Cross-Government Cost Cutting

Lord Howell of Guildford Excerpts

Tuesday 6th December 2022 Lords Chamber

[Baroness Penn (Con)]

Can I reassure the noble Lord that these questions are considered in spending reviews? They are also considered as part of the process of collective agreement when new policy is made between the periods of spending reviews. The noble Lord mentioned the MoJ and the Home Office; they will grow by, respectively, 3.6% and 3.1% a year over this Parliament.

[Lord Howell of Guildford (Con)]

The noble Lord, Lord Bird, made a very sound and good point. Would the Minister recommend to her Treasury colleagues that the “10%/slash everything” approach to public expenditure used in recent times is not the best way of controlling and curbing the size of the public sector, of improving its efficiency or of cutting out waste? There are techniques that have been tried in the past, namely the policy programme budgeting system, learned from the original Bureau of the Budget in America 40 years ago, and which should be revisited. Such techniques are much more effective in delivering real, effective, cost cuts, which take into account all the side effects that can sometimes overwhelm the original attempt at economy.

[Baroness Penn (Con)]

My noble friend is right: we must ensure that when we undertake these exercises, we really are delivering efficiency and value for money gains, rather than short-term fixes for departments’ budgets that, in the long term, may create other problems. I can reassure him that no figure is attached to the current exercise; it is about working with departments to see where they can find efficiency savings to help them manage the pressures they are under.