Select Committee on Children, Schools and Families Second Report

4  Efficiency and productivity

42. When he was Chancellor, the Prime Minister set efficiency targets for the public sector following the publication of the Gershon Report in 2004. The DfES was expected to achieve a total of £4.3 billion of savings by 31 March 2008. According to Chapter 2 of the previous Department's Annual Report for 2007, the former DfES was "on course" to deliver the £4.3 billion total and also to cut 1,960 civil service posts (over the period October 2003 to 2008).

43. The calculation of these savings has been problematic from the beginning, with the NAO reporting that it is difficult to be clear about what is happening, and our predecessors on the Education and Skills Committee expressing concern at the difficulties in assessing the reality of the efficiency savings achieved.[27] The Permanent Secretary told us that confirmation about whether the targets had been achieved would not be available until autumn 2008 but that the Department had a green rating (that is to say, it is on course to achieve the targets).[28]

44. The DCSF's consultation paper on schools' funding for 2008-09 to 2010-11 states: "our assessment of cost pressures includes an assumed efficiency gain of 1% for each of the next three years, reflecting the substantial improvement in efficiency which we expect to be achieved across the schools sector and the public sector as a whole". This is an interesting development, as the Government has not, in the past, confronted schools with direct demands for efficiency savings. On the other hand, local authorities are required to deliver three per cent efficiency savings per annum over the same period.

45. We are keen to see the detailed assessment of the achievement or otherwise of the Gershon targets in order to establish how much more effectively the education and children's services systems are operating. We will also wish to see how the new efficiency targets in schools are monitored and the extent to which they are achieved.

46. There is also the question of what will happen once the Gershon process itself has been completed. In the Budget, the Chancellor announced plans for further efficiency savings, with the establishment of the Public Value Programme. According to the Budget Red Book:

"Major improvements in value for money depend not only on a firm discipline on back-office costs, but also on a continual effort to find smarter ways of doing business and in taking wider policy decisions. The [Public Value] Programme will therefore look at all major areas of public spending to identify where there is scope to improve value for money and value for money incentives. Initial areas already identified for investigation include road-building, commissioning in the health sector, regeneration spending, value for money incentives in public sector budgeting frameworks, and the way in which major public sector IT projects are run and accounted for."[29]

47. As with the Gershon efficiency programme, implementing these kinds of proposals across 23,000 schools, for example, will be a major undertaking. More information is promised in the 2009 Budget, but we presume that Departments will begin planning well before then. We ask the DCSF to set out what it anticipates the new Public Value Programme will require of the Department, and of schools and other children's services providers.

27   Education and Skills Committee, Second Report of Session 2005-06, Public Expenditure on Education and Skills, HC 479, paragraph 34. Back

28   Qq 13-14 Back

29   Budget 2008, HC (2007-08) 388, 12 March 2008, Box 5.1 (p 79). Back

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