Staff cuts, better procurement processes and reductions in the use of external consultants all contributed to a 2.5% cut in total government expenditure across Whitehall departments to £18.6bn in 2014 to 2015 against a 2009 to 2010 baseline
Almost a third of the savings were attributable to staff cuts and pension reforms, while there have been reductions in spend on consultants by £1.1bn and agency staff was cut by £470m in FY 2014/15. There was also a small boost from a crackdown on fraud, error and uncollected debt saving £742m across government departments.
Total managed public spending in 2015-16 is expected to be £742bn, compared to £732bn in FY2014-15, highlighting that current savings were only 2.54% of total outgoings.
Job cuts across the civil service and a redundancy programme have seen 86,000 jobs cut across departments since 2010, but the Government Internal Audit Agency warned that the savings could be diluted as they do not ‘take account of the costs of early exits’.
Renegotiating procurement arrangements and centralising procurement results in a £1.7bn saving, while a critical review of commercial relationships resulted in savings of £2.1bn.
The savings are up 30% on the previous financial year figure of £14.3bn, and 25% on a like for like basis. This figure has jumped from FY 2010/11 when the government reported savings of £3.75bn.
A third of the savings were achieved through staff cuts and reforms of civil service pensions which amounted to savings of £5.8bn, as well as a moratorium on non-essential recruitment.
A priority area was also a review of major government projects, and of existing IT projects to identify where expenditure could be reduced.
The figures were issued by the Cabinet Office, which said ‘it is working to help departments reduce reliance on everything from expensive consultants to print cartridges’.
The annual procurement bill has been cut by £6.1bn through a mixture of managing contracts more effectively, limiting spending on agency staff, and controlling advertising, communication and marketing spending.
The DVLA, for example, changed the renewal process for car tax disks, removing the paper requirement last autumn and renegotiated its IT contract to cut costs, saving £30m.
The Government Savings in 2014-15 report is available here