As we set out in June 2021’s declaration on Government reform, HM Government are committed to strengthening the cross-Government functions to better support Departments’ delivery capability and maximise value for money for taxpayers.
In the financial year 2020-21, the Government continued their work to deliver savings to the UK taxpayer by improving operational efficiency and effectiveness. Functions, Departments and other central Government bodies have worked together to realise significant efficiencies in how services and outcomes are delivered. The figures set out here are those which meet the definition of cashable savings. Cashable savings are those which lead to a direct reduction (all other things being equal) in a Department’s budget.
During 2020-21, cashable savings totalled £3.4 billion. £1.9 billion of this was delivered through reducing losses from fraud and error, improving debt management and improving the effectiveness of grants. £1.4 billion of the savings were enabled by commercial teams driving improvements in the procurement of goods and services across Government. £142 million of the savings were delivered by digital teams supporting Departments to bring capability in-house and reducing the cost of running IT services. All of these savings have been assured for accuracy and robustness by the Government Internal Audit Agency.
Some improvements to efficiency and effectiveness, such as increases in quality or avoided expenditure, do not deliver cashable savings. As a result, we believe the figure of £3.4 billion understates the total savings and benefits delivered across central Government. Examples of these improvements include the work of functions to deliver expert advice, build professional capability, share good practice, and support continuous improvement. Further illustrations of this work can be found in the efficiency announcement which we have published on gov.uk.
We will provide regular, annual updates on how functional reform and the increasing professionalisation of government is delivering substantial savings and benefits for taxpayers and service users.
Copies of the 2020-21 efficiency announcement and accompanying technical note will be placed in the Libraries of both Houses in Parliament.