Treasury hands buyers the biggest cost saving target

16 December 2004

16 December 2004 | David Arminas

Procurement will bear the brunt of the government's drive for £21.5 billion of efficiency savings by 2008, according to an OGC document for the Treasury.

In the first year, 2005-06, improved procurement will make up £2 billion of savings. But by the final year, 2007-08, procurement's share will have risen to £7 billion - the largest single proportion (see chart below).

The next biggest savings will be from better "productive time" by doctors, nurses, teachers and other public servants, and will account for more than £6 billion.

These amounts could rise because efficiency gains designated in a miscellaneous section may later be put in to other categories such as procurement and productive time.

But the employers' body Confederation of British Industry has questioned the validity of the OGC savings, calling them "confusing and vague".

It said there is a lack of detail about how the savings will be made, and added that pay and job cuts for teachers, for example, would be poorly classified as measurements of efficiency.

The efficiency savings are part of chancellor Gordon Brown's spending review, and include cutting 80,000 jobs.

A Treasury spokeswoman said: "The efficiency challenge will create a demand for more skilled people. This will be met through recruitment and training".

Where the government expects to save money
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