Rachel Reeves is eyeing up Elon Musk-style spending cuts to government waste in order to make the sums from today’s Spending Review. The Chancellor’s plans have raised incredulous eyebrows after Treasury documents revealed she is banking on a whopping £13.8 billion in efficiency savings.
According to the document, entitled ‘net efficiency gains vs 2025-26 planned Resource Department Expenditure Limits’, it also puts Wes Streeting’s Department for Health on course for an enormous £9 billion of the total £13.8 billion savings. Health is followed in a distant second place by Defence who have been told to find £905 million in efficiency savings, followed by HMRC with £773 million. It comes as every department has been ordered to find at least 5% cuts from cutting waste.
A Department for Health source did not seem fazed by the demands from Ms Reeves, insisting big savings are already being found.
They pointed to cutting corporate costs such as the department’s communications budget, cutting Integrated Care Board running costs by 50%, and abolishing National Health England.
DHSC also hopes that their new NHS App, which received £10 million in funding today, will save around £200 million in reducing the number of letters the health service sends to patients.
Finally they have cut £1 billion in agency staff costs.
However, Michael Gove suggested Labour will not make the promised savings, once again raising the threat of tax rises to make up the difference.
Responding to the Government’s efficiency plans, he quipped: “I have a bridge to sell you”.
Christian May, editor of the economic newspaper City AM, added: “The idea that Whitehall departments will make £14bn a year worth of ‘efficiency savings’ by 2028-2029 seems particularly heroic, and only adds to the growing expectation that the Chancellor will in fact reach for tax hikes to plug the gap.”
This speculation was added to this evening by Chief Secretary to the Treasury Darren Jones, who refused to rule out tax rises in Ms Reeves’ November Budget.
However Ms Reeves insisted to GB News that “taxes won’t need to go p to pay for what is in this spending review”.
Shadow Chancellor, Mel Stride said: “Labour can’t be trusted on tax. By only ruling out tax rises to fund this Spending Review, Labour is leaving the door wide open for yet another raid on the pockets of hardworking families and businesses in the autumn.”
“Instead of providing certainty, Labour ministers are playing games with carefully worded statements. British taxpayers deserve honesty – not caveats and loopholes. We can’t afford Labour.”