Employers and trade unions have questioned whether the government can deliver on its efficiency agenda after further targets were set in last week’s Pre-Budget Report.
Chancellor Gordon Brown said the government was making solid progress in its efficiency programme, with Whitehall departments and local authorities reporting gains of £13.3bn by September 2006. Brown now wants baseline savings of at least 3% for the 2007 Comprehensive Spending Review period, with departmental admin budgets cut by 5% per year over the same period.
The CBI said it supported the constraints placed on individual departments, but the government must ensure that waste, and not frontline services, are cut. It has repeatedly raised concerns about the validity of the government’s claims of progress. It said that no Whitehall department was using the measurement methodology set out in the Gershon efficiency review, making actual headcount reductions and savings difficult to quantify.
CBI director-general Richard Lambert said: “The most important outcome of the programme must be to embed efficiency and continuous improvement in Whitehall. The opportunity to do this remains, but there is little evidence of progress to date.”
Mark Serwotka, general secretary of the Public and Commercial Services Union, which represents tens of thousands of civil service workers, said that, by announcing budget reductions, the chancellor was effectively signalling further job cuts. “This is a U-turn on his acceptance that to go further than the recommendations of the Gershon review would put the delivery of frontline services at risk,” he said.
Pre-Budget Report: key points
- Penalties for failing to pay the national minimum wage (NMW) will rise. A 50% increase to £9m to monitor and police the NMW
- At least 3% savings per year across central and local government as part of the 2007 Comprehensive Spending Review
- New ambition of ‘world-class’ skills, taking forward Leitch Review recommendations
- Public sector pay deals of no more than 2%
- Investment in education to rise to £10.2bn in 2010-11
- Measures to boost productivity and growth and to promote research and development
- Increased support for jobseekers and lone parents moving into work
- Driving forward implementation of the Hampton Review’s risk-based approach to regulation