CBI wary of UK govt efficiency drive's value

Britsh government plans to improve the efficiency of public services will encourage only cosmetic change and will fail to stamp out poor practices, a business group said today.

The CBI said the British government’s plan to save £20bn (€29.7bn) a year through a crude non-specific efficiency drive would encourage only superficial change.

The group said it welcomed plans to improve data on public-sector productivity, but added that the government should go further with the Audit Commission and National Audit Office evaluating efficiency.

It added that, while it welcomed plans to reduce the number of duplicated activities by amalgamating back-office functions, it feared some jobs would simply be reclassified.

The group also expressed concern that any efficiency savings may never reach front-line services because of higher costs and wages, with public-sector wage inflation in the UK currently running at 7.5%.

CBI Director General Digby Jones said: “Business supports what the government is trying to do but we are not sure they will be able to do it.

“Ministers must decide if this is a cosmetic exercise or if they are really serious about reform. What we need is a genuine push to change the way services are delivered, backed by well-targeted incentives.

“Close analysis of the government’s plans has not reassured us that this is going to be as good as the government wants it to be.”

But the British government defended its review, which has now been running for almost a year, saying there had been a 31% reduction in staff at the Department of Education, a 38% reduction in the Department of Health, and a reduction of 40,500 staff at the Department for Work and Pensions, Customs and Excise and the Inland Revenue.

The Treasury added that administration costs were projected to fall to 3.7% of total spending by 2007 to 2008, the lowest level since they were first measured in 1986/1987.