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
|
