Chancellor Alistair Darling this week halved his predictions for growth in public spending from 2011, but insisted that capital investment would continue at ‘historically-high levels’ through ring-fenced efficiency savings.
The revised forecasts from the Treasury slashed growth in spending from 2011/12 onwards from the 1.3% announced in November to 0.7%. There was relief, however, that the 2010/11 allocations for local government would be honoured – but with a demand for an extra 1% in savings.
The Government called for an extra £15bn in public sector efficiency savings in total by 2013/14, £6bn required by 2011, with councils expected to find £5.5bn all told. The plan is for £6.1bn to come from collaborative procurement, with further scope pinpointed for re-tendering highway maintenance contracts.
The HA has been asked to find a further £200M in efficiency savings in 2010/11 alone, having found £238M from 2005 to 2008.
From 2011, the Government wants more of the efficiencies to come from the sale of property assets, including from the £100bn local government estate, excluding council houses.
The Treasury believes that property sales by reducing the average space for employees could release £20bn, which it would allow the public sector to reinvest. Hampshire County Council, a Treasury review highlighted, raised £300M by disposing of surplus land and buildings, including by cutting county office locations.
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