HM Treasury
Printable version E-mail this to a friend

Government saves £10 billion for taxpayers

£8 billion savings target for 2012 to 2013 exceeded by 25% through fundamental reform to government operations.

Civil servants across Whitehall have radically changed the way they work to save £10 billion for taxpayers, Minister for the Cabinet Office Francis Maude announced today. The savings show the degree by which spending has been reduced compared with 2009 to 2010, the year before the last General Election.

New figures published today for 2012 to 2013 show that the government has exceeded by 25% the £8 billion savings target it set itself after the General Election. The savings of £10 billion are equivalent to almost £600 for each working household across Britain, enough to fund 3 million primary school places or the building of 500 new secondary schools.

View an infographic showing government savings for 2012/13, or download graphic as a PDF.

Working with government departments, the Efficiency and Reform Group - a joint Cabinet Office and Treasury initiative - has led an ambitious programme to drive savings throughout the Civil Service to make every taxpayer pound count. In 4 areas alone, the government has saved:

  • £3.8 billion by linking together departments to buy goods and services and enforcing sensible controls on recruitment and use of consultants
  • £1.1 billion by improving online services, and raising money through selling empty buildings and exiting expensive rentals in sought-after locations
  • £1.7 billion by reviewing and reshaping large scale projects (including construction) and stripping out inefficiencies
  • £3.4 billion by reducing the size of the Civil Service and reforming Civil Service pensions

Minister for the Cabinet Office Francis Maude said:

This government is taking radical decisions to make Whitehall leaner and more efficient so Britain can compete in the global race. Civil servants across government are changing the ways they work and we are on the way to managing our finances like the best-run FTSE100 businesses. I’m pleased to announce that this work has saved £10 billion, the equivalent of almost £600 for each hard-working family. These are popular savings which support Britain’s deficit reduction and encourage growth.

In the first year of this government we saved £3.75 billion compared with the year before the last General Election. In 2011 to 2012 we managed £5.5 billion. The unprecedented £10 billion savings last year shows we have defied expectations and accelerated the pace of reform. There can be no going back to the old, wasteful ways of doing things which we saw in the past.

We know there’s a long way still to go to achieve our ambitious plans for savings over the next few years. Hard-working taxpayers rightly expect their money to be spent judiciously. The Efficiency and Reform Group are the taxpayers’ champions in Whitehall. I am determined to push ahead with this savings programme and I would like to thank all the civil servants who have worked to make it happen so far.

The Chief Secretary to the Treasury Danny Alexander, said

Efficiencies and more intelligent spending across government has saved the taxpayer £10 billion over the last financial year. This is a good result and a testament to the hard work being done by departments into making government as lean as possible.

There is a great deal more to do before government is as efficient as it needs to be – that’s why in the Spending Round we will find another £5 billion of savings as a major contribution to reducing the deficit in 2015 to 2016. Cutting waste means taxpayers’ money can be focused on building a stronger economy in a fairer society.

Chief Operating Officer Stephen Kelly said:

Working as a single customer across government puts us in a very powerful position to identify efficiencies and maximise our collective buying power.

More excitingly, it allows us to be creative in how we do things. This announcement shines the spotlight on some of the great work happening in departments, and it shows how the UK Civil Service is at the heart of a competent government. The Civil Service has the opportunity to play a crucial role in rebalancing our economy, creating space for the private sector and helping UK PLC to move ahead in the global race.

The Efficiency and Reform Group continues to work with departments towards delivering cashable savings of £20 billion* by 2015, following successes such as:

  • cracking down on the use of consultants and contractors, saving £1.6 billion
  • driving competition in government bids, saving £24 million by renegotiating one single contract
  • exiting 500,000 square metres of property – saving £0.6 billion and reducing the government estate by 5%, the equivalent of 73 football pitches

*This figure includes a fraud, error and debt contribution.

Notes to editors

  • In 2011 to 2012, UK central government spent around £45 billion on goods and services which is equivalent to approximately 3% of GDP. Last year, the Cabinet Office helped departments across Whitehall save £5.5 billion. These savings were driven by the Cabinet Office’s Efficiency and Reform Group (ERG) which applied controls to cut expenditure by departments on commercial contracts, IT, property, marketing, temporary staff and consultancy.
  • The Cabinet Office ensures departments work together to tackle waste and improve accountability across a range of areas, including information technology (IT), procurement, projects, HR and property.
  • The Efficiency and Reform Group reports to Francis Maude, and is overseen by an Efficiency Board chaired jointly by the Chief Secretary to the Treasury, Danny Alexander, and the Minister for the Cabinet Office and Paymaster General, Francis Maude.

Media enquiries

Facing the Future...find out more