HM TREASURY News
Release (72/08) issued by The Government News Network on 3 July 2008
Chief Secretary to
the Treasury Yvette Cooper has today launched the Operational
Efficiency Programme. The programme forms a key part of the
Government's drive to achieve greater efficiency savings
across public spending, with the potential to deliver billions of
pounds of savings. The Operational Efficiency Programme will be
wide-ranging, focussing initially on five strands examining
cross-cutting areas of government spending and drawing on the best
public and private sector experience. Each of the first four
strands will be led by an experienced figure from the private
sector who will provide expertise and fresh ideas, and who will
challenge the Government on its plans to ensure that they are as
ambitious as possible. The programme will deliver its
recommendations by Budget 2009. The initial five workstrands are:
* back office and IT, to be led by Martin Read;
* collaborative procurement, to be led by Martin Jay;
* asset management and sales, to be led by Gerry Grimstone;
* property, to be led by Lord Carter of Coles; and
* local incentives and empowerment.
The fifth area will take forward work aimed at increasing
efficiency by encouraging frontline professionals and the users of
public services to bring forward their own ideas on how to cut
waste. Cooper is announcing details of this work today, including
moves to cut bureaucratic burdens on the frontline and to push
initiatives which allow frontline workers to pitch their ideas to
top management.
Launching the programme, Yvette Cooper said:
"The Gershon Review saved the Government £23bn and we are on
course for £30bn more savings over the next three years. But we
need to go further. The taxpayer has a right to expect value for
money, and that means the public sector has a duty to seek ever
greater efficiencies too."
The programme will build on the success of the Gershon Review,
which achieved £23 billon of savings during the 2004 Spending
Review period, and will identify further savings and efficiencies
beyond the £30 billion already planned for the current spending
review period. It will operate in parallel to the Public Value
Programme, launched by Cooper in the Budget, which is examining
major policy issues on value for money within individual spending
areas, such as in road-building and healthcare commissioning.
Notes for Editors
1. The full Operation Efficiency Programme prospectus can be
found here: http://www.hm-treasury.gov.uk/documents/public_spending_reporting/vfm/vfm_operational_efficiency.cfm
2. Detail of the four core workstrands:
Strand One - Back office and IT
* We have made major savings in support services through the
Gershon programme, for example the Ministry of Defence has saved
£45 million a year by rolling out a single personnel management
system for all three armed services. However, we know that the
best businesses are still ahead of us, and we want to challenge
ourselves to raise our level of ambition in this area. Private
sector experience suggests significant savings of 10-50 per cent
may be possible, with an estimated £7 billon spent on finance and
human resources functions alone in the public sector. This strand
will look at how we can make progress towards achieving these
savings, including a particular emphasis on how to get better
value out of large IT projects. Strand Two - Collaborative procurement
* The public sector buys goods and services worth over £160
billion each year but only a small fraction of this is bought in a
collaborative way, using the collective purchasing power of
government. Collaborative procurement may not always be the best
way to buy, but there is scope for reducing the complexity of
current arrangements in areas such as energy and travel and
increasing the scale of collaborative procurement across the wider
public sector. This strand of the review will explore how we can
make a step-change in this area.
Strand Three - Asset management and sales
* The third strand of the review will consider asset management.
The public sector manages an enormous asset base worth well over
£800 billon. This strand will look at the effectiveness of our
existing policies, including the financial incentives around
assets, whether different types of assets require different policy
interventions and incentives, and the scope for further disposals.
Strand Four - Property
* The final strand of the review will consider how efficiently
public sector organisations are using their property, particularly
office space. Departments vary in how efficiently they use the
space available to them and we feel there is scope to make
improvements and achieve significant savings. The scope of this
workstrand will include the wider public sector, going beyond the
reach of OGC's High Performing Property initiative, which
mainly covers the central government estate.
2. Measures to increase local engagement
The fifth area on local incentives and empowerment aims to open
up more space for public sector professionals to innovate and
improve value for money in their areas. It will look at areas such as:
* extending the statutory Power to Innovate, which gives schools
more freedom to act on their own initiative, to other parts of the
public sector;
* rolling out schemes such as the "Angels and Dragons"
programme in HM Revenue and Customs, which has led to service
improvements by giving frontline staff a direct line to top
management for pitching innovative ideas, and direct support to
implement them;
* replicating approaches like the NHS' "Productive
Ward" programme, which enables nurses to spend less time on
administration and more on direct patient care, in other parts of
the public services; and
* adopting techniques which large businesses use to tap into
ideas and expertise from the shop floor.
The Government will take further steps to reduce bureaucratic
burdens on the frontline. The Government will:
* introduce new "gatekeeper" powers which will help
manage the burden of inspection on local authorities;
* require all departments to publish by December 2008 detailed
plans setting out which regular data requests they will cut as the
first stage of the Government's commitment to reduce data
burdens on the frontline by 30% by 2010;
* look at the case for giving the public sector frontline the
same level of protection against over regulation as the new
Regulators' Compliance Code is giving to the private sector; and
* take a robust view of the funding requirements for public
sector regulators for the next spending review period, with the
aim of capturing further savings.
3. Workstrand Advisors
Martin Read
* The back office / IT workstrand will be led by Martin Read.
Martin is a non-executive director of British Airways and a senior
adviser to Candover Partners. He was chief executive of
international IT services company Logica from 1993 to 2007 and has
served as a non-executive director of Boots (1999-2006) and ASDA
(1996-1999). Prior to 1993, he was supervisory managing director
of the GEC-Marconi Radar and Control Systems group of companies.
Martin's other interests include being a director of
homelessness charity Shelter, a trustee of the Council for
Industry and Higher Education and a member of the Council of
Southampton University.
* Martin said: "I am pleased to be involved in this
programme and to be leading the work on back office and IT
services. These services form a vital part of any modern
organisation. The private sector has made significant strides
forward in this area in recent years and my work will examine the
scope for the public sector to benefit from this experience, in
order to deliver further efficiencies over the coming
period." Martin Jay
* Martin Jay was appointed a non-executive director of Invensys
in January 2003 and became Chairman in July 2003. Mr Jay retired
as Chairman of VT Group plc in July 2005, where he was also Chief
Executive for 13 years. He previously held a range of leadership
positions at GEC and was a member of the GEC Management Board. Mr
Jay is the Chairman of the Tall Ships Youth Trust.
* Martin said: "I'm excited by this opportunity to help
government deliver more savings from its £160 billion procurement
bill. There's some good work already underway, but I will be
challenging the government on the scale and ambition of its
savings plans - particularly on collaborative procurement, where
we should be able to drive some better deals by harnessing the
collective buying power of the public sector."
Gerry Grimstone
* Gerry Grimstone is Chairman of Standard Life plc, after serving
as a Standard Life director since July 2003. Gerry Grimstone held
senior positions with the Department of Health and Social Security
and HM Treasury until 1986. He then spent 13 years with Schroders
in London, Hong Kong and New York prior to becoming Vice Chairman
of Schroders' worldwide investment banking activities. In
September 2007 he was appointed Financial Services India Champion
by UKTI. Gerry is also Chairman of Candover Investments plc, a
major European private equity firm, and was until recently a
member of the Air Command Board and Chairman of the RAF Joint
Audit Committee.
* Gerry said: "I'm looking forward to advising the
Government on how to drive better value for money from its £800
billion asset base. I will be taking a hard look at the incentives
around assets in the public sector, and at whether the Government
should be more ambitious on disposals - with the aim of delivering
a better deal for the taxpayer."
Lord Carter of Coles
* Patrick Carter is a Labour Peer who in addition to a career in
business has advised the Government on a wide range of issues. He
has Chaired a number of Government reviews including Commonwealth
Games 2002, The English National Stadium (Wembley), National
Athletics, Payroll Services, Criminal Records Bureau, Offender
Management, Public Diplomacy, the Procurement of Legal Aid,
Pathology and Prisons. In 1985, he founded Westminster Health Care
which he built into a leading health care provider which he sold
in 1999. He is a private investor and director of public and
private companies in the fields of insurance, healthcare and
information technology. He was Chair of Sport England from 2002 to
2006, was a member of the Home Office Board and a member of HM
Treasury's Productivity Panel.
* Lord Carter said: "I welcome the opportunity to drive
greater efficiencies from the Government's very large and
varied property portfolio. I'm aware that some good work is
already taking place in this area, but I intend to challenge
government to raise its ambition across the full range of public
sector property."
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