Government announces £3.3 billion efficiency savings

The government has announced that it delivered £1.2 billion of operational savings and £2.1 billion of benefits from fraud measures, property asset sales and new commercial models last year.

The savings were delivered through greater efficiency in the procurement of common goods, services and information technology; more efficient management of office space and the disposal of surplus government property; and through tackling fraud, error and uncollected debt in welfare spending.

Savings in 2015/16 consist of: £1.2 billion of operational savings from reforming government’s commercial activities through improving government’s ways of purchasing, improving the provision of specialist expertise in complex commercial procurements, negotiations and disputes, and reducing the cost of the government’s property estate; £339 million through setting standards and providing assurances through the Government Digital Service; around £805 million in savings from a number of cross-government reform packages aimed at tackling fraud, error and debt; and £973 million through the sale of surplus government property.

The government maintains that it is on-track to deliver the manifesto commitment of between £15 billion to £20 billion of annual efficiency by the end of the Parliament. The government intends to identify an additional £3.5 billion of savings in 2019/20 through the Efficiency Review, which will report in autumn 2017.

Ben Gummer, Minister for the Cabinet Office, said: “Ensuring that our public finances are on a sustainable path is vital to securing a strong and stable economy that works for everyone. We have made significant steps forward in tackling fraud, selling off redundant government property such as the former Civil Service College in Sunningdale and making better use of modern digital technology to drive savings.

“The government is committed to delivering value for money for taxpayers and the Cabinet Office will continue to drive savings right across departments as set out in the Spending Review in 2015.”