Whitehall drive to save billions 'must be sustained' says watchdog

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Whitehall has made big savings in the way it operates but longer-term changes are needed to ensure the process is sustainable, the body which monitors government spending has said.

The National Audit Office said it was confident the figure of £5.5bn in savings reported for 2011-12 was reliable and of ministers' leadership.

But it said it was not "fully clear" how £20bn in new savings would be made.

Appreciation of the impact on services must be "more sophisticated", it added.

The Cabinet Office said it was pleased with progress made since 2010 but the pace of change must be "accelerated".

When it came to power in 2010, the coalition government set up the Efficiency and Reform Group within the Cabinet Office to co-ordinate the drive for savings across Whitehall and efforts to make the machinery of government more productive.

'Aspiration'

It identified a number of areas where action should be taken - including more efficient use of property, restrictions on the use of consultants and temporary staff, better procurement practices across departments, a moratorium on major IT projects and tight controls on recruitment and government advertising.

Reviewing progress in 2011-12, the spending watchdog said there had been "substantial reductions" in annual spending and the Efficiency and Reform Group was itself providing "value for money".

Start Quote

Although we are pleased with the savings we have achieved since the general election we need to accelerate the pace of reform”

End Quote Cabinet Office

As in 2010-11, it endorsed the level of savings reported by government and it also welcomed the lead provided by Francis Maude, the Cabinet Office minister in charge of the unit, and the "close links" with government departments.

But it warned that savings in some areas were less sustainable than others, pointing out that the yield from the advertising controls and re-negotiation with suppliers was lower than the year before.

While progress was being made, it said, there had not been enough focus on the sustainability of savings and more emphasis was needed on long-term changes to how government works rather than on "imposing central spending controls".

It also said there needed to be more clarity about planned savings targets in the current year and next year and how they would be achieved.

"It is not fully clear how the group intends to make the reforms necessary to secure £20bn of annual savings over the rest of the spending review period," it said.

"Among the remaining weaknesses identified by the National Audit Office [NAO] are that strategies include large savings ambitions but the plan for meeting the £20bn savings aspiration is still in its early stages."

'Waste of money'

The Cabinet Office said taxpayers expected "nothing less" of government than to reduce its own operating costs.

"We are pleased that the NAO has confidence in the £5.5bn of savings we reported in 2011-12," a spokesman said.

"This government is working to drive up efficiency, slash costs and help us get ahead in the global race. It's this tough, new approach which has clamped down on the waste of taxpayers' money we saw in the past and helped us save hundreds of pounds for every working household.

"Although we are pleased with the savings we have achieved since the general election we need to accelerate the pace of reform."

The government is due to set out progress it has made over the past year in the coming months.

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