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.”
Saffron Cordery, deputy chief executive of NHS Providers, said: "Trust leaders know they have a clear duty to maximise taxpayer value for the extra investment being made in the NHS at a time of great pressure on public spending. They are working hard to find efficiencies, reduce costs, and identify savings.
"Even before this announcement, many were concerned about the scale of savings they would be expected to make in the coming financial year, especially given the need to tackle care backlogs, meet rising demand for services and deal with the ongoing impact of Covid-19 at a time of widespread workforce shortages.
"The impact of inflationary pressures including energy and fuel costs could make their savings requirement more stretching. Trusts will do all they can to realise the savings required but we need to be aware of how challenging the task is likely to be."
