In 2010-11 the government is planning £35 billion of cuts as part of a value for money programme. After years of telling us all public spending was sacrosanct and there is no waste, in more recent years the government has come round to the view that there is considerable scope for reductions in spending to improve efficiency. These Labour cuts have not received enough attention.
The Health department is to find £10.5 billion of them. Ideas include shorter stays in hospitals for patients, lower prices for pharmaceuticals, more efficient back offices and sharper buying of other supplies.
At Education there will be £5.14 billion of cuts. Each school is to find a 1% efficiency cut, whilst the quangos have to find 3%.
Local government has to find £5.5 billion.
The MOD has a disproportionate requirement to cut £3.15 billion, a far higher percentage of its spending. The government proposes a mixture of manpower and purchasing savings.
Transport is to cut £1.96 billion. Ideas include less grant for Network Rail and more efficient procurement.
A hefty £1.94 billion is to be saved by FE and HE, through a mixture of less administrative cost, better buying and delay in offering grants. The FE capital programme is an early casualty and presages general cuts in capital spending elsewhere.
The Home Office has to find £1.69 billion. The police are to use more technology to save police time, whilst the Borders Agency is to use iris and facial recognition to cut costs.
The Ministry of Justice weighs in at £1.08 billion, and the Revenue departments at £788 million through general efficiencies.
Work and Pensions can only manage £1.4 billion despite being the big spender. This is to be delivered through better staff efficiency.
I welcome the government’s conversion to the view that efficiency, quality and productivity can and should be raised throughout government. The dangers are twofold. One, the government will not deliver as promised. Two, the base figures for spending are so inflated that the targets are in some cases too low.
The gap between the best of the private sector and the worst of the public sector is collossal. The gap between the private and public sectors’ average performance is big. We need more demanding targets for improvement, and more Ministerial involvement in delivery.
Over the next few days I will be looking at the main departmental budgets. There needs to be a proper review of all departmental spending, to find more economies more quickly, before the debt mountain crushes us.