The staggering savings were driven by the Cabinet Office’s Efficiency and Reform Group (ERG).
The group applied spending controls to cut expenditure on IT contracts, property, marketing, temporary staff and consultancy. These new savings are in addition to the unprecedented £3.75 billion saved in 2010/11.
The savings, which have been independently audited, are equivalent to each of the following:
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- around £500 per working household in Britain
- the salaries of around 250,000 junior nurses
- the cost of around 1.6m primary school places
Minister for the Cabinet Office, Francis Maude, said:
“Because our controls on spending are working well and saving unprecedented amounts of money [indented quote], I’m determined they will be a permanent feature of good governance.
Last year, this Government beat its own prediction and saved a staggering £5.5 billion from departmental expenditure, on top of the £3.75 billion from our first year in office.”
In 2010 we set up an Efficiency and Reform Group in the Cabinet Office to beef up government’s operational centre and to ensure that Whitehall operated in a more business-like fashion. It’s working well, but we are determined to go even further, because when it comes to spending other people’s money we must always strive to find more efficient and better ways of providing public services.”
The savings of £5.5 billion announced include:
- £1 billion in savings achieved on consultancy contracts and spending
- £390 million of savings from freezing all marketing spend – except when operationally necessary
- £200 million saved by exiting unnecessary properties and not extending unnecessary leases
- Reductions in the size of the Civil Service through stronger controls on non-essential recruitment has contributed to a reduction in salary costs for 2011/12 of nearly £1.5 billion
