Latest Public Sector News

02.02.12

Government changes needed to achieve cuts

Changes will be needed for Government to hit its savings targets by 2015, a report from the National Audit Office (NAO) states.

A detailed plan is needed for cutting costs, and departments need a better understanding of future costs to deliver services with fewer resources.

Departments spent £7.9bn less in 2010/11 than in the previous year and direct spending was also limited by 2.3%. NAO estimates there are 21,200 fewer full-time staff working across Government and savings have been achieved through reductions in admin costs.

Defra saw the biggest fall in programme spending, by 11%, while the budget for the department of International Development rose by 19%. Total managed expenditure rose by £700m, or 0.1%.

Amyas Morse, head of the NAO, said: “Government departments have been successful in cutting costs and managing within their reduced spending allocations for 2010-11.

“However, most departments will need to cut their spending by much more over the next four years. This will not be possible without their recognizing that short-term measures are not enough and that fundamental changes are needed.

“Departments will achieve long-term value for money only if they identify and implement new ways of delivering their objectives, with a permanently lower cost base.”

A Cabinet Office spokesperson said the Government was “on track to delivery necessary reductions in spending”.

“We promised to leave no stone unturned in the hunt for savings at the heart of government and we have delivered on that promise with over £3.7bn of efficiencies in just one year.

“The National Audit Office has backed our figures 100%, confirming we lived up to our promises and delivered real, tangible savings for taxpayers.”

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