June 11, 2014
The workplace features heavily in the latest round of cost savings announced by the UK Government. Of the £14.3 billion of cost reductions, £5.4 billion has been cut in the procurement of goods and services, with the Cabinet Office drawing particular attention to the use of consultants (which is probably the bulk of it), and the use of printer cartridges and paper (which isn’t). In addition, around £600 million was saved with the divestment of unused buildings and an increase in the number of departments sharing offices. The savings are driven by the Efficiency and Reform Group (ERG) which was set up by the Treasury and the Cabinet Office in the wake of the 2010 general election, and works with departments to make savings and address what it considers wasteful spending. This year’s savings follow £10 billion saved for 2012 to 2013, £5.5 billion in 2011 to 2012 and £3.75 billion in 2010 to 2011.
In outline, savings have been found in the following ways:
£5.4 billion has been saved by improving government’s commercial contracts, including a radical overhaul of central government procurement through the new Crown Commercial Service which strengthens the government’s business-like approach to how it buys goods and services.
Over £200 million has been saved by improving government’s digital services and moving more services online, ensuring that citizens’ experience is simpler, clearer and faster. The government has also radically overhauled technology spend to get the best possible value for money. For example, £62 million was saved by bringing Directgov and BusinessLink websites onto GOV.UK.
£0.6 billion has been saved through selling empty buildings and exiting expensive rentals in sought-after locations. More government departments are now sharing office space. An example is One Horseguard’s Road which now houses the majority of HM Treasury, the Department of Culture Media and Sport, the Northern Ireland Office, and parts of the Cabinet Office which has vacated other buildings.
£3.3 billion has been saved by tackling waste and inefficiency through large scale projects. For example the Highways Agency Major Roads programme has saved nearly £380 million across schemes, including smart motorway projects.
Workforce reform (aka job cuts)
£4.7 billion has been saved by reducing the size of the civil service, now down 16 percent since 2010, and reforming civil service pensions.