Whitehall to cut £5.5bn of wasteful spending

Chancellor Rishi Sunak is to lead a new drive on efficiency, effectiveness and economy in government spending to ensure departments are delivering the highest quality services at the best value.

Driven by a new Chancellor-chaired Efficiency and Value for Money Committee, the move will ensure the five per cent efficiency target set at the 2021 Spending Review is met across Whitehall and scrutinise strategies to prevent fraud and error. The move will save a total of £5.5 billion with the money being pumped directly back into vital public services.

The Chancellor said the NHS efficiency commitment will double to 2.2 per cent a year - freeing up £4.75 billion to fund NHS priority areas over the next three years. The savings will be the result of the digitisation of diagnostic and front-line services, which has been shown to reduce cost per admission by up to 13 per cent, improving the efficiency of surgical hubs and developing digital tools to cut time spend by NHS staff on admin tasks.

The government says that the increased efficiency target will ensure that the record funding settlement of £188.9 billion a year by 2024-25 for the Department for Health and Social Care is delivering the best possible value for money for the taxpayer, the money saved will be used to fund front line NHS priorities.

The Arm’s Length Body Review will see savings come from better use of property, reduced reliance on consultants, increased digitisation and greater use of shared services, as well as the use of benchmarking to drive efficiencies.

Sunak said: “During these challenging times it’s vital that every single penny of taxpayers hard-earned cash is being spent well. The current level of waste across government is simply not acceptable – which is why we’re doubling down on wasteful spending and launching an efficiency drive to make £5.5 billion worth of savings.

“That money will then be pumped directly into the world class public services that the British people deserve The crackdown will also see a review of Government Arm’s Length Bodies or ‘Quangos’ who will be expected to save at least £800 million from their budgets.”

The Treasury will also launch a new Innovation Challenge to crowdsource ideas from civil servants on how government can reduce waste and improve public services, with winners selected this Summer and best ideas becoming government policy.