New body to send shockwaves through departmental spending

24 May 2010

24 May 2010 | Lindsay Clark

The UK government today revealed it is creating a central Efficiency and Reform Group that will have “Draconian” control over government spending.

As part of an announcement to cut £6.2 billion from this year’s public sector budget, chief secretary to the Treasury David Laws added that the group was necessary to send a “shockwave” through government departments to achieve tighter control of contracts. “If we do not do this, we will not get the step-change required. We are going to be very tough about this,” he said.

Laws and Cabinet Office minister Francis Maude will chair the Efficiency and Reform Group to oversee the cuts.

A Cabinet Office statement said the group would have “the power to make sure departments work together to tackle waste and improve accountability across a range of areas, including ICT spend, procurement, advertising and marketing spend, and Civil Service expenses and recruitment”.

It said the government will conduct centralised procurement for commodity goods and services to drive down prices, implement an immediate freeze on all new ICT spending above £1 million, and review the government’s biggest projects to see where costs can be reduced or wasteful work stopped altogether.

Outside local government, but across all other departments, the government committed to immediate negotiations to achieve cost reductions from major suppliers as part of a move to save £1.7 billion on contracts, a Treasury statement said. Measures also included £1.15 billion cuts in discretionary spending such as consultancy and travel, £95 million saving in IT spending, and £170 million in reduced property costs. There was also a commitment to save £520 million by cutting other lower-value spend.

SM understands that “office solutions” – including, paper, printers and furniture – will be the first commodity to be tackled under the new system.

A Treasury statement said: “The Efficiency and Reform Group will be formed by pulling together existing capabilities, drawing on expertise of officials from across Whitehall.

“As well as helping departments to deliver savings, the group will oversee an immediate freeze on non-critical spending on consultancy, advertising and recruitment of non-frontline civil service staff. The Efficiency and Reform Group will be comprised of existing civil servants from across Whitehall, and will be located within existing premises, with no additional cost to departmental budgets.”

In addition, the government committed to a civil service recruitment freeze – except in important front-line and business-critical areas – and to significantly cut the number of temporary staff. It will also halt the signing of any new property leases or lease extensions unless they are approved centrally.

Details of departmental spending cuts are available on the Treasury website.

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