1 The Government's spending plans require most government departments to reduce their spending in real terms over the years to 2014-15. For 2010-11, departments needed to reduce spending by £5 billion compared with the plans announced in the March 2010 budget. Over the period from 2011-12 to 2014-15, the budgets of departments other than Health and International Development are falling by 19 per cent in real terms.
2 The scale of cost reduction means that departments need to look beyond short‑term cost‑cutting measures and make major organisational changes. To minimise impacts on services, departments and the bodies they fund will need to identify and plan for sustained cost reductions, and deliver them as part of a well-managed change programme. This is an initial report on progress with cost reduction across central government. It provides an overview of how departments reduced costs in 2010-11 and gives a snapshot of progress with longer-term planning, based on National Audit Office examinations in 12 departments.