Can Whitehall deliver on cuts?
MPs fear Government departments incapable of reducing required cost
MPs have expressed “grave concerns” about the ability of Whitehall departments to deliver efficiency savings without cutting frontline services.
The influential cross-party Public Accounts Committee (PAC) yesterday questioned whether, given their poor performance in the past, departments were “ready” for the challenge ahead.
Of the £35bn “value for money” savings demanded by the former Labour Government in 2007, only £15bn had been reported by March this year, it said. In addition, the National Audit Office found that only 38% of the efficiencies reported by departments had been genuinely sustainable efficiency savings.
In a report yesterday, the PAC said: “The inability of departments to improve value for money casts doubt on Government's ability to reduce costs now, while minimising the impact on frontline services.”
The committee raised particular concern over the Treasury's hands-off role in the delivery of efficiency savings.
“We are concerned at the implication from Treasury that it |will simply reduce departments' budgets and then walk away from responsibility for the delivery of the level of savings required across Government,” it said.
It added: “The current financial environment is fundamentally different from the position when the (Value for Money) Programme was launched in 2007, with substantial cash reductions required over the next four years by most departments.
“The scale of savings needed will require much more radical action, but the results from this |programme left us with grave |concerns as to whether departments are ready to implement |effectively a programme of value-for-money savings.
“There is a serious risk that departments will rely solely on cutting frontline services to reduce costs, without adequately exploring the potential to reduce costs through other value-for-money improvements.”
Chancellor George Osborne has hit back at the claims. He said the cuts would be a “challenge” but would be achieved through greater transparency and accountability.
The “shockingly poor” quality of financial data would also be improved.
Cabinet Office Minister Francis Maude said the Government would “leave no stone unturned” in its bid to cut waste.
“We said that our priority would be to take the cost out of the centre of Government so we could protect the frontline and, in just a few months, that is exactly what we have done,” he said.