9 Apr 2010

Tories still won’t publish efficiency savings calculations in full

For ten days a furious election battle about National insurance has raged- underpinning that row are the calculations of two elusive men Sir Peter Gershon and Martin Read.

Their calculation that £12bn can be saved immediately and painlessly is central to David Cameron and George Osborne’s entire election tax and spending plans. Today they inadvertently burst in to the heart of the debate.

George Osborne’s adviser Dr Martin Read did not want to appear on camera, but has spoken exclusively to Channel 4 News business correspondent Siobhan Kennedy to express concern about Labour characterisations of his numbers as being “back of the envelope” calculations of savings through five anti-waste strategies such as reducing IT and not replacing staff who leave.

Dr Martin Read told Channel 4 News: “Let me assure you this is a very serious piece of work, behind each of those 5 points there are detailed numbers, and I am 100 per cent convinced that with the right political will and managerial motivation those savings can be got in the first year”

However, Dr Read went on to tell us that he had provided the Conservative party with detailed numbers and that ‘the Tories have the numbers and it’s for the Tories to disclose them’.

So as it stands, the Conservative Party has decided to hold back important information on the “painless” cuts that it plans this year that we know it has received from its adviser.

Sir Peter Gershon did a separate assessment for the Conservatives, and today partially broke cover, in an interview with the Financial Times not planned by Conservative campaign headquarters.

The £12bn in efficiencies he hopes to make in the current financial year 2010-11, IT will generate “potentially at least” £2bn to £4bn, renegotiating contracts will yield £3bn, axing discretionary spending such as consultants would save £2.5bn.

While pruning staff costs saves £1bn-2bn. But that’s most of the detail we have seen – raising allegations that the savings have effectively been drawn up on the back of a fag packet.  And that they couldn’t be delivered without cutting frontline services or up to 40,000 jobs.

 A party spokesman said: “Peter Gershon has provided indicative numbers as set out in today’s FT. Martin Read independently produced similar figures.

“We’ve always said that we can’t give exact numbers from opposition, but these indicative numbers give us the confidence that the total of £12 billion is achievable and realistic.”

Labour today seized on this as evidence of a public sector jobs cut agenda. But the Conservatives pointed out that these cuts were in fact from natural process of workers leaving their jobs.

Labour too has some problems with candour and clarity. They won’t publish the Treasury impact assessment of just how many jobs may be cost by an increase in national insurance and they were being attacked by the Conservatives for that.

At this election time it is perhaps unsurprising that the main parties don’t want to tell the electorate exactly what sort of pain is in store, but the markets aren’t impressed.

And they won’t be impressed by a raft of tax promises in the manifestos either.