Over £3.4bn saved as government ramps up cost-cutting program

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  • Significant sums saved in 2020/21 as the government responds to the pandemic
  • Government Efficiency Minister Jacob Rees-Mogg to set targets as he calls for accelerated cost-cutting
  • Better use of data and better digital expertise are key drivers of savings

More than £3.4billion has been saved in 2020/21 through successful efforts to improve efficiency in Whitehall, maximize value for taxpayers and reinvest more money in vital public services.

Significant savings were achieved through reduced fraud and leverage losses (£1.8 billion), improved purchasing decisions (£1.4 billion) and more efficient use of digital services (£142m).

Data matching, for example, has helped tackle fraudulent claims for tax relief and identify inappropriate PPE contracts to terminate, saving over £138m. More than £10m of disability badge fraud has also been detected, along with just under £7m of illegal claims for housing benefit.

The Cabinet Office’s Debt Market Integrator (DMI) has made it easier for departments to access debt collection services, recovering £373m of public funds which would not have been possible otherwise.

The Central Digital and Data Office, which advises departments on best practice in the use of digital and data services, helped reduce digital spend by £137m while specialist buying teams generated more than £1billion in savings by ensuring departments pooled resources to purchase goods and services.

Government Efficiency Minister Jacob Rees-Mogg hailed the savings and called on the civil service to step up the efficiency drive:

Taxpayers have the right to expect every penny of their money to be accounted for before it is spent.

These numbers show that you don’t have to sacrifice quality to get better value, and I want to accelerate progress.

We ensure that the public service meets key government priorities while ensuring the best possible value for taxpayers.

The Declaration on Government Reform committed to increasing transparency and supporting ministries through a stronger intergovernmental network. This has led departments to intelligently share data among their purchasing teams, pool resources, and reduce the cost of goods and services.

To further reduce costs, departments will be required to set targets that measure their ability to achieve the highest level of public service while reducing expenditures.

MP Simon Clarke, Chief Secretary to the Treasury, said:

The £3.4 billion saved last year shows that we can achieve better results with the money we spend.

We know we need to go further, the new Chancellor’s Cabinet level Efficiency and Value for Money Committee will spare no effort as we investigate all Government spending to ensure we get it right the maximum for the taxpayer.

Disclosure of savings was a key recommendation of Lord Maude’s review of cross-functional functions and the operation of expenditure controls.

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