Page last updated at 11:21 GMT, Thursday, 25 March 2010

Darling denies 11bn departmental savings are 'fantasy'

NHS call centre
The NHS can save money in IT and procurement, ministers argue

Alistair Darling has defended plans to make £11bn of savings across government in the face of opposition claims that they amount to "fantasy cuts".

Departments, ranging from health to defence, will have to make large three-year savings to help cut the deficit.

The chancellor denied Labour had just woken up to the need for action, saying it had saved about £25bn since 2005.

The Conservatives said waste had become rife under Labour while the Lib Dems said the plans lacked any real detail.

Ministers first announced the £11bn "efficiency savings" target in December, with the aim of achieving it by 2012-13.

Details of what this means for individual departments emerged on Tuesday although the information was not included in Mr Darling's Budget statement - the last before the general election.

Health savings

The Department of Health will have to make the biggest contribution, with the health service in England asked to save £4.35bn.

There is still a lot of detail missing
Shadow Chancellor George Osborne

It says this says can be achieved through procurement, savings in its national IT programme, energy efficiency, better use of property and reducing staff sick leave - a proposal questioned by the opposition.

Labour is committed to halving the budget deficit over four years through a combination of tax rises, spending cuts and savings as well as the proceeds of higher tax receipts as growth picks up.

The £11bn efficiencies total is part of the £78bn that the government will need to find in order to meet its deficit-cutting pledge.

Labour says its plan is realistic and contrasts with a lack of clarity on the issue from the Conservatives.

Mr Darling said all public organisations, including the NHS, could be more efficient and the exercise need not threaten frontline services.

"It isn't something new," he told BBC Breakfast. "It is just every day, every year, you have to ask yourselves can you do things better.

"There is nothing wrong with this. It is what you would expect in any organisation. People are asking themselves how can you extract the maximum possible value for the amount of money you spend."

Ministers say some departments, including health, will be able to reinvest some savings into "front line" services.

The BBC's Deputy Political Editor James Landale said if Labour win the election, the balance between actual cuts and "redeployed savings" would not become clear until a comprehensive spending review due to begin in the autumn.

He stressed the details outlined on Tuesday were a "wish list" rather than a concrete programme of savings but, wherever they applied, the measures would feel like "real cuts" to staff directly affected.

'Missing detail'

The Conservatives said that without a spending review, ministers could not accurately measure any savings after 2011.

"There is still a lot of detail missing," Shadow Chancellor George Osborne said, adding that it was imperative that a new government got to grips with unnecessary spending.

Work & Pensions - £500m
Justice - £343m
Legal aid and courts - £360m
Business - £300m
Treasury - £261m
Transport - £90m
Highways - £90m
Home Office - £350m
Police - £346m
Communities - £200m
Cabinet Office - £25m
Defence - £700m
Health - £4.35bn
Education - £550m
Foreign Office - £50m

"That means dealing with the bloat, waste and bureaucracy which has grown up in Gordon Brown's government."

The Lib Dems said £6bn of the savings were "unspecified", meaning uncertainty for people working in the departments concerned and for people reliant on services provided.

"The government produced a list of efficiency savings which turned out to be pretty unsubstantial," its Treasury spokesman Vince Cable said.

"The Conservatives have not produced anything specific either."

Health experts have said the proposed NHS savings are larger than at any time in recent history.

"None of us in our professional lifetime have seen a change like the change that is coming in terms of the greater emphasis on efficiency," Professor Bernard Crump, from the NHS Institute for Innovation and Improvement, told the Commons Health Select Committee.

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