Ministers believe measures such as digitisation, shared services, and reducing use of consultants could help cut waste

Credit: Marcel Oosterwijk/CC BY-SA 2.0     Image has been edited

HM Treasury is to crowdsource ideas from civil servants as part of new plans to cut £5.5bn of waste.

The department will launch an Innovation Challenge to gather ideas from civil servants on how government can reduce waste and improve public services, with winners selected this summer and the best ideas becoming government policy. A previous Innovation Challenge in 2015 received 22,000 responses with 16 measures implemented, the Treasury said.

The challenge is one of several plans announced last week, including a new committee and a review of quangos, which aim to “drive efficiency, effectiveness and economy across government”.

Boris Johnson has asked chancellor Rishi Sunak to chair the new Efficiency and Value for Money Committee, which will aim to ensure departments are delivering the highest quality services at the best value, with savings “used to fund vital public services”.

The prime minister has tasked the committee with ensuring the 5% efficiency target set at the 2021 Spending Review is met across government, as well as scrutinising strategies to prevent fraud and error.

Related content

• Treasury found ‘lots of positives’ in virtual spending review process
• Chancellor urged to use spending round to support long-term future of coronavirus tech innovation
• How 2021 turbo-charged the use of digital tools for government’s finance professionals

Sunak said: “The current level of waste across government is simply not acceptable – which is why we’re doubling down on wasteful spending and launching an efficiency drive to make £5.5 billion worth of savings. That money will then be pumped directly into the world class public services that the British people deserve.”

As part of the crackdown on waste, quangos – which have devolved powers but are financed or overseen by government – will be expected to save a total of least £800m.

New efficiency minister Jacob Rees-Mogg recently questioned whether quangos are needed, suggesting each quango should be analysed to decide whether it is “really necessary”.

The quango review, which will begin in April, will seek savings from better use of property, reduced reliance on consultants, increased digitisation, greater use of shared services, and benchmarking to drive efficiencies.

Rees-Mogg will deputy co-chair the Efficiency and Value for Money Committee – alongside Simon Clarke, the chief secretary to the treasury – which will meet for the first time next week.

Most of the planned £5.5bn of savings will come from the NHS, with its efficiency commitment doubling to 2.2% a year; the Treasury said this will free up £4.75 billion to fund NHS priority areas over the next three years.

These savings will be made through a range of programmes including the digitisation of diagnostic and front-line services, which has been shown to reduce cost per admission by up to 13%, improving the efficiency of surgical hubs, and developing digital tools to cut time spend by NHS staff on admin tasks.

The money saved will be used to fund front line NHS priorities, the Treasury said. 

The announcements come ahead of the chancellor’s Spring Statement on Wednesday, where the chancellor will update parliament on his plan for the economy in response to the Office for Budget Responsibility’s latest economic forecasts.