Select Committee on Treasury Minutes of Evidence

Examination of Witnesses (Questions 160 - 179)



  Q160  Mr Todd: Moving on to efficiencies, this morning we were talking to our panel of experts on the impact of the initial phase of the Gershon savings programme. I have to say it was met with a great deal of scepticism as to whether very much progress has been made, certainly there was criticism of the evidence which has been presented in the PBR for the savings which have been produced. There was some enthusiasm for the NAO's audit of this because it was felt that it might produce greater clarity than had been brought forward so far. How comfortable are you with the progress on the savings which are supposed to be being progressed this year?

  Ms Brivati: We believe that we have made significant progress in delivering efficiency savings against the target of £21½ billion. We believe £4.7 billion has been delivered so far which shows us well on course to meet the target. We have two sorts of processes which back-up the veracity of those statements, one is that we have a system of ETNs, efficiency technical notes, which departments publish where they are required to set out, in line with the guidance which we give out, where they will make efficiencies, how they will make efficiencies and how they will measure those efficiencies. The efficiency technical notes are developed with the helpful advice from the NAO and certainly I think there has been progress over the last year compared with the first generation which appeared last year in terms of the consistency and coverage of those efficiency technical notes.

  Q161  Mr Todd: While obviously the NAO's activities are not your responsibility, have you mentioned that they are working in partnership in some areas?

  Ms Brivati: Yes, they do.

  Q162  Mr Todd: Have you worked out how they intend to audit this process? Clearly there are a lot of opportunities for smoke and mirrors in this.

  Ms Brivati: I know that the NAO intend to report on this in the spring but they are working on their own independent report on this in the spring. The other element which gives us assurance on whether efficiency savings are really being made is that the reports which come from departments are scrutinised by the Office of Government Commerce under John Oughton who is responsible for reporting to the Chancellor and Prime Minister upon the delivery of the efficiency programme. A team within that body examines and validates the numbers which departments produce.

  Q163  Mr Todd: One possible gap is that local government is also intending to produce savings as part of this process and their activities are audited in rather a different way. Is there some way of sweeping up the effects of the Gershon Review in local government and producing a coherent picture which we can all understand?

  Ms Brivati: The efficiency savings which are delivered by local government are also mirrored in the efficiency camps, if I can put it that way, which central government departments submit to the OGC. While I would not claim it is especially straightforward to trace these through, it is possible to trace them through and understand how local authorities are contributing to the efficiency totals in that way.

  Q164  Mr Todd: The impression given is that local authorities are running slightly ahead of the gift programme in delivery of savings. Is that reasonable from the interpretation we have been given?

  Ms Brivati: I think that is reasonable. As at the PBR, local authorities have delivered about £0.75 billion of savings which is ahead of what we expected them to have done.

  Q165  Mr Todd: This does suggest that there is someone else running behind. Since you have said that you are roughly on track and local authorities are ahead then it would suggest there are some departments which are not moving with quite the requisite determination.

  Ms Brivati: That is difficult for me to say without having the trajectory in front of me. What I do know is I expect different rates of delivery from different departments because the composition of the efficiency savings which we expect from different departments are different.

  Q166  Mr Todd: The presumption behind this review is that departments retain the savings. An obvious view would be but that may not fit with the political priorities of government as to whether those savings should be delivered to continue expenditure in those particular departments. Is there any process of review of the savings and their potential destination in public spending terms?

  Ms Brivati: The efficiency savings which have been delivered now were part of the SRO4 settlement. Their being retained by departments was part of the composition of that settlement. That settlement remains closed for the 2004 period.

  Q167  Mr Todd: Presumably it will be subject to review within the next spending round?

  Ms Brivati: Efficiency will be an important part of the next spending round.

  Q168  Mr Todd: Which may include the reallocation of savings achieved and to be achieved in this exercise?

  Ms Brivati: I do not think it is helpful now for me to say what the conclusion of the next spending round will be.

  Mr Todd: I am merely suggesting that intellectually that will make sense, that the next spending round examines that issue of achievement and decides whether that spending should be retained within that department or used for other purposes which are more beneficial.

  Q169  Chairman: What are efficiency savings? I have a communication from the Office of the Deputy Prime Minister which is concerned with Fylde Borough Council. It says: "Efficiency gains have been realised through several Friends groups and a partnership with the PCT. The £4,000 equates to the cost of labour and other resources that have been contributed by the Friends groups to improve Fairhaven Lake and Park View Playing Fields." "The £4,000 is a conservative calculation based on the hours contributed [by the Friends] and represents what it would have cost the council to do the work. This is also work that the council could not afford to have carried out and may not have been done without the Friends group." What we are looking for is an efficiency day out for volunteers. Dive into your local lake and you will save the government and local authorities a hell of a lot of money. Is this what we are talking about? I am looking for a written response.

  Ms Brivati: I am very grateful. I will look at it.

  Q170  Chairman: Jon, can you look at it?[1]

  Mr Cunliffe: Yes.

  Q171  Damian Green: I have literally a request for guidance. We have got this £4.7 billion aggregate figure but I cannot find it disaggregated properly anywhere in departments or numbers of posts or jobs which have been saved. Where should we look for that?

  Ms Brivati: I do not think this is reported in the PBR documentation.

  Q172  Damian Green: Presumably it must be available somewhere. If you have got the aggregate figure presumably it must be capable of being disaggregated into performance?

  Ms Brivati: That data will be held by OGC.

  Q173  Damian Green: Is it therefore publicly available? Is it available to Parliament?

  Mr Cunliffe: We can look at that and come back to you.

  Q174  Damian Green: Can you write to the Committee?[2]

  Mr Cunliffe: Yes.

  Damian Green: That would be useful.

  Q175  Mr Mudie: I want to go into the section Delivering High Quality Public Services. It must have been a quiet Pre-Budget for you, it seems to me. These may be questions for your boss rather than you. Your box at the start says there was a fair bit of money put in but £53 million to Youth Opportunity Funds which amounts to £500,000 over two years to each local authority which will hardly break the bank. £305 million and £508 million, which I want to come to, to local authorities but that is replacement so the rates do not go up, and then £665 million to anti-terrorism and Iraq. Apart from those three things, what else did we put in the Pre-Budget for delivering high quality public services? Do you think we have got the priorities right: £650 million for Iraq and £53 million for youth opportunities?

  Ms Brivati: You mentioned a number of things—

  Q176  Mr Mudie: I did, page 125.

  Ms Brivati: —that are described in chapter 6. The main addition to public spending is to the special reserve for military operations in Iraq and also an additional £85 million for counter-terrorism.

  Q177  Mr Mudie: It is not the sort of public services the public cheer for or beg for, is it?

  Ms Brivati: Is this what the PBR is for? It is our convention to return to special reserve at Budget time and at PBR time to examine applications.

  Q178  Mr Mudie: If we take those out it is hardly having youngsters and people cheering in the streets, the amount of money we are putting in is £53 million in this Pre-Budget Report.

  Ms Brivati: Yes. I should probably also mention what we are doing on housing and the Government's response to Barker and its intention to increase its new ambition on social housing, which is another significant—

  Q179  Mr Mudie: Sorry. I am having difficulty hearing you.

  Ms Brivati: The PBR also sets out a new ambition on social housing as part of the Government's response to Barker.

1   Ev 85 Back

2   Ev 85 Back

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