The CBI has identified total savings of up to £16.3bn over the next five years as part of its submission to the Treasury ahead of the Comprehensive Spending Review (CSR).
Ministers must be “truly transformational” in seeking “fundamental reforms” if the UK is to succeed in delivering on the twin goals of deficit reduction and high quality, sustainable public services, says the CBI director general John Cridland.
“Businesses are steadfast in backing the Government’s drive to get the deficit down. Companies will therefore have been heartened by the Prime Minister’s vision for a‘smarter state’, where he identified reform as the number one principle,” he explains.
“But this time round savings from departments will be a lot harder to come by, as the low-hanging fruit from the last Parliament has already been picked.”
To achieve this, the CBI is calling for action to ensure ring-fenced departments (health, education, international development) are open to reform and to protect growth enhancing spending on infrastructure, innovation, education, skills and exports.
“Our proposals, which include extending digital and shared services to boosting productivity in the NHS, could deliver more than £16bn of savings by the end of this Parliament,” adds Cridland.
The submission recommends reforms in both central and local government, rehabilitation as well as productivity improvements in the NHS:
1. Encouraging greater cross-departmental cooperation
The government should build on the results achieved in the previous Parliament by the Troubled Families programme, which seeks to join up services combating truancy, youth crime and anti-social behaviour, by encouraging greater working across departmental boundaries, including local councils and police forces.
2. Commercialising the Government Property Unit (GPU)
Cementing gains made by the GPU since 2010 and encouraging a more commercial approach to getting the most from the Government’s estate. Helping the wider public sector to make better use of assets rather than focusing solely on disposal could save £4bn by 2020.
3. Strengthening prisoner rehabilitation support
Reoffending costs the public purse around £13bn each year – but aligning support services such as healthcare, adult social care, education and welfare to work services could save £2bn by 2020.
4. Digitising transactional services
Continuing the work started in the last Parliament by the Government Digital Service. Digitising the remaining 22 per cent of transactional services, such as paying council tax, could generate annual savings of £800m.
Other recommendations include:
- Protecting export support, particularly given the current backdrop of reduced demand from China and emerging markets in the near term.
- To continue planned infrastructure upgrades across the country, whether in the regions like the A303 and the Northern Hub or promised infrastructure investments in London, it is critical capital spending plans are delivered in full.
- Reconsider the divide between the Skills Funding Agency and the Higher Education Funding Council for England to encourage greater co-operation within further education.
“Commitments to keep within public spending limits will only be achieved through ambitious reforms. All departments, including those protected by ring-fences, need to be open to new ideas and ways of working,” Cridland concludes.
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