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Deloitte response to Government efficiency announcement

9 August 2012

Responding to today’s Cabinet Office figures on Government efficiency, Mike Turley, head of public sector at Deloitte, the business advisory firm, said:

“The efficiency figures show that, on the surface, the Government’s plan to reduce operating cost is working. The £5.5 billion worth of departmental efficiency savings between March 2011 and March 2012 is a significant achievement, and comes on top of the £3.75 billion saved between May 2010 and March 2011.

“We are still in the foothills of efficiency savings. Austerity is widely expected to last for the next decade as the private sector investment Government had hoped for has not yet materialised. The next Spending Review period is likely to be as tough as the current one.

“For the longer term objective of running Government more like a business, things are less clear. As a ‘business’ that employs over five million people and spends around £700 billion annually, Government could make a number of improvements. In strengthening its own cash management practices, for example, Deloitte estimates potential savings of up to £10.2 billion per year. More can also be done to reduce the £20.3 billion lost each year to fraud and error and reconciling the £35.8 billion currently owed to Government that is aged or written off debt.

“In the longer term, Government must confront the areas of public spending sensitive to demographic change. For every additional one million people over working age, a further £10 billion is added to welfare spending. With the population ageing at its current rate, these long-term liabilities must be addressed.”

Ends

Notes to editors:
The figures outlined by Deloitte are contained within The State of The State, a joint report with the think-tank Reform, which analysed over 500 sets of Government data. Full copies of the report are available at - www.deloitte.co.uk/thestateofthestate

About Deloitte
Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.

The information contained in this press release is correct at the time of going to press.

Member of Deloitte Touche Tohmatsu Limited.

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