Efficiency in government – Report Summary

Summary

The huge increase in government expenditure during the pandemic has inevitably renewed government’s focus on achieving greater efficiency as part of its financial recovery. Taxpayers will expect departments to be maximising efficiency given they are facing National Insurance increases to pay for health and social care. This autumn’s Spending Review was an important milestone for government to set out its efficiency plans for the short and medium term, and it is therefore essential that government demonstrates that it has drawn on past instances where planned efficiencies have failed to consider the implications for service users. As a result, they have either under-delivered or led to detrimental effects on services and expenditure, a phenomenon we describe in this report as cost shunting. The Treasury and Cabinet Office must also help change the culture of departments, embedding efficiency as a continuous priority rather than an irregular aspect of the Spending Review process.

Departments will need to have robust plans for realising the efficiencies identified during the Spending Review. This includes carefully considering the skills and capabilities required, and ensuring sufficient capacity is in place to respond to unexpected situations. Information needs to be used more effectively to allow services to be designed around users and to prevent the over-promising of benefits. There also needs to be a system for tracking the progress of any change programmes as they are rolled out, which would allow intervention if things are going off track. The Treasury and the Cabinet Office have a key role in putting a consistent measurement process in place that ensures departments act in a transparent way and are held accountable for their progress against their efficiency targets.