Govt efficiency savings questioned

Just a quarter of the government’s claimed efficiency savings have been verified by the National Audit Office (NAO), raising questions about the remaining £9.8 billion.

The watchdog’s annual report into progress towards the Gershon efficiency savings today finds only £3.5 billion, or 26 per cent, of the £13.3 billion the government claimed to have saved last year can actually be confirmed.

It says a further £6.7 billion may end up being saved but warns that “measurement issues and uncertainties” remain. Critically, the NAO says £3.1 billion of the supposed savings are far from being confirmed and may indeed be “substantially incorrect”.

“When I last reported on the efficiency programme, nearly a year ago, I concluded that reported efficiency gains should all be treated as provisional,” said auditor general John Bourn.

“Since then, progress has been made in improving the robustness of how gains are measured. But many reported efficiency gains still carry a significant risk of inaccuracy.”

However, the chief secretary to the Treasury, Stephen Timms, defended the government’s record, saying the NAO report revealed “clear evidence of positive change with significant improvements to efficiency in public services”.

He added: “These savings are robust, and with efficiency gains now of around £15 billion, we continue to show substantial progress towards our target.these savings free up resources to invest in schools, hospitals and other vital frontline services.”

Sir Peter Gershon’s recommendations on how government could improve the way it delivered public services, with total savings of £21.5 billion a year, were accepted by the Treasury in 2004 and the department has since claimed significant progress towards this.

But today’s report raises concerns about both the savings claimed so far, and also the progress made in the way this is achieved.

In September, ministers claimed to have cut civil service jobs by 45,551, on a target of 70,600, which the NAO accepts is “significant”. But it warns claims to have moved 9,412 staff to frontline posts, out of a target of 13,500, are harder to confirm.

This is mainly because there is little agreement within government as to what counts as frontline staff. Sir John warns this is a sign of a wider problem of how to measure efficiency across all departments, and calls for much tougher internal audits on this.

Today the head of the Public and Commercial Services (PCS), which represents thousands of civil servants and recently organised strike action against staff cuts, said it was “completely unacceptable” that the impact of these cuts was not properly measured.

“The government may pat itself on the back about its progress with the Gershon agenda, but the evidence of PCS members suggests that job cuts are leading to delays in areas such as benefits and jobseeking, as well as tax,” said Mark Serwotka.

Neil Bentley, director of public services at the Confederation of British Industry (CBI), added: “Driving greater efficiency should be intrinsic to the business of government, not for the sake of grabbing headlines but to achieve a culture of continuous improvement in service delivery.”