Lies, Damned Lies, and Government ‘Efficiency’ Savings (Again)

It is nice to see that the new lot are just the same as the old lot, at least when it comes to reporting so-called “efficiency” or “waste” savings. Today Cabinet Office Minister Francis Maude was telling anyone who would listen that the Government anticipates £5 billion in cash savings this year.

Despite the spin, these are of course not efficiency savings and the official documents are careful to just refer to them as “cash savings” and “waste” – which anyone would be justified in thinking meant ‘efficiency’ savings. And indeed it all comes under the programme called “Efficiency” on the Cabinet Office website.

Let’s be clear – efficiency is the ratio between “inputs” (the costs of doing things) and “outputs” (the quantity and quality of goods or services produced).

What the Cabinet Office announces is simply a list of cost savings. Even these are confusing because some are reductions in the costs of inputs (e.g. reducing rents on the same property) which may well be efficiency savings, whilst others are simply amounts of money not spent.

For these to be efficiency savings – either type of cost saving – it would be necessary to show there had been no consequential reduction in the quantity or quality of goods or services produced. There is simply no such evidence. We have no idea if these are simply “cuts” (that is deciding not to do some things any more) or efficiency savings.

To take a concrete example – the announcement included:

– An equivalent of £800 million saved on salary costs by reducing the size of the Civil Service by putting stronger controls on non-essential recruitment.

– Since June 2010, the size of the Civil Service has reduced by 43,000 – a 9% reduction in headcount – and is now at its lowest level since the Second World War.

Now this is only an ‘efficiency’ saving if it has no effect on anything all these civil servants were producing. If services are effected, then at best these are only partially efficiency savings. They may be simply cuts in services. They may even be increasing inefficiency, if the effects are to reduce productivity.

So another load of tosh about efficiency savings, just like the old tosh from the previous government.

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