Has Whitehall overestimated its own cost-cutting?

"According to the NAO [National Audit Office], the Department overstated its claimed IT savings probably by tens of millions of pounds. The Minister has form on this: he predicted £20 billion of savings from his quango review, but the NAO showed he barely saved a tenth of that."

Jon Trickett MP (Labour), House of Commons, 6 February 2013

Since taking office, the Coalition government has stressed its commitment to slashing costs in Whitehall and improving the efficiency of the civil service. This involved cutting back on "advertising and marketing spend, ICT, recruitment, property and consultancy", as well as reducing the number of 'quangos' (public bodies that operate at 'arms-length' from government).

On Wednesday in Parliament Jon Trickett MP accused Cabinet Office Minister Francis Maude of exaggerating the savings that the Government had acheived. In reply, Mr Maude said that Mr Trickett was "talking total nonsense".

Let's look at the points of contention.

What savings have been made in IT?

Mr Trickett claims that the Cabinet Office overstated the amount that government departments saved on IT projects "by tens of millions of pounds", noting that the National Audit Office (NAO) "did not verify" its statistics. The NAO is independent of government and analyses public spending on behalf of Parliament.

According to a recent NAO report, the Cabinet Office logged £348 million of savings for 2011/12, which resulted from its initiative to manage ICT suppliers as a single customer. However, the NAO says that it was unable to validate this Cabinet Office figure because of "weaknesses in data".

Instead, it has calculated that the savings for this financial year total £316 million - some £30 million less than the Cabinet Office's estimate. 

Mr Trickett is therefore correct in his observation that, using the analysis of the NAO, the Cabinet Office appears to have "overstated" its savings in this area.

The "bonfire of the quangos" or a "clammy Sunday afternoon barbeque?

As part of its Public Bodies Reform Programme, the Government committed to reducing the number of taxpayer-funded quangos (Quasi-Autonomous Non Governmental Organisations) from 904 to between 632 and 642 by the end of the current Spending Review. Last year Full Fact looked into how much money the 'bonfire of the quangos' might save the taxpayer. 

So what about the money?

The Cabinet Office expected to save £30 billion over the course of the Spending Review period - amounting to approximately £11 billion per year. This is a cumulative total, taking into account the savings in "programme and capital spending" generated by streamlining government departments. An NAO report from January 2012, confirms the total target saving is £33 billion. 

Mr Maude announced the savings to date a few days ago:

"Through our efficiency programme, we have already delivered £12 billion of savings and there is much more that can be done. " 

The £12 billion is the total amount that the Government has saved since 2010 - comprising £3.75 billion for the financial year 2010/11, £5.5 billion in 2011/12 and another £3.1 billion in the 6 months to October 2012. By April this year, the Cabinet Office expect this to have risen to around £17 billion to date.

The Cabinet Office is clear that these figures are not national or official statistics, as they haven't been assured by internal auditors or the NAO. Instead, they should be understood as the "best interim assessment of the Government's progress", based - in the main - on departmental reports. 

So what's the controversy?

Mr Trickett maintains that the Government predicted £20 billion of savings (a figure that was trailed in the likes of the Daily Mail) and alleges that only some £2 billion has been saved. 

It's likely that he's referring here to the £2.6 billion of savings in administration costs, not taking into account the estimated savings that the Cabinet Office has achieved in departmental expenditure.

However, in its January 2012 report the NAO expressed reservations about the £2.6 billion figure, arguing that what is counted as a saving might only be diverted expenditure (for instance, a public body's function might be transferred to another department). See our previous factcheck on the subject.

As for the £20 billion, this looks like a future aim rather than a present target. Mr Maude recently said that the Government is aiming to reduce Whitehall spending by £20 billion per year. But, if we go by the Government's predicted estimate of some £11 billion per year until 2014/15, we'd expect the annual savings to be less than this at the moment.

"Cleaning up the mess": the morning after the night before?

In his exchange with Mr Trickett, Mr Maude protested,

"The outgoing Government left the public finances and Whitehall efficiency in a shockingly sorry state."

In fact there was already talk of reform before the Coalition entered office. In December 2009, the Labour government published a White Paper on "rationalising and reforming" arms' length bodies. 

However, there's broad agreement that the Coalition's 'efficiency drive' has been conducted with a certain degree of urgency. It#s not yet clear whether the Cabinet Office will meet its £30 billion target by 2015. Until the NAO or another body has signed off all the numbers on its books, we can't be sure what proportion of the savings will turn out to be just that, savings.