SINCE May 2010, the Cabinet Office has led a cross-Government programme, working closely with the Treasury, to ensure that taxpayers’ money is focused on front-line services.
With rising public expectations for high-quality services, coupled with the huge budget deficit we inherited in 2010, the coalition faced a huge challenge to do more – and better – for less.
Over this Parliament, we have secured unprecedented levels of savings, delivering for successive years £3.75bn, £5.5bn, and £10bn, compared with spending in Labour’s last year. For 2013-14, we saved £14.3bn, against a 2009-10 baseline.
That is testament to the hard work of civil servants across Whitehall. Last July, the Auditor General recognised the pace and priority we had injected into the efficiency agenda.
We started this with the introduction of tight spending controls just days after we entered government, and these controls have delivered the largest share of savings.
Since 2010, we have negotiated billions of pounds off expensive legacy contracts and cut central government spending on consultants and interim workers by over half. Like for like, the civil service is 21 per cent smaller. I publish our annual State of the Estate report, which shows that we have exited in aggregate more than one building every day since May 2010, reducing the total size of our estate by 20 per cent.
As part of our long-term economic plan, our aim was to save £20bn through central government efficiency and reform for the last year of this Parliament, including by reducing losses to the public purse through fraud, error and uncollected debt.
We are on course to meet and indeed exceed this target. Up to January 2015, we have already identified £11bn of efficiency and reform savings – over a third up on the same point last year – with the largest savings coming in the final quarter every year so far.
With fraud, error and debt benefits still to be counted, we are well on the way to the £20bn target. The full year’s savings will need to be confirmed by independent audit, and, as in previous years, we will invite the National Audit Office to undertake this.
We have made significant progress in transforming government and cutting costs, but this is only the beginning. At the Autumn Statement, we published, with the Treasury, a document entitled “Efficiency and reform in the next Parliament”, which set out our intention to save a further £10bn for 2017-18 and £15bn to £20bn for 2019-20 compared with the current year.
We now set out our next steps. We will implement a new approach to land and property, based on central ownership and management of assets and departments paying market-level rents. This will provide greater incentives for departments to rationalise space, as well as releasing land and property for productive use – for example, for up to 150,000 homes. To do this successfully will mean working even more closely with local government.
The UK is now a world leader in digital government, and we will work with local government to take this transformative approach into the wider public sector. Digital services improve the citizen experience, while being significantly cheaper to provide. We will continue to reduce the cost of technology in government, as extravagantly expensive legacy IT contracts fall in over the coming years. To that end, I have signed an innovative deal to create a joint venture for data hosting that will save up to £100m.
All of this work has been driven by an increasingly strong corporate centre, supporting and challenging departments to work together to maximise efficiencies and improve services. We are strengthening central leadership across 10 key cross-departmental functions, including commercial, digital and technology, project management, legal and human resources.
The chief executive of the Civil Service will lead the build-out of this strengthened model, under which the Treasury and the Cabinet Office will work together to support departments to continue their programme of reform and to deliver future spending consolidations.
Departments will need to own more of the transformation agenda. We are recruiting 25 commercial directors across government and launching a new project leadership programme at Cranfield University. This programme will help to build project management skills in parallel to our successful major projects leadership academy.
We have made substantial and long-overdue improvements to the way government operates, but much more lies ahead. We have shown that we can drive down the cost of government while improving the quality of services. We have shown that we can get more and better for less, and that we have a long-term plan to deliver it.
Francis Maude is the Minister for the Cabinet Office.Since