The government claims that it has hit its targets with £14.3 billion of efficiency and reform savings announced this week, £200 million (or 1.4 percent) of which was due to its digital activity.
Chancellor George Osborne and Cabinet Office minister Francis Maude announced that the government achieved the savings in 2013 to 2014 through the work done by the Efficiency and Reform Group (ERG), which was set up by the Cabinet Office after the 2010 general election.
The headline figure initially appears to fall short of the government's £15 billion savings goal, but a Cabinet Office spokesperson has clarified to ComputerworldUK that the £14.3 billion does not tell the whole story.
“Our target was to reach £15 billion in 2013-14, against the 2009-10 baseline, from efficiency and reform savings and by reducing losses to fraud, error and debt. With £14.3 billion saved from efficiency and reform alone we have certainly met our goal,” the spokesperson said.
Savings from reducing fraud, error and debt are expected to be announced in due course.
The £14.3 billion savings have been attributed to a number of actions taken by government. For instance, improving government’s digital services and moving more services online contributed over £200 million of savings.
Government Digital Services (GDS) implemented a review process for all upcoming departmental investments for ICT with requested spend of more than £4 million and digital (any external-facing service delivered through the internet) with requested spend over £100,000. This resulted in £91 million in savings.
Meanwhile, the migration of Directgov and BusinessLink websites onto Gov.UK also produced £62 million in savings.
On a departmental level, GDS stopped the Department for Energy and Climate Change (DECC) from spending its budget on a new website to publicise the Green Deal Policy, putting the site on Gov.UK instead. This saved £5 million.
By helping DVLA build an Insurance Industry Access to Driver Data (IIAAD) database at a cost lower than that of the incumbent provider, GDS helped the department save £5 million.
In addition, GDS helped the Electoral Registration Transformation Programme (ERTP) save £4 million by using agile software and development techniques, and in-house capability.
Further, the Department for Work and Pensions (DWP) saved over £40 million last year by working with GDS to revise the budget and duration of its original procurement notice for the identity assurance services.
The government said that £5.4 billion of the overall savings was thanks to changes in procurement and contracts. Part of this involves working more with SMEs.
In his introduction to the ERG savings report, Maude said: “As we’ve saved money from procurement, we have also worked to level the playing field for smaller firms.
“There will always be a place for big innovative companies who get the new ways of working, but we also want to be sure that we don’t exclude the constellation of SMEs from winning government business. Since the last general election we have significantly increased our spend with SMEs and are on track to meet our target of 25 percent of spend going to SMEs by next year.”
Another procurement saving was made when the government negotiated on an extension to a major IT contract, cutting its costs by £30 million.
It also expects to save over 35 percent on costs after creating the Shared Service Connected Limited joint venture with IT outsourcer Steria in November 2013.
Savings in other areas
Other savings contributing to the headline figure came from making better use of government property (£0.6 billion), tackling waste and inefficiency through large scale projects (£3.3 billion), and reducing the size of the civil service, which is now 16 percent smaller than four years ago, helping to save £4.7 billion.
The £14.3 billion savings achieved this year reflects a continuing upward trend. The amount saved has grown from £10 billion savings in 2012-13, £5.5 billion in 2011-12 and £3.75 billion in 2010-11.
The government hopes to save £20 billion against the 2009/10 baseline by next year, which would include fraud, error and debt quantifications.
Questions had been raised around the government’s ability to reach its efficiency savings target, in November, but the Cabinet Office had been confident that it would be able to hit it.
At the time, a Cabinet Office spokesperson said: “The Efficiency and Reform Group is on track to exceed £15 billion by year-end, in line with targets set out in 2010.”