This item was published during the term of a previous administration that ended in April 2007
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Outline of plans for Efficient Government
29/11/2004
An agenda to deliver more efficient government across
the public sector is outlined today in a new publication -
Efficient Government - Securing Efficiency, Effectiveness
and Productivity.
It sets out in detail how efficiency savings will be
achieved - at national and local level - to ensure
taxpayers' money is used more productively.
Savings made in the administration and delivery of
services will then be invested in frontline services.
In June, Ministers set a first target to deliver
recurring annual savings of £500 million by 2007-08.
The Executive now intends to go even further and says
the plans will deliver at least £745 million a year by
2007-08.
Over the three year period to 2007-08, this represents a
total of more than £1.7 billion in cash savings.
The annual savings of at least £745 million are
projected to increase to a minimum of £1 billion by
2009-10.
Minister for Finance and Public Reform Tom McCabe
said these initial savings were only the start and further
efficiencies were planned with more work will be carried
out on realising further cash savings from portfolios,
along with work on asset management and centrally-driven
action to reduce sickness absence rates.
This will include a programme of time-releasing
efficiencies aimed at producing an improvement of at least
one per cent a year in productive time across all parts of
the public sector - equivalent to £300 million a year
increased productivity by 2007-08.
There will also be three initial areas for co-ordinated
action across the public sector.
- Savings from improved procurement with the bulk of
public sector organisations (125 bodies) using
eProcurement Scotland by 2007-08
- Public sector organisations merging shared support
- payroll, HR, IT and finance and transactional
services
- streamlining administration
Mr McCabe said:
"Since 1999 there has been an unprecedented growth in
resources for public services.
"This investment is delivering more teachers, police
officers and nurses at the frontline while developing the
infrastructure we need to grow the economy.
"Investment that tackles the damage caused by years of
under-investment and neglect.
"Our devolved Scottish government is committed to
excellent public services, designed and delivered to make
sure that the interests of those who use them come first.
Reform and modernisation are central to realising this
ambition.
"Efficient Government is a central component of that
reform agenda. It is a five-year programme to attack waste,
bureaucracy and duplication in Scotland's public sector. A
programme that aims to establish Scotland as a leader in
efficiency, innovation and productivity in public
services.
"The First Minister has set high ambitions for Scotland,
for using our resources more productively and for using our
investment wisely. Our Efficient Government programme is a
major instrument for fulfilling those ambitions.
"We have already secured greater efficiency in public
spending over the last five years - reducing the
Executive's share of expenditure on administration costs
and in eProcurement Scotland, we have one of the most
innovative projects in Europe. But we know there is more we
must do.
"As a result of work since June, we now have plans which
will deliver at least £1.732 billion of cash savings over
the three years of the Spending Review to 2007-08.
"This will be released for investment in improving our
public services - year-on-year savings to release resources
that will be moved to the people and places that
matter.
"This will deliver real benefits to the public. As a
result of these efficiency improvements, and the extra
investment from the Spending Review, frontline public
services will grow by more than five per cent a year.
"And the work we have done has persuaded me that we can
be even more ambitious. We are able to deliver more cash
savings through applying best practice in asset management,
in reducing sickness absence and through sharing support
services between public bodies. Ending duplication,
bureaucracy and waste.
"This work has indicated that we can go further and we
believe we can achieve up to £900 million in cash
efficiencies by 2007-08 and a minimum of £1,200 million by
2009-10, but we will not confirm these figures until we
have completed a thorough examination.
"We will also improve the productivity of the public
sector to secure time-releasing savings through
improvements in technology, workforce reform and removing
boundaries which get in the way of delivering excellent
services to the public.
"We have already identified five key areas for specific
reforms, which between them will save a cash equivalent of
at least £300 million a year in productive time.
"We will build on those five initial projects, again
developing programmes which will reach across the whole
public sector, with an aspiration for time-releasing
savings of up to £600 million by 2007-08 - although again
we will only commit to this figure when we are sure we can
deliver.
"We will seek assistance with this task from our most
successful private sector companies, our world-class
academic community and from our partners in public
life.
"Our objective is to ensure that the process of
continuous service improvement becomes part of the
day-to-day business of government and the rest of the
public sector. A standard exercise that becomes customary
every time and everywhere.
"This cultural change will require firm commitment to
deliver, but we are resolute in our purpose - to enhance
the level, quality and accessibility of public services,
securing real, measurable service improvements."
The Executive intends to lead the drive for efficiency
savings. Its own administration budget has been held flat
over the Spending Review period, 2005-08 - a real terms cut
of more than six per cent - and the Executive has set
itself a target of 2.5 per cent a year in efficiencies.
Planned savings across the public sector include:
- £20 million from NHS reform of back office services
and logistics
- £12 million from reforming legal aid
- £9 million through reduced costs for social
housing
Overall, potential savings to the public sector of £200
million from better procurement practice
The government will now work with the public sector to
develop detailed project plans to ensure that the
identified savings are realised. Ministers will monitor
progress regularly and call on the expertise of bodies such
as Audit Scotland.
In order to help public sector organisations work
together to generate efficiencies and savings, an Efficient
Government Fund has also been established. It will provide
£60 million over the next two years to public sector
projects which deliver efficiencies. Priority will be given
to projects in the area of procurement, support service
reform and transactional processing.
The types of projects could include:
- shared HR services, including common payrolls
- shared IT services
- shared finance services
- consortium procurement
- council tax collection and benefit payment
The Executive is also developing plans for
more long-term efficiencies, and is working with a group of
recognised experts from the public and private sector to
develop a series of pilot projects which will test out
innovative approaches to the organisation and delivery of
public services.