[holding answer 16 December 2008]: The Modernisation Fund provides support to Departments to meet the transitional costs associated with releasing savings over the CSR period and embedding ongoing efficiencies over the longer-term. The level of modernisation funding over 2007-08, 2008-09, 2009-10 and 2010-11 was agreed with Departments as part of the comprehensive spending review process when budgets were set for the period 2008-09 to 2010-11.
Modernisation funding in table B18 of the PBR represents an estimate of the profile of modernisation funding required by Departments. The exact amount of drawdown of modernisation funding in each year is discussed and agreed between Departments and the Treasury.
The Modernisation Fund has only been in operation since 2007-08. Drawdown in 2007-08 was £141.4 million. All Departments are also expected to improve services and deliver improved value for money from within their spending review settlements.
The 2004 spending review set stretching efficiency targets for all Departments to release resources for reinvestment in key front line services to deliver public services that represent value for money for the taxpayer. During the 2004 spending review period Departments delivered over £26.5 billion of savings, substantially over-delivering against the £21.5 billion set in 2004.
In the 2007 comprehensive spending review the Government agreed to deliver a further £30 billion of savings by 2010-11, all gains to be cash-releasing and net of costs. Departments are in the progress of delivering these savings and will report on progress in their departmental reports. In addition to the £30 billion value for money target, Budget 2008 launched the Operational Efficiency programme and the Public Value programme to explore whether further efficiency savings could be achieved. The 2008 pre-Budget report announced an increase of the existing cross-Government value for money target for 2010-11, releasing £5 billion of additional efficiency savings in 2010-11.