Brown to outline plans to save £3bn

Dec 7 2009

Gordon Brown is expected to detail new public sector "efficiency savings" worth £3 billion as he seeks to show how he would reduce borrowing dramatically over the next Parliament.

Unions expect cuts in senior civil service jobs of up to 20% as part of the Government's plan to slash public spending while - the Prime Minister will say - protecting frontline services.

He will place a new emphasis on "value for money" and admit that certain projects will have to be shelved in order to halve the UK's massive budget deficit within four years.

Chancellor Alistair Darling indicated on Sunday that the multibillion-pound NHS IT programme was among schemes that are in the firing line. He is expected to confirm in Wednesday's Pre-Budget Report that the deficit is to top £175 billion this year, the combined effect of a costly fiscal stimulus and plummeting tax receipts.

The Cabinet Office is due to publish details of efficiency plans worth £12 billion over the next four years, including £3 billion identified since the Budget in April. Mr Brown will acknowledge that they are "just one element" of the Government's strategy to reduce the deficit. Further details will come in the PBR, which will draw the battlelines for the run-in to next year's general election.

Among plans being revealed on Monday will be £1.3 billion of savings from "streamlining" Whitehall, which is expected to mean job losses and relocations to the regions.

But union leaders attacked what they described as "irresponsible" cuts in civil service jobs. The FDA, which represents senior civil servants, branded the move "crude electioneering".

General secretary Jonathan Baume said the senior civil service had grown over the past decade because ministers had "significantly extended" the role of central government.

He added: "It is likely that, in the first period of a new Parliament, ministers will need all of the currently available resources to take forward manifesto commitments and likely reforms to public services in the coming decade, even if the senior civil service eventually contracts in size as these reforms bed down."

Monday's announcements are designed to demonstrate to the public that the Government is reducing waste before a PBR on Wednesday that will feature tax rises and further spending cuts. The Chancellor warned that the better-off would have to pay more towards the cost of the economic recovery.