£6 billion efficiency savings announced

"Public borrowing is only taxation deferred".

A quote from David Laws yesterday that reminds us all why 'the cuts' have to be made. So while we might discuss the how and the where, it has to be done, and yesterday was a pretty good start I thought.

I also felt that Osborne and Laws came over well. Laws in particular looks like he has found the job he was born to.  Anyway, a few observations about the £6.2 billion savings – and I think my predictions last week weren’t too far off the mark!

  1. This is real money – real budget reductions – for most Departments. We need to see however whether the efficiency savings that the protected Departments have to make will be properly measured; as I've said before, it is harder to assess the reality of such savings when budgets are not reduced as well.
  2. I think I heard Nick Robinson say on the BBC that ‘pure’ efficiency savings have been harder to find than expected perhaps, less in the way of identified IT savings for instance, and there are real cuts in services (the Future Jobs Fund) and a real impact on jobs e.g. Becta. And in the case of Becta  I struggle to see how this will save money in 2010/11; I would be amazed if closure costs (redundancy, leases, contractual exits) do not outweigh the savings in this year.
  3. There are big cuts in discretionary spend areas such as Travel, Consultancy where the detail hasn't been exposed as yet.  And just to stick up for one of my ‘professions’; consultants do some useful work believe it or not!  Travel does usually have some purpose. You need stationery when you have millions of people in offices.  We will see whether these cuts really do have no consequences.
  4. I really liked the comments on first class travel.  Knowing that they could not impose an absolute embargo, the comment from Laws was 'I will be minded to reduce organisations' budgets by the amount spent on first class travel!” Excellent move.

But the most interesting thing from a procurement point of view was the announcement of the new Efficiency and Reform Group.  Supply Management beat me to it so see this for a good explanation of what is known so far. I'm trying to find out more – including what impact on or relationship with OGC the new body has.

And of course I’ll be sending them my cv…. But hang on, damn it, I’m a consultant!

Anyway, more to come on this no doubt.

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Voices (4)

  1. Jonathan Webb:

    Well, a recent report by the NAO and ONS suggests that there are substantial opportunities for savings were the central departments to co-ordinate their spend – as noted above.

    Although, I do agree with you over the “real” cuts are inevitable given the scale of the deficit. An interview on BBC Radio 4’s Today, David Cameron pulled back from his “efficiency” claims whilst in Opposition, stating that he didn’t quite have the resources to examine public spending in its entirety. With the market’s nosedive, and a string of hints, it looks as though another trance of cuts are coming our way. Possibly as early as June.

  2. Alex:

    Yes, I liked the bit about first class travel too! Am sorely tempted to send Mr Laws names of a few people who urgently need to start getting acquainted with Pendolino carriages A-D…

    Re stationery, check out this piece in Public Finance by the Audit Commission about local authorities stationery procurement http://bit.ly/cDeCuA. A drop in the £136 billion ocean maybe, but an area where efficiency savings have virtually no impact on service quality.

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