Cabinet Office Minister Francis Maude has today promised to leave “no stone unturned” in the hunt for more efficiency savings at the centre of Government so that the deficit is addressed while the front line is protected.
Mr Maude made the promise as he set out hundreds of millions of pounds in efficiency savings that have already been made because of actions led by the newly established Efficiency and Reform Group (ERG).
The group, which is based in the Cabinet Office, was set up to ensure that departments across Whitehall adopted a new and ambitious approach to saving money and started working together to ensure the greatest economy of scale when buying goods and services. It also aims to bring the best in private sector operations practice to government for the first time.
The group oversees information and communications technology spend, procurement, marketing and consultancy spend and Civil Service expenses and recruitment. Much of its work has never been tried by Government before, such as renegotiating contracts with major suppliers across government to reduce costs, and a freeze on all new advertising and marketing spend.
Initiatives brought in by ERG include:
- In addition to tight new controls to ensure all new contracts worth more than £1million are approved centrally, more than 300 ICT projects have been reviewed and work is underway with departments to stop or de-scope contracts worth £1 billion.
- Around £402 million has already been saved in this financial year following a review of the Government’s largest projects, including abolishing ID cards.
- A moratorium has been introduced to stop departments buying new space or renewing existing leases.
- So far 20 buildings have already been vacated, saving £18 million in rent this year alone.
- Following the introduction of the recruitment freeze, there has been an estimated 75 per cent reduction in the recruitment of permanent staff compared to the same period last year.
- Action has been taken to reduce the use of temporary, agency and interim staff. Latest figures show the total number has already fallen by an estimated 30 per cent.
Websites, Advertising and Marketing
- £27 million has been saved compared to last year in the period from June to August following the introduction of a freeze on all new non-essential marketing and advertising spend.
Consultancy, Major Projects & Procurement
- Total spend across Whitehall has been reduced by more than £100 million compared to the same period last year following the introduction of new rules stating that any spend over £20,000 needs Ministerial and Permanent Secretary approval.
- Work has been undertaken to renegotiate contracts with the Government’s key suppliers. When completed, this process is expected to deliver more than £800 million in savings this year.
Mr Maude said:
Our priority has always been to do this as fairly as possible and take cost and waste out of the centre of government so that we can protect essential jobs and services on the front line. Every pound wasted unnecessarily in Whitehall on operational overheads is a pound that can’t be spent on the services we all rely on and that is why we set up this ambitious efficiency programme.
This is not glamorous work, but it is where the money is and what today’s figures show is that the approach taken by the Efficiency and Reform Group is working. In the run-up to the Spending Review and beyond, we will continue to leave no stone unturned in the search for waste and unnecessary low-value spending.
In addition to today’s efficiency savings, Mr Maude confirmed the Government was looking to make radical changes to the way it provides essential services to citizens, making them easier to access and cheaper to provide.
As part of this plan, he said he would be working closely with Martha Lane Fox, the UK Digital Champion, on her proposals to improve Government’s online services. One area they will be looking at is moving to an online first model for some services.
Mr Maude added:
In an age when 96 per cent of all 25-34 years olds are internet users, just 13 per cent of our contact with citizens is currently carried out online. We have to start looking at ways we can improve the way we communicate with citizens. But, we also need to do it in a more cost-effective way than has been tried before.
Notes to Editors
- The Efficiency and Reform Group (ERG) has been set up to deliver a step change in efficiency that is needed to make Government leaner. It is introducing a more unified approach to common processes across Government in areas where this will be effective in driving savings.
- The work of ERG 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.
- ERG will ensure 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. Its first priority is to support Departments in the delivery of £6.2 billion savings in 2010/11.
- For further details on the Government’s Efficiency and Reform programme, please see www.hm-treasury.gov.uk [external website]
- As part of the Government’s drive to increase transparency and accountability, the Prime Minister announced in June that Martha Lane Fox would be the new ‘UK Digital Champion.’ Her role focuses on encouraging as many people as possible to go online, and improving the convenience and efficiency of public services by driving online delivery.