12. During the current spending review period, the Government is aiming to reduce overall government spending by £81 billion. We were informed that around half of this target could be achieved through efficiency savings across the public sector, with the remainder coming from cuts to existing and planned services and projects.21
13. Although an initial central push to introduce tighter controls over central government departments was understandable, sustainable improvements of this scale need a change in culture and capability and they need to have the support of all those responsible for delivering them across departments. The Group told us it considers this is beginning to happen as departments have spending settlements to deliver. By the end of the current Parliament, it expected its emphasis to be more on coaching, helping and advising rather than applying mandatory controls.22
14. The long term success of the Group will depend on how effectively it converts its central government leadership to a deep understanding of how to achieve sustained improvements in value for money. We will expect to see clear evidence that the Group is fulfilling this function. Lord Browne suggested that relevant measurable indicators to help assess the Group's long term impact would include:
• evidence of how the Group had affected the behaviour of those in government;
• evidence that decisions are made with greater commercial sense and a better understanding of risks and returns as a result;
• the extent to which activities are aligned with organisational strategy; and
• evidence that the Group is managing its own development and implementing changes so that it remains fit for purpose.23
15. Of the £40 billion spending reduction which Government is seeking to achieve through efficiency savings, the Group expects about half to come from central government, leaving some £20 billion to be achieved by the wider public sector. However, the Group's controls apply to central government departments and their arm's length bodies only, not to the wider public sector (which includes education, police and health bodies). This means that many of the efficiency savings Government seeks will need to come from areas where the Group currently has no direct role.24
16. One example is central government procurement, which accounts for about £60 billion of total public sector procurement spend of £236 billion. The Group is focusing initially on commodity procurement in central government, centralising £6 billion of expenditure, to build its credibility and allow departments to focus on other strategic procurement issues. Central deals made for central government will be available to the wider public sector.25 While public sector managers ought to choose better deals voluntarily if they are available, our report on NHS procurement indicated that this does not always happen.26 However, the Group told us it is working with the Department of Health to identify which elements of its central programme of work might apply to the NHS.27
17. Poor quality information inhibits assessment of performance, efficiency and effectiveness. Lord Browne told us that he believed understanding of the importance of management information among senior civil servants was "mixed" and that it will take time to reach the right standards.28 There is pressure from non-executive directors on the new departmental boards for standardised management information to allow comparisons to be made over time and between departments. The Group has made a start by introducing a standardised quarterly data review.29
18. As well as relevant and timely management information, the Group told us it is seeking to encourage the right skills among the civil service's senior leadership.30 In particular, senior civil servants need to have project management and implementation skills as well as their traditional expertise in policy analysis and advice. The implementation skills required include the exercise of commercial sense and a clear focus on achieving results. The Group recognised that civil servants will have different individual strengths in implementation and policy, and meeting skills needs will demand a diversity of talent within the civil service. Government needs to ensure that arrangements for staff recruitment, performance assessment, promotion and training enable the civil service to develop the required implementation skills.31
19. The Group noted in particular that it was seeking to ensure that the portfolio of major projects was managed by people with the necessary skills and resources, and it will intervene where there are gaps in capacity or capability.32 The Group also acknowledged there was a shortage of capable programme directors who could move between programmes according to need. The Group told us it is working towards an understanding of skills needs across the portfolio of projects and available capabilities. This could enable a different staffing model where people with subject-specific expertise could be deployed more flexibly to deal with problems which arise on projects.33
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21 Q 86
26 Committee of Public Accounts, Thirty-fifth Report of Session 2010-12, The procurement of consumables by National Health Service acute and Foundation Trusts, HC 875
27 Qq 71-75; Ev 18
28 Q 17
29 Qq 16-17
30 Q 85
32 Qq 95-97; Ev 18
33 Qq 89-93; Ev 18