'Grave concerns' over efficiencies
Published 04/11/2010 | 08:02
A cross-party committee of MPs has expressed "grave concerns" about the ability of Whitehall departments to deliver efficiency savings without cutting frontline services.
The influential Public Accounts Committee (PAC) questioned whether, given their poor performance in the past, departments were "ready" for the scale of the challenge ahead.
Of £35 billion of "value for money" savings demanded by the former Labour government in 2007, only £15 billion 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 the PAC said: "The inability of departments to improve value for money in a time of increasing budgets casts doubts on government's ability to reduce costs now while minimising the impact on front-line 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 front-line services to reduce costs, without adequately exploring the potential to reduce costs through other value-for-money improvements."