Public Services

Whitehall departments to model further cuts with 2017 Efficiency Review

Neil Merrett Published 28 February 2017

Treasury chief executive says there is “further to go” to meet government efficiency aims; departments asked to model fresh 3% and 6% cuts to their budgets


Whitehall departments have been asked to set out likely scenarios of proposals to cut a further 3% and 6% from their budgets as part of a wider push to curb central and local government costs through an efficiency review targeting "modern, high-quality" public services.

The requirements will come at a time of concern both in parliament and the wider public sector about ensuring key public service delivery, while also undertaking technology-focused transformation to reform local authority and care services.

With the last scheduled Spring Budget set to be delivered by Chancellor Phillip Hammond on March 8 as part of plans to move away from having a separate autumn statement update, the Treasury has issued an update on its aims for the Efficiency Review.

A single annual budget updating parliament on the government's spending plans will be delivered every autumn.

"The review, which was announced at Budget 2016, will generate £3.5bn of savings in 2019 to 2020, with up to £1bn to be reinvested in priority areas," said the notice.

As part of this process, the Treasury noted that Whitehall departments were commissioned to set out proposals for how they expect to meet these aims by modelling the impacts of separate single digit cuts to their budgets.

Further updates on the Efficiency Review, which is expected to be conducted on a department by department basis, will be given in the autumn.

The Treasury argued that both the NHS and core school budgets are protected and will not therefore fall under the scope of the Efficiency Review.

Meanwhile, efficiencies to be realised in local government will be used to help meet pressures in social care that the authorities are required to provide. Social care is also expected to be increasingly integrated with services provided by NHS bodies as part of attempts to curb demand pressures.

"The government will also maintain its commitment to meet the NATO target of spending 2% of GDP on defence and for the defence budget to rise by 0.5% above inflation each year of this parliament," said the update.

The review work has been commissioned by Cabinet Office minister Ben Gummer and is expected to form part of a refresh of single departmental plans.

Treasury chief secretary David Gauke said the ongoing review focus formed part of efforts to deliver public services as efficiently as possible

"There has been considerable progress, but there is further to go and the whole of government is working together to consider how we can live within our means while delivering maximum value for every pound of taxpayers money," he said.

Care challenge

In a report published earlier this year, the National Audit Office (NAO) warned that efforts to integrate health and social care, seen as an important factor to reform public service delivery, were stalling.

It argued that, to date, progress has been "slower and less successful than envisaged" while at the same time not delivering all of the expected benefits for patients, the NHS or local authorities.

The auditor concluded that the government's plan for integrated health and social care services across England by 2020 is at significant risk.

Amyas Morse, head of the National Audit Office, said, "Integrating the health and social care sectors is a significant challenge in normal times, let alone times when both sectors are under such severe pressure. So far, benefits have fallen far short of plans, despite much effort. It will be important to learn from the over-optimism of such plans when implementing the much larger NHS sustainability and transformation plans.

"The Departments do not yet have the evidence to show that they can deliver their commitment to integrated services by 2020, at the same time as meeting existing pressures on the health and social care systems."

Public sector IT managers group Socitm also identified work on health and social care integration and a wider focus on secure, shared systems among its key aims for research over the course of 2017 to help meet challenges facing authorities.

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