“To save £6bn in a year when you look at issues like procurement, when you look at issues like recruitment, when you look at your energy and electricity bills and everything else that government has, that is not a challenging target. And we know that because Peter Gershon and others have said that.”
David Cameron, Conservative leader, 8 April 2009
“That means they [The Conservative Party] are asking people to believe that they can nearly double our savings figure, in one year adding £12bn to the existing £15bn already underway.”
Alistair Darling, Chancellor of the Exchequer, 8 April 2009
Cathy Newman checks it out
You can hear the voice of Deep Throat on the campaign trail urging us all to follow the money.
The three political leaders seem to think that bandying about different multi-billion pound sums holds the key to electoral success.
At the heart of the two parties’ claims and counter-claims is this stretch of clear blue water: the Conservatives think they can cut more waste, faster – to fund tax cuts and reduce the deficit. Labour says the Tories are wrong. So who’s got their sums right?
There’s a certain sense of déjà vu around the Tory’s economic policy for this election. Remember the James review at the last election? It advocated tax cuts paid for by efficiency savings, and the party ended up having to defend it night after night.
Last week, George Osborne triumphantly announced the Conservatives would be able to make £12bn of efficiency savings in 2010/11, of which £6bn would be used to pay off the UK’s deficit.
The fanfare was accompanied by a document included statements from Peter Gershon and Martin Read, who have advised the government on efficiency savings.
Today Labour came out with all guns blazing to dismiss the Tory targets for efficiency savings for this financial year as unachievable. They said they were already making £15bn in efficiency savings this year, and that almost doubling the savings by the £12bn in the Tory plan was not credible.
They released an 11-page document saying where they were already making savings under the five headings the Conservatives had identified.
The Tories’ entire economic strategy rested on a “flimsy” four-page press release setting out their savings plan, the prime minister said, dismissing the Conservative figures as “back-of-envelope set of calculations.”
Cameron retorted that the government were “rattled” that they are losing the argument on the economy. But are his numbers really as solid as he would have you believe?
The James review at the last election ran to 173 pages. This time round the Conservative’s supporting statements from Peter Gershon and Martin Read were two sides of A4 each – the “flimsy” four pages the prime minister referred to. They were attached to 10 pages summarising the Conservative position.
The savings would be brought forward from those the government has outlined for next year (which, FactCheck has already established, may not be as certain as this year’s budget would suggest), and the Tories promise they will not affect frontline services.
But that is all the detail they have released, and George Osborne himself said last week that they would not specify exactly where the savings would come from until they were in government and had more information than they have in opposition.
And that really is the crux of the problem. The Institute for Fiscal Studies told FactCheck there really isn’t enough information to decide whether Labour or the Tories are right.
The Conservative party still refuse to supply further details, and Gershon and Read have repeatedly declined interviews.
Because there’s not a lot to go on, there are widely differing views on whether the policy is achievable.
Geoffrey Wood, Professor of Economics at Cass Business School, City University, told FactCheck: “In terms of what a private company might achieve the Conservatives’ plans are modest. The government is being far too cautious, and could certainly find more. A few definitions would help. For example, what is a frontline service?”
But his colleague Professor Andrew Clare said it was “all nonsense, designed to obscure the fact that savage public sector spending cuts will be necessary.”
And there’s still the question of whether these efficiency savings will really release the amount of money the Tories are banking on, as FactCheck has found before.
In February 2007 the National Audit Office said only around a quarter of the savings the government claimed to make under Peter Gershon’s review for them “fairly represent efficiencies made”.
Cathy Newman’s verdict
The Conservative plans may have the strength of a house of cards, as Labour claims, or the Tories may have a few trump cards up their sleeves yet.
It’s impossible to know. The devil is in the lack of detail.
And the devillishly uncomfortable truth for Labour and the Tories is that whoever wins the election will have to make real cuts to public services. Both parties are using efficiency savings as a figleaf to conceal that fact.
UPDATE: This morning, Sir Peter Gershon put some more flesh on the bones to the Conservative proposals.
He told the Financial Times that £2bn could be saved by reducing employment in the public sector by 20,000-40,000, through not filling vacant posts and driving down the use of agency and contract staff.
FactCheck will be looking at this again now we have more details and will update this entry with what we find out.