Page last updated at 16:35 GMT, Monday, 7 December 2009

Smarter government statement

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The government has set out plans to save £12bn as part of the effort to slash the public deficit, with senior civil servants facing a pay squeeze.

Treasury Chief Secretary Liam Byrne said spending on consultants and publicity would be slashed, staff would be moved from London to other parts of the UK and 123 quangos faced abolition or rationalisation as part of the efficiency drive.

In a Commons statement announcing the Smarter Government command paper on 7 December 2009, Mr Byrne told MPs there would be new entitlements to high quality public services in health, education and policing.

Mr Byrne said he would cut back on ring-fenced budgets and national targets in the public sector.

He said a review of senior public sector pay had been commissioned and until it reports he will personally review any proposals for state salaries topping £150,000.

The announcements come before Wednesday's pre-budget report in which Chancellor Alistair Darling will outline his tax and spending plans against a grim financial backdrop.

Shadow chief secretary Philip Hammond said the "reheated" policies showed Labour's "failure to get a grip" on public service reform.

Mr Hammond challenged ministers to match Tory pledges to save billions from the public sector, and told MPs that the government was echoing the "quango cull" already advocated by opposition leader David Cameron.

For the Liberal Democrats, Vince Cable asked: "If the government knew there was inefficiency why hadn't it already dealt with it?"

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