Monday, August 01, 2011

On 'efficiency savings'

The Tories boast of making £3.75bn in 'efficiency savings'.  Seymour investigates:

Francis Maude, the Cabinet Office secretary, claims the government has found £3.75bn in savings during the time it has been in office. This, he says, vindicates the Tories' pre-election claim that cuts to employers' national insurance contributions could be funded by efficiency savings. The largest such savings, the government says, were found by cutting consultancy spending, renegotiating contracts and reducing spending on marketing. This, says Maude, has delivered a "staggering" reward.

There are some problems with this picture. The total "austerity package" planned by the government amounts to some £126bn by 2015-16, of which 76% comes from spending cuts. Compared with the total cuts, the figure cited by Maude as "staggering" is trifling (according to figures from the IFS)...