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Last Updated: Thursday, 8 February 2007, 14:15 GMT
Whitehall saving claims queried
Money
Ministers say 'good progress' is being made on savings
Government claims to have made 13.3bn in efficiency savings carry a "significant risk of inaccuracy", the public spending watchdog has warned.

Ministers are halfway through a three-year programme to save 21.5bn and say they have achieved 62% of this.

But the National Audit Office (NAO) said departments had "more to do to show that all reported gains are both genuine and sustainable".

The government said it was "delivering on... efficiency ambitions".

The NAO report found there was "clear evidence of positive change".

As an example it said there had been a 1.2bn saving in procuring medicines for the NHS.

'Measurement issues'

But the report suggested a wide difference in the economies claimed.

While the Home Office and the Department for Work and Pensions reported meeting 90% of their efficiency targets by September 2006, the Department for Education and Skills reported only 28%.

The NAO said 51% of total departmental savings claims had "some measurement issues and uncertainties".

Meanwhile, 23% "either do not yet demonstrate efficiency or the reported gains may be substantially incorrect".

Comptroller General Sir John Bourn - head of the NAO - said just 26% of the reported efficiency savings "fairly represent efficiencies made".

He added that, since the NAO had last looked at savings a year earlier, "progress has been made in improving the robustness of how gains are measured".

Job cuts

"But many reported efficiency gains still carry a significant risk of inaccuracy."

The report said some departments were "finding it hard to demonstrate fully that quality [of services] has not been affected" by savings.

Sir John said: "In this spending period, there is more to do to show that all reported gains are both genuine and sustainable."

The report said government claims to have reduced staffing numbers by 45,551 of its 70,000 target were "broadly robust".

But differences in the dates being used for comparisons "diminish confidence in what has been achieved".

Shadow chancellor George Osborne said the efficiency savings were "never properly driven through" by Chancellor Gordon Brown.

Edward Leigh, the Conservative chairman of the Commons public accounts committee, said: "Don't bet your house on the truth of claims by the government that it has already achieved an annual 13.3bn worth of efficiency savings."

'Robust'

The CBI said its research showed 88% of businesses did not believe the government would hit its savings targets.

These were set out in the 2004 Gershon Review of public spending.

It suggested outgoings could be cut by improving procurement practices and use of modern technology, cutting bureaucracy and moving staff away from back-office functions and onto the frontline.

The chancellor hasn't looked at the effect on the services themselves, on the people of this country or indeed the moral of his own workforce
Mark Serwotka
PCS

But Chief Secretary to the Treasury Stephen Timms said: "These savings are robust, and with efficiency gains now of around 15bn, we continue to show substantial progress towards our target.

"And, most importantly, these savings free up resources to invest in schools, hospitals and other vital front line services."

A Treasury spokesman added: "The National Audit Office has been very clear that good progress has been made in measuring efficiency gains.

"With our measurement guidance issued in the last year, systems have improved further, embedding a strong emphasis on assuring service quality."

Loss, not gain

Colin Talbot, a management specialist at Manchester Business School, and an adviser to the Treasury select committee, said the government had "shot itself in the foot".

"Even on the unreliable figures they have achieved very substantial efficiency savings, probably much more than has ever been achieved before in any single efficiency campaign, but by over-promising in the first place and then being very secretive about the information that is given out, over-inflating what they have achieved, they have actually managed to create a loss rather than a gain."

The general secretary of the Public and Commercial Services Union, Mark Serwotka, said the efficiencies had failed the public, especially as some departments had cut staff, leading to less face-to-face time with the public.

"We are for an efficient use of taxpayers' money. The tragedy of this process is that it has been about political headlines, with the chancellor able to say 'look at how many jobs I've cut'.

"But the chancellor hasn't looked at the effect on the services themselves, on the people of this country or indeed the morale of his own workforce."


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