Contract renegotiation saves Whitehall £800m in 10 months, claims Maude

August 1, 2011

The government has saved £800m by renegotiating deals with some of the largest suppliers to Whitehall, it has been claimed.

Cabinet Office Minister Francis Maude said this equated to 6% of a full year of spend with those suppliers.

These savings accounted for over one fifth of total savings of £3.75bn in the ten months to March 2011, a figure the government said had been independently audited. Maude said these sums had also been achieved by a range of measures, including:

Reducing non-essential discretionary spend: £870m has been saved by cutting departmental spend on consulting; and nearly £500m by reducing spend on temporary agency staff
Smarter procurement: £400m has been saved by taking stronger control of the government’s marketing spend – spend through the Central Office of Information on relevant categories has been reduced by 80%; £360m has been saved by centralising spend on common goods and services
Major Projects and ICT: £150m has been saved from 2010/11 budgets for the government’s major projects, by halting or curtailing spending; £300m has been saved by applying greater scrutiny to government ICT expenditure, with departments stopping or reducing spend on low value ICT projects
Property and estates: the ongoing cost of the government’s property estate has been reduced by £90m by exerting better control over lease renewals
A smaller civil service: an equivalent of £300m has been saved on 2010/2011 salary costs by reducing the size of the civil service, “for example by putting stronger controls on non-essential recruitment”. The size of the Civil Service has been reduced by more than 17,000.

Maude said the savings achieved by the Efficiency and Reform Group were “just scratching the surface” of what the government has planned for the coming months and years.

He added: “We will continue to seek out, and eradicate waste in government, whilst also delivering longer term programmes of reform to ensure sustainable change and room for growth across the public sector.”

The Minister said the Efficiency and Reform Group would be implementing measures, amongst others, to bring down levels of fraud, error and debt, and increase greater levels of online, digital delivery.