Efficiency Background and Targets
The Gershon Review
The Efficiency Review, led by Sir Peter Gershon, resulted in
"Releasing resources to the front line - Independent Review of Public Sector Efficiency" (July 2004). The report was based on thorough evidence gathering, rigorous analysis, wide consultation and a wealth of experience in the private and public sectors. Gains will be retained by departments for reinvestment in front line delivery. Approximately half of these gains will result in cash gains and half represent a direct increase in service output (e.g. by freeing up the time of public service providers).
In the 2004 Spending Review the Government set out its commitment to deliver gains in excess of £20 billion a year by 2007-08, in line with the recommendations of the Gershon Report. This includes the gross reduction of more than 84,000 civil service posts and the additional relocation of 20,000 public sector posts away from London and the South East. Administration budgets are to be capped at the 2005-06 nominal level for the remainder of the SR04 period and by 2008 will reach a record low as a percentage of total spending.
Detailed departmental planning on how to implement the Gershon findings revealed that total efficiency gains of £21.5bn were achievable over the SR04 period. Departments also set out how they were going to measure their progress in their Efficiency Technical Notes (ETNs)
Where the Efficiencies come from
Public sector Efficiency savings
Civil Service Reductions and Relocations
Support for Affected Civil Servants
Assets Disposal
Where the Efficiencies come from
i) Top level targets for SR04 Efficiency Programme by department
Public sector Efficiency savings
| Agreed efficiency target 2007-08 (£ million) | |
| Department | |
| Education and Skills | 4,350 |
| Health | 6,470 |
| Transport | 785 |
| Communities and Local Government 1 (previously ODPM) | 620 |
| Home Office | 1,970 |
| Constitutional Affairs | 290 |
| Law Officer's Departments | 40 |
| Defence | 2,830 |
| Foreign and Commonwealth Office | 120 |
| International Development | 310 |
| Trade and Industry | 380 |
| Environment Food and Rural Affairs | 610 |
| Culture, Media and Sport | 260 |
| Work and Pensions | 960 |
| Northern Ireland Office | 90 |
| Chancellor's Departments | 550 |
| Cabinet Office | 25 |
| Smaller Departments | 20 |
| Local Government | 6,450 |
| Total forecast efficiency savings1 | 21,480 |
1 Total forecast efficiencies are the sum of agreed targets less forecast overlap of £5,650 million efficiencies across
central and local government.
Civil Service Reductions and Relocations
Spending Review 2004 set out the total efficiencies planned through workforce reductions and relocations:
Civil Service workforce reductions and relocation plans by department
| Estimated reductions in Civil Service 1, 2 workforce from efficiency 3 (April 2004 to April 2008) | |||
| Gross reductions in post | Net reductions in posts after re-allocations4 | Expected relocations by 2010 | |
| Department | |||
| Education and Skills | -1,960 | -1,960 | 800 |
| Health | -720 | -720 | 1,110 |
| Transport | -700 | -650 | 60 |
| Communities and Local Government (previously ODPM) | -400 | -400 | 240 |
| Home Office | -2,700 | -2,700 | 2,200 |
| Constitutional Affairs | -1,100 | -1,100 | 200 |
| Law Officers' Departments | -50 | -50 | - |
| Defence1 | -15,000 | -15,000 | 3,900 |
| Foreign and Commonwealth Office | -310 | -310 | 450 |
| International Development | -170 | -170 | 85 |
| Trade and Industry | -1,280 | -1,280 | 685 |
| Environment, Food and Rural Affairs | -2,400 | -2,400 | 390 |
| Culture, Media and Sport | -30 | -30 | 600 |
| Work and Pensions | -40,000 | -30,000 | 4000 |
| Northern Ireland Office | -130 | -130 | 8 |
| Chancellor's Departments | -16,850 | -13,350 | 5,050 |
| Cabinet Office | -150 | -150 | 250 |
| UK trade and Investment | -200 | -200 | - |
| Total | -84,150 | -70,600 | - |
1 Civil Service, and military posts in administrative and support functions.
2 Financial Year Averages for permanent staff, measured on a Full Time Equivalent (FTE) basis. Figures cited changes within core departments, their agencies, and other non-departmental bodies.
3 Excludes reclassifications and other changes to the civil service workforce.
4 The gross reduction is the total reduction in posts as a result of efficiency gains. The net reduction is the gross reduction excluding re-allocations to front-line roles in the Civil Service. Reductions are rounded to the nearest ten.
Source: page 31, Releasing Resources to the Front line
84,000 Workforce Reductions (c.70,000 net taking account of posts redirected to front line)
As part of their efficiency programmes, departments will be implementing total planned gross reductions in Civil Service and military posts in administrative and support roles of over 84,000 by April 2008, of which 13,500 posts will be reallocated to front-line activities.
20,000 Relocations
Sir Michael Lyons" independent review of public sector relocation 'Well placed to deliver? - Shaping the pattern of Government service´ (March 2004) identified 20,000 posts as candidates for dispersal from London and the South East. SR2004 accepted the Lyons Review recommendations, including that there will be a presumption against London and South East locations for all new or relocated government functions other than face-to-face services. Please see the Government Relocation pages on the OGC website for more details.
Support for Affected Civil Servants
The Efficiency & Relocation Support Programme (ERSP) has been established by the Cabinet Office to provide information, advice and assistance with career training to civil servants affected by head count reductions or relocations.
Unions have been heavily involved in the ERSP, and are consulted frequently on any action taken and Government is confident that we can work in partnership to ensure compulsory redundancies are a last resort.
Assets Disposal
The Government is taking further steps to identify and implement more efficient business planning and management in the public sector.
Securing the efficient delivery of public services depends on effective management of public sector assets. In the light of the estate implications of the efficiency and relocation reviews, the Chancellor asked Sir Michael Lyons to undertake a study of the management of public sector assets, including disposals, and to make proposals to improve asset management planning in the public sector which would help generate efficiency gains as well as contribute to the Government"s objective of £30 billion worth of asset disposals by 2010.
For further details of the Lyons public sector assets management study please follow this link to another part of the HMT website and the Better Asset Management pages on the OGC website.