This item was published during the term of a previous administration that ended in April 2007
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Efficient Government initiative
24/06/2004
Details of the Efficient Government initiative,
designed to deliver public sector savings of £500
million by 2007-08 and £1 billion by 2009-10, were
given to Parliament today.
Finance and Public Services Minister
Andy Kerr said Efficient Government was at the heart of the
Executive's improvement and delivery agenda which would
ensure the very best value from every pound of public money
it invests.
A new Efficient Government Fund worth £60 million
over two years will also fund invest-to-save projects
across the public sector.
Capital investment will be increased
by at least five per cent a year in real terms over the
Spending Review period - locking in genuine improvements in
infrastructure for the longer term.
Mt Kerr also described the further
steps to be taken to ensure more efficiency, including a
new approach to managing provision set aside for future
commitments across the Executive by managing such resources
centrally alongside the Contingency Fund.
The Minister said:
"
Our record inScotlandis already a strong one. Our e-procurement system is
one of the most comprehensive and successful e-Government
initiatives in the world. We are joining-up back office
functions between our Health Boards, to save £29 million a
year.
"And local government has shown itself able to
make a number of impressive strides to secure
efficiency gains and to deepen collaboration between
councils.
"But we need to do more. That is why I am
announcing that, as part of our budget plans to be
announced in September, we will set out a three year plan
to attack waste, bureaucracy and duplication in
Scotland's public sector. We are building on the work
already done, but stepping up a gear, going much further,
with more ambitious targets, making sure that every pound
makes an impact.
"Our immediate goal is to deliver annual
efficiency savings of £500 million from the financial
year 2007/2008, rising to £1 billion by 2010.
"We will set targets for efficiency gains from each
government department, health boards and all public
agencies. Gains which will free up resources that we
will invest in frontline staff and services.
"We need to get the Executive's house in order
first as part of our Spending Review preparations. And
part of our process of financial management is the
process of End Year Flexibility.
"Executive portfolios carried forward
resources of £403 million this year, less than two per cent
of the total Scottish budget. £233 million of this total
was planned carry forward for future spend or slippage in
capital projects, £7 million is from demand-led changes.
The remaining £163 million was mainly accounted for from
slippage and delays in revenue projects.
"The Executive itself has carried forward less than
two per cent of the total Scottish budget, a level of cash
reserves that government bodies have traditionally carried
over at the year end. However, I am disappointed
that this year's EYF of £403 million is more than last
year.
"Delays in spending are delays in improving
public services. And the figure for this past year,
demonstrates to me that after five years of Devolution,
departments still have more to do to ensure sound
financial management across the Executive.
"I am therefore taking additional action to make sure
that future spending comes in closer to budget. I
have agreed with the Permanent Secretary to ensure that
appropriate indicators on financial management are included
in the personal performance targets of all those senior
civil servants with responsibility for budgets. I am also
introducing a new approach to managing resources set aside
for future commitments.
"I have decided that it is right and prudent to
bring forward into the current financial year £205
million of spending from our future plans.
"I have agreed that the Health Department should
be allowed to retain the loan of £85 million made in
the Spring Revision for a further year.
"I consider it prudent that whenever we can, we take
steps to reduce the debt burden we leave for the
future. By paying off debt now, we not only meet a
commitment that would inevitably fall due in years to come
-we also free ourselves from the burden of annual interest
payments. So this not only brings forward spending, it
frees up additional resources in every future year.
"I have therefore decided to pay off all the
remaining debts carried over from Scottish Homes at a total
cash cost of around £220 million. This will bring
annual budget savings of over £15 million a year, an annual
return of over 10 per cent on our investment in
Departmental Expenditure Limit terms. A simple, prudent
step that will release resources for frontline
services.
"We will be bringing forward into this year £20
million of capital investment in Further and Higher
Education Institutions to allow them to take forward plans
to modernise the teaching infrastructure and promote
collaboration. I will set out further investment proposals
for Further and Higher education in the forthcoming
Spending Review.
"In our schools, we aim to lead the world in online
learning. Research evidence is already showing us
that teachers and pupils are beginning to see real benefits
from using online materials in the classroom. We need to
make the most of this opportunity. I am bringing forward
£10 million to upgrade the technology that will allow our
schools better access to the latest online learning
material.
"We all know the impact that decades of under
investment in our infrastructure has made inScotland. The negative impact on transport, education
and health. The debilitating impact on economic growth and
innovation. Under investment in the years before
devolution.
"We have made a strong start in putting that damage
right. We have begun to make the capital investment
that our country needs. But there is still much more to
do.
"I am setting a target to increase our net
investment by at least five per cent a year in real
terms over the Spending Review period. A target that
will lock in for the longer term the improvement in
infrastructure we need to secure the growing economy
and the first class public servicesScotlanddeserves."
EYF allows the Executive to carry forward
resources which are not used in the financial year they
were allocated to allow sensible planning across financial
years and ensures that money is not lost forever if it is
not used in-year.
Simple Guide to EYF
Detailed Background to EYF 2003-04