Press release

Government savings reach £5.4 billion at mid-year point

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

Savings for taxpayers £2.3 billion higher than previous year.

The Cabinet Office’s Efficiency and Reform Group is making strong progress towards delivering the government’s target of £15 billion of savings for the public purse this financial year, Minister for the Cabinet Office Francis Maude announced today.

New half-year savings figures of £5.4 billion demonstrate the ambitious work to make Whitehall more efficient and effective.

The Efficiency and Reform Group is continuing to work with departments towards delivering savings of £20 billion by 2015 in 4 key areas, which at this half-year point includes:

  • £1.8 billion by linking together departments to buy goods and services and enforcing sensible controls on the use of consultants
  • £0.6 billion by improving online services, and raising money through selling empty buildings and exiting expensive rentals in sought-after locations
  • £0.7 billion by reviewing and reshaping large scale projects (including construction) and stripping out inefficiencies
  • £2.3 billion by reducing the size of the civil service and reforming civil service pensions

Minister for the Cabinet Office Francis Maude said:

My priority is to ensure that Whitehall spends effectively and efficiently every pound from hard-working taxpayers. I’m pleased to announce we have saved £5.4 billion at the half-point of this financial year. We saved £10 billion in the last financial year, with £5.5 billion the year before and the £3.75 billion in our first ten months in office.

Thanks to the relentless work of many civil servants and our tough but sensible spending controls, we are now on track to reach our target of saving taxpayers £15 billion this year. We still have a long way to go to meet our ambitious and stretching target by the end of the year.

To get ahead in the global race, we are changing the way government works and taking innovative steps to help further reduce Britain’s deficit. When we came to power in 2010 we found there was far too much wasteful spend across Whitehall. We want efficiency and innovation to become natural reflexes of government but there’s a very long way to go to ensure that.

Financial Secretary to the Treasury Sajid Javid said:

This work to make Whitehall more efficient shows what can be done to revitalise the economy, stimulate growth and boost prosperity.

Civil servants across government are radically rethinking the way they operate to increase productivity and support SMEs – the lifeline of our economy. The deficit is already down a third since the General Election but there is still much more to do.

These savings join the raft of successful measures this government is delivering to increase competition, support new businesses and encourage investment to create a more balanced economy.

Jonathan Isaby, Political Director of the TaxPayers’ Alliance, said:

Taxpayers will warmly welcome the progress of the Efficiency and Reform Group and its work to save considerable amounts of their money.

The savings which have now been announced are a sad testament to the fact that for too long politicians have been wasting billions of pounds a year that could instead have been left in taxpayers’ pockets. But there is no room for complacency and the Efficiency and Reform Group must now redouble its efforts to identify further savings that will cut out waste, reduce bureaucracy and ease the burden on hard-pressed taxpayers.

It is essential that a culture of delivering best value for money exists at all levels in the public sector, all the way from the biggest departments in Whitehall to the smallest parish council. Those holding the purse strings must never forget that they are spending taxpayers’ hard-earned money and should exercise the same rigour and discipline in seeking the best deals as they would if they were spending their own cash.

Departments, supported by the Efficiency and Reform Group, have:

  • saved nearly £300 million by utilising innovative technologies and improved procurement practices in public sector construction projects, in the first half of this year – the equivalent of building 15 schools
  • reduced the annual cost of running government estates by £65 million, in the first half of this year
  • encouraged UK growth by opening up government business to attract a wider range of suppliers, including SMEs, resulting in 10.5% (or £4.5 billion) of government business going directly to SMEs in 2012 to 2013

Notes to editors

  1. In 2012 to 2013, UK central government spent around £39 billion on goods and services which is equivalent to approximately 3% of GDP. Last year, the Cabinet Office helped departments across Whitehall save £10 billion. These savings are mainly driven by the application of controls by the Cabinet Office’s Efficiency and Reform Group (ERG), which cut expenditure by departments on commercial contracts, IT, property, marketing, temporary staff and consultancy.
  2. The Cabinet Office ensures departments work together to tackle waste and improve accountability across a range of areas, including information technology (IT), procurement, projects, HR and property.
  3. The £15 billion target for savings in 2013 to 2014 is an amalgam of cash releasing back office savings and fraud, error and debt.
  4. 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 National Audit Office.
  5. The Efficiency and Reform Group reports to Minister for the Cabinet Office and Paymaster General, Francis Maude, and is overseen by an Efficiency Board chaired jointly by Francis Maude and the Chief Secretary to the Treasury, Danny Alexander.