Red tape bonfire 'would save £45bn'

Friday, November 20, 2009

The government could save £4.5bn a year without damaging frontline services if it had a "bonfire" of bureaucracy and targets, according to a report by the Local Government Association.

'Delivering more for less: maximising value in the public sector' pointed out that £1.5bn could be saved by a 20 per cent cut in administration costs for seven government departments with close links to local authorities. It also claimed that £1bn could be saved on departmental resource budgets by cutting "unnecessary" policy activity while £900m could be saved by giving councils greater spending flexibility.

The report also claimed that £430m could be clawed back from "unnecessary" spending on administration by quangos, £400m could be saved if "data burdens" such as performance indicators and reporting to central government were removed from councils, and £250m could be saved by halving direct costs of regulating local government, abolishing government offices and reallocating funding for central improvement bodies to local government.

The LGA said that the money saved could fund 300,000 school places, 175,000 personal care packages and 36,000 miles of road resurfacing.

LGA chair Margaret Eaton said: "Billions of pounds of taxpayers' money is being spent on needless bureaucracy. We need a bonfire of red tape so that taxpayers' money can be freed up to protect frontline services. Things need to be done better and cheaper. If we are to repay the large public debt, we simply cannot afford the same amount of excessive central activity and control of local services. The recession is forcing everybody who spends taxpayers' money to think about how they can do more with less. Staying the same is not an option."

She added: "Councils are determined not to rest on their laurels and will look to make even more efficiency savings, but are being held back by the costs of centralised regulation, inspections and bureaucracy. This expenditure is taking resources away from frontline services."