Cabinet Office: Efficiency and Reform Programme

(Limited Text - Ministerial Extracts only)

Tuesday 15th July 2014 Lords Chamber

[Lord Risby]

To ask Her Majesty’s Government what savings the programme of Efficiency and Reform, run by the Efficiency and Reform Group led by the Cabinet Office, has achieved since 2010.

[Lord Wallace of Saltaire (LD)]

My Lords, for the financial year 2013-14, the Cabinet Office Efficiency and Reform Group, which was set up in June 2010, helped government departments to make savings of some £14.3 billion. This follows £10 billion savings achieved in the financial year 2012-13, £5.5 billion in the financial year 2011-12, and £3.75 billion in the financial year 2010-11. These savings are calculated against a 2009-10 baseline.

[Lord Risby (Con)]

My Lords, the whole House will welcome the return to economic growth. However, given the continuing high deficit and debt, does my noble friend accept that living within our means and also controlling the cost of government remain vital objectives? Although I welcome enormously the progress that has been made so far, can my noble friend indicate any further progress on cross-departmental procurement activity and the effective involvement by SMEs in this whole process?

[Lord Wallace of Saltaire]

My Lords, that is a very broad question. Having seen this process close up, I have been struck by the extent to which Whitehall is a confederal system in which departments have to some extent resisted control from the centre. One of my favourite projects in this efficiency and reform scheme has been to centralise the collection of waste paper and build a closed loop system, from which we now save some £4 million—a small amount, but all contributing from building a much more effective system for recycling paper within Whitehall.

[Lord Roberts of Llandudno (LD)]

My Lords, does the Minister agree that not every saving is praiseworthy? For instance, I read in the report that £250 million has been saved on Network Rail repairs. Is it not better that we look first before some savings are made to ensure that they do not undermine the traffic and do not undermine the safety of our railways?

[Lord Wallace of Saltaire]

Of course, as with taxation, there are a range of different objectives in what you are attempting to save. However, much of what the Efficiency and Reform Group has been doing is to apply the sort of careful consideration of how best to ensure that you make the best use of centralised and long-term contracts, as supermarkets do in their relationship with their suppliers. The creation of the Crown Commercial Service earlier this year and of the Major Projects Authority in April 2011 are very important factors in making Whitehall officials more competent and efficient in dealing with the commercial world.

[Baroness Hayter of Kentish Town (Lab)]

We support any work that is done to cut costs, but is the Minister not slightly ashamed when he asks civil servants almost to count the paperclips when the Government then waste £1 billion on selling Royal Mail too cheaply?

[Lord Wallace of Saltaire]

My Lords, the noble Baroness knows that floating companies and making IPOs are always very difficult matters to estimate. We can go on arguing about that particular transaction for a long time, but I am very proud of what the Efficiency and Reform Group has included. I have not yet touched on the digital transformation in which, as we all know, the move from using paper to using digital in transactions with government offers enormous potential savings.

[Lord Foulkes of Cumnock (Lab)]

The noble Lord, Lord Roberts, asked a very wise question. Is it not the case that most of the savings will be made by destructive cuts in capital expenditure rather than cuts in revenue expenditure?

[Lord Wallace of Saltaire]

No, that is not the case. If I may carry on about the Government Digital Service, it is a wonderful example of insourcing, bringing people in from the Guardian online and various other places and saving an enormous amount of money that was previously being spent on outside consultancies with large, usually American-owned IT firms. We have managed to save a lot of money and have produced a much better result. We have also saved a great deal by focusing on redundant property. For example, different government departments had 18 different buildings in Bristol. The efficiency gains that one can make from that are very considerable.

[Baroness Symons of Vernham Dean (Lab)]

The noble Lord gave a very interesting answer to the previous question—

[Lord Brabazon of Tara (Con)]

If we did sell the Post Office too cheaply, surely that pales into insignificance in comparison with the sale of the gold reserves some years ago.

[Lord Wallace of Saltaire]

My Lords, I do not want to be too partisan on this question. I am focusing on the efficiency gains that this Government have achieved very creditably in the past four years.

[Baroness Symons of Vernham Dean]

My Lords, perhaps I may go back to the question before last as the noble Lord gave a very interesting answer. Can he tell us how much actually has been saved by the digital insourcing that he described?

[Lord Wallace of Saltaire]

The previous Government spent an enormous amount on outside consultants.

[Baroness Symons of Vernham Dean]

But how much are you spending?

[Lord Wallace of Saltaire]

I am sorry, but I do not have the figures before me on that. I shall have to write to the noble Baroness later. One substantial element in these savings has been the reduction in outside consultancy and outside contracts. The Government Digital Service has saved a great deal of money. I would go further and say that, in my experience, the quality of the people who work in the Government Digital Service is absolutely outstanding.

[Baroness Symons of Vernham Dean]

But the noble Lord will write.

[Lord Wallace of Saltaire]

I will write.