Efficiency FAQs

1. What is the Efficiency Programme?

The Efficiency Programme is the biggest current public sector wide 'change programme.' It is a key part of the UK Government's 2004 Spending Review - which is implemented from 2005-2008.

The programme involves change in all UK public sector organisations and has three specific targets:

To produce efficiency gains of £21.5 billion a year by 2008 to be released back into 'front line' public services.
To reduce the headcount of civil servants (those employed by central government departments) by 84,000 by 2008 and
The create a culture of continuous improvement and embed efficiency as a key objective both for individuals and organisations.

The programme also includes the 20,000 relocations target identified in Sir Michael Lyons' review "Well placed to deliver? - Shaping the pattern of Government service".

2. How was the £21.5 billion figure reached?

The figure was calculated in 2003 by a taskforce, led by Sir Peter Gershon, who conducted an independent review of central, regional and local government and the wider public sector. You can obtain a copy of the full efficiency review report.

3. Myths and facts about the Efficiency Programme

MYTH: Claim that efficiency gains are not real.
FACT: Gains are reported in the Budget and Pre-Budget reports, i.e. twice a year. They are monitored by independent bodies, such as Parliament and the National Audit Office, as well as HM Treasury. Some efficiency gains are 'non-cashable' - that is, they are the result of delivering more or better work with the same amount of resources, rather than simply maintaining services and returning savings to a central pool.

MYTH: Not a single civil servant has been sacked.
FACT: We regard redundancy as a last resort, and strive to be as fair as possible to all our staff. However, redundancies are taking place where necessary. Please contact individual departments (Directgov website) for their local figures.

MYTH: This is just fiddling at the edges of a bloated system.
FACT: There is political consensus about the rough size of government spending, as a percentage of gross domestic product. The Efficiency Programme is only a few per cent of overall government spending, but at £21.5 billion a year, it is a massive and complex programme to change the way the public sector operates.

4. What progress has been made?

The Government is on or ahead of trajectory on all of its efficiency targets.

Departments have delivered more than £15 billion in efficiency gains;
Over 50,800 workforce reductions, over 9,700 posts reallocated to the front line giving a gross workforce reduction of over 60,500;
We now have clear commitments to 11,068 posts being relocated out of London and the South East.

5. Who is monitoring the results?

The Senior Responsible Owner of the Efficiency Programme regularly reports progress to the Prime Minister and the Chancellor of the Exchequer. The SR04 Efficiency Team in HM Treasury makes that progress happen.

The SR04 Efficiency Team challenges and supports departments and undertakes rigorous measurement of progress. Parliament and the National Audit Office also monitor how the programme is progressing.

6. Key facts

The ten biggest efficiency initiatives:

Health - Pharmaceuticals - Generic Switching £1,204 million.
Health - Service Improvement £1,056 million.
Police - Force level Efficiencies £888 million.
Defence - Defence Logistics Transformation Programme £541 million.
Immigration - Asylum Support Cost Reduction £445 million.
Health - Core PASA Procurement £442 million.
Welfare - Payment Modernisation programme £311 million.
Health - Social Care Efficiency £306 million.
Local - Local Government - Corporate Services £277 million.
Housing - New Supply Registered Social Landlords £276million

Specific examples:

More than 99 per cent of passports now issued within 10 days.
Benefits payments are now processed for 1p per transaction, not £1.50 as with Girocheque.
eAuctions are saving an average of 25 per cent each time they are used as a procurement method.
Three-quarters of police forces now use video identity parades - up from five per cent in 2002, saving around two-thirds on total costs (£29 million a year).
More than 1.5 million electronic transactions are successfully completed by the Government every day - for example, more than 50 per cent of driving tests are booked online.
The Department of Trade and Industry (DTI) is moving from eight buildings to two - it can do this through a new flexible workspace plan and reducing staff by 1,000.
The Home Office is saving £28 per transaction by making purchases using a Government Procurement Card issued with Visa, rather than traditional processing methods.

7. Further information

Media - please email the HMT press office: Press.Office@hmtreasury.gsi.gov.uk or call 0207 270 5000
Any other questions not specific to departments: Please contact either the OGC service desk: servicedesk@ogc.gsi.gov.uk or HMT press office by calling 020 7270 5000.