Whitehall savings boosted by property and procurement efficiencies

The joint Cabinet Office and Treasury initiative the Efficiency and Reform Group has exceeded the Government’s savings target by 25 per cent to make an overall saving of £10 billion, Minister for the Cabinet Office Francis Maude announced today. The savings made include; £1.1 billion made by boosting online services and selling empty buildings and exiting expensive rentals in sought-after locations; £1.7 billion by reviewing large scale projects including construction, and stripping out inefficiencies; and a further £3.8 billion was saved in procurement, by linking together departments to buy goods and services.

The new figures published today for 2012 to 2013 also reveal a reduction of £3.4 billion by reducing the size of the Civil Service and reforming Civil Service pensions. The savings of £10 billion are equivalent to almost £600 for each working household across Britain, enough to fund three million primary school places or the building of 500 new secondary schools.

Minister for the Cabinet Office Francis Maude said: “This government is taking radical decisions to make Whitehall leaner and more efficient so Britain can compete in the global race. Civil servants across government are changing the ways they work and we are on the way to managing our finances like the best-run FTSE100 businesses.

“I’m pleased to announce that this work has saved £10 billion, the equivalent of almost £600 for each hard-working family. These are popular savings which support Britain’s deficit reduction and encourage growth.”

“In the first year of this government we saved £3.75 billion compared with the year before the last General Election. In 2011 to 2012 we managed £5.5 billion. The unprecedented £10 billion savings last year shows we have defied expectations and accelerated the pace of reform. There can be no going back to the old, wasteful ways of doing things which we saw in the past.”

As we reported earlier this year a report by property consultancy Knight Frank found that the London economy has been boosted by as much as £3.5 billion as a result of 16 properties in central London including the Department for Business, Innovation and Skills, the Department for International Development, the Land Registry and the Crown Prosecution Service being redeveloped for use by other organisations.

The Efficiency and Reform Group other initiatives include:

  • Cracking down on the use of consultants and contractors, saving £1.6 billion.
  • Driving competition in government bids, saving £24 million by renegotiating one single contract.
  • Exiting 500,000 square metres of property – saving £0.6 billion and reducing the government estate by 5 per cent, the equivalent it says, of 73 football pitches.

The group will continue to work with other government departments towards delivering cashable savings of £20 billion by 2015.