£4.7bn Whitehall efficiency savings questioned

The government's claims that it has achieved £4.7bn of efficiency savings have little evidence to back them up and should be taken "with a large pinch of salt", according to MPs.

The government's efficiency and cost-cutting programme that came out of the Gershon Review set a target of achieving £21.5bn of savings per year across the public sector by the end of the financial year 2007/08.

The government claimed that £6.4bn of efficiency gains had been achieved by 31 December 2005 but parliamentary spending watchdog the Public Accounts Committee (PAC) has cast doubt on these figures.

The PAC said delays in obtaining data on service quality, limitations in measurement methodologies and deficiencies in departments' management information systems means these efficiency claims must be treated with caution.

One problem identified by MPs is that more than 100 of the 300 major projects targeted for efficiency savings have no baseline to accurately show the level of performance at the start of the project. The PAC said robust baselines need to be established before a department is able to record any savings against it.

Edward Leigh MP, chairman of PAC, said in the report: "The government's confident claims about departments' efficiency gains have at present precious little evidence to back them up. Overall, where there are no agreed baselines against which to compare progress and no robust systems of measurement and validation, the government's claims about efficiency gains must be taken with a large pinch of salt."

He added it is also difficult to tell where genuine efficiency savings are being achieved without an adverse impact on the quality of service.

He said: "Demonstrating this is essential if the efficiency programme is to be successful."