Public Accounts Committee casts doubt on government efficiency saving claims

The government’s claim to have achieved billions of pounds in efficiency savings “does not stand up to close scrutiny”, according to an influential group of MPs.

A report by the Public Accounts Committee said there was a “question mark” over the reliability of nearly £10bn – three-quarters – of the savings claimed.

The government’s efficiency programme across the public sector was designed to achieve savings of £21.5bn a year by 2007-08 to improve front-line services, to reduce Civil Service posts by more than 70,000 and to reallocate a further 13,500 posts to front-line services.

Edward Leigh, chairman of the committee, said too much of the data on which claims of gains were founded was unreliable.

“A focus by the government on the efficiency of its departments is extremely important. But efficiency gains must be real and demonstrable. Our committee found that there is a question mark over the reliability of nearly £10bn worth of the savings claimed.

“They must be deliverable year after year and not be one-offs. The cost of achieving them must be taken into account. And they are not genuine if, as we have found in a number of cases, they are achieved at the expense of the quality of the service provided.”

However, the report said some of the reported gains were robust, such as the £200m saved each year by the Home Office through reducing the cost of asylum accommodation.

Earlier this week in the Pre-Budget Report and Comprehensive Spending Review, the Treasury claimed a total of more than £20bn in annual efficiency savings.

The Public and Commercial Services Union (PCS) echoed the report’s findings that efficiency projects were having an adverse impact on service quality.

Mark Serwotka, PCS general secretary, said: “The report rightly recognises what our members have been experiencing all along: that the quality of services is suffering due to the efficiency programme.

“With the government looking to save a further £30bn over the next three years through so called efficiency savings, it is difficult to see how services will not continue to suffer if they continue on the same path.”

A Treasury spokesman said the government would respond to the report in due course.

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