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Institute responds to Cabinet Office savings announcement

In response to the Cabinet Office savings announced recently Julian McCrae, Deputy Director of the Institute for Government, said:

‘Francis Maude today announced that the Government had made £10bn of “cash releasing” savings in 2012-13, some £2bn ahead of the Cabinet Office’s target figure. This follows the March Budget, which showed that the government has kept to its overall 2010 Spending Review targets. Indeed the majority of departments underspent last year. There is little doubt that this government has managed to keep a tight control on public spending over the past few years.

‘It is good that today’s figures provide greater detail on where savings have been found. However, these savings numbers can be notoriously difficult to establish and interpret. For example, previous methodologies have counted revisions to how much something is expected to cost (which can be easily inflated by producing an unrealistically high initial estimate), rather than reductions from the amount it actually cost in previous years.

‘The government has therefore sensibly had its figures independently audited to prevent manipulation. In line with its commitment to transparency, the Institute would like to see the Cabinet Office publish this audit report. Cabinet Office has surprisingly rejected previous requests for such reports, which greatly limits the credibility of figures like those published today.

‘Looking forward, the challenge now is for government to make sure further cuts don’t push already fragile Whitehall departments over the edge and in the long run increase costs. This will require new, cross-departmental approaches to controlling spending, as civil servants themselves recognised in our recent Transforming Whitehall Departments report.’

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