.
Published 29 October 2012