Annex

DETAILED BREAKOUT BY AREA

Area

Activity description

Exact amount Evidence Base / Calculation

Benefits statement

Consulting

We put in place a moratorium on new consulting spend, and extensions to existing contracts. Where spend was considered operationally critical (for example, where it might put at risk critical services) an exception process existed for department ministers to sign off expenditure over £20,000.

£869 million

Savings are calculated by subtracting total departmental reported spend on consultancy for 2010-11 from total departmental reported spend on consultancy for 2009-10. To reduce the risk of costs shifting between categories, we also monitored expenditure on other Professional Services categories, including contingent labour.

Departments report a dramatic reduction in discretionary spend: A reduction in spend on consulting of £870 million from £1.2 billion to £0.4 billionn, or 71%.

Crown Commercial

We've renegotiated deals with some of the largest suppliers to government.

£806 million  

The method of calculation varies according to the initiative that yields the saving, but was based on cash releasing savings against a baseline of what would have otherwise been spent. This was often price savings against the previous price paid.

Crown Commercial

Contingent Labour

We significantly cut the number of temporary staff.

£492 million

Savings are calculated by subtracting total departmental reported spend on contingent labour for 2010-11 from total departmental reported spend on contingent labour for 2009-10.

Departments report a dramatic reduction in discretionary spend: A reduction in spend on temporary agency staff of almost £500 million, from £1.2 billion to £0.7 billion, or 41%.

Communications

We froze all new marketing spend unless it is an operational necessity. Where spend was proposed, Ministerial sign-off was required for £20,000 or above.

£397 million

Calculations compare departmental spend on marketing and advertising through COI for 2010-11 with that for 2009-10.

We've taken much stronger control of our procurement spend: By taking stronger control of our marketing spend, we have reduced spend through the Central Office of Information on relevant categories by 80% or £400 million.

Centralising Procurement

We've started to centralise spend on common goods and services to drive down prices. These savings derive from the 10 categories of expenditure targeted for centralisation, and relate to price savings through increased aggregation.

£357 million  

For each initiative, calculations are performed using individual benefit methodologies that set out how savings will be calculated against an 2009-10 market price baseline. Evidence is management information provided by suppliers.

We've taken stronger control of our procurement spend. By starting to centralise spend on common goods and services, we've already saved £360 million, with more to come in future years.

HR

Government has taken measures to reduce the size of the civil service, including the introduction of a moratorium on Civil Service recruitment, with exemptions for certain front line services, and exception processes in place to deal with. Together these measures have contributed to a reduction in the size of the civil service of 17k.

£300 million  

Savings are measured using the fall in Civil Service employment from the baseline of Civil Service employment levels as at Q2 2010 (end of June 2010). The end of June position is taken as the baseline since this is the first quarter after the freeze on external recruitment was announced. Savings are based on savings from the estimated pay bill. They are not net of any costs associated with departures.

We've reduced the size of the civil service, for example by putting stronger controls on non-essential recruitment. This has contributed to a reduction in the size of the Civil Service of more than 17,000, equivalent to a £300 million saving in 2010-11 on salary costs.

ICT

We implemented:

(a)  a moratorium on all new ICT spend above £1 million; and

(b)  a review of all on-going ICT commitments.

Departments also reported those projects that were closed before undergoing the review

£296 million  

Calculations are based on departmental reports of spend that has not proceeded Spend that has not gone ahead in 2010-11 is recorded, as a result of stopping or reducing spend. Further, sustainable savings are targeted through the Government ICT strategy.

By applying greater scrutiny to our ICT expenditure departments have stopped or reduced spend on low value ICT projects worth £300 million.

Major Projects

We reviewed the Government's biggest projects to see where 2010-11 costs could practically be reduced within contractual constraints, or wasteful projects stopped altogether.

We've halted or curtailed spend on four projects:

£147 million  

HMT have provided assurance that the relevant amounts were removed from departmental budgets following the Major Projects related negotiations.

We've applied greater scrutiny to our projects. We've saved £150 million from 2010-11 budgets for government's major projects by scrutinising their funding, and by halting or curtailing spend.

Area

Activity description

Exact amount Evidence Base / Calculation

Benefits statement

Property 

-  14-19 Reform-60 million

-  Identity Cards-50 million

-  Highways Agency Projects-54
million

-  Whole Farm-five million

We have redacted £22 million of potential double counting from these figures, that arises between this work and our supplier renegotiation work stream. £14.9s million arises from the Home Office National Identity Cards and £6.7 million from Defra Whole Farm. We put in place national property controls such that signature of new property leases or lease extensions were approved centrally. It has not always been possible to net off all costs associated with vacating buildings. However, we have also not claimed savings in respect of revenue from property disposals.

£91 million

Calculations are property by property based on the amount departments have reported saved through the Government's property database by non-renewal of property leases at lease breaks or upon lease expiry.

We reduced the on-going cost of our Property estate by over £90 million by exerting better control over lease renewals.

Total

£3,755 million

Taken together these measures have saved £3.75 billion over 2010-11.