'Common sense' could save Government £9bn a year

The Government could save £9 billion every year through "plain common sense", the chair of the Public Accounts Committee said today.

Tory Edward Leigh has written to Chancellor Alistair Darling setting out ways to improve the management of finances and information in Whitehall departments and reduce the complexity of bureaucracy.

Opening a Commons debate on the work of the PAC, Mr Leigh said the committee had saved the Government more than £4 billion over the past eight years.

He said: "Whichever party finds itself occupying the Government benches after the next election, sensible ways to reduce public spending will be all the vogue.

"Civil servants don't need to reinvent the wheel; simply by looking at the problem, taking on sound advice and acting in a planned, considered and thorough way, they can save themselves time, money and a grilling from the PAC."

Mr Leigh (Gainsborough) told MPs of the regular investigations the cross-party committee had carried out into the activities of Government departments and agencies.

On procurement, he said Whitehall departments needed to rid themselves of "cosy relationships" with suppliers and become more business-minded.

"Cosy relationships and a lack of control prevail," he said.

"After analysing these huge contracts, the National Audit Office advised the committee that around £300 million could be saved each year.

"I think it's high time for departments to subject suppliers to the public sector to the same pressures that those suppliers face in business.

"No taxpayer's pound should be an easy pound of profit and too often it is."

Mr Leigh pointed to a PAC report produced in 2003 highlighting savings that could be made by the Prison Service.

Changes to its approach in procurement had since saved £120 million over five years - a "great achievement".

He urged civil servants to "shout about" the efficiencies they had found.

"Tell your counterparts what you've achieved, how they can do it too and help make it common practice not best practice."

The PAC estimates that £1.3 billion could be saved by reducing running costs in departments; £2.5 billion by cutting staff; £1.4 billion by sharing back office services like human resources; £2.6 billion by improving the management of public sector construction projects; £110 million by simplifying the benefits system; £220 million by joint purchasing of food and catering services; £520 million by exploiting the Government's buying power; and £408 million by cutting spending on consultants.

Mr Leigh said it was "high time" that the NAO should be allowed access to three "hugely important and publicly funded bodies" - the Bank of England, BBC and Financial Services Agency.

He welcomed Culture Secretary Ben Bradshaw's recent statement that the BBC should allow the NAO to access its accounts.

"It is past time, frankly. This is an organisation spending billions of pounds of public money," Mr Leigh said.

"It should be fully accountable to Parliament and there is absolutely no threat to its editorial independence."

The coming months would be financially tough for constituents and the country at large, he said.

"I urge those from this House who make such decisions to keep in mind the work of the PAC and remember we are a friend not a foe.

"If we make our witnesses squirm, it is because every pound our constituents give matters."

For the Liberal Democrats Colin Breed praised Mr Leigh and the committee's work.

He said: "You have raised the profile considerably within the public mind with proper use of the media in this.

"You have exposed things which should have had light shone upon them. I am surprised it is only £4 billion that you have saved."

Mr Breed said he had been "astounded" at the amount of work produced by the PAC.

Labour's Austin Mitchell (Great Grimsby), a PAC member, said the work of the committee and its role in highlighting waste and inefficiency would only become more important as the recession worsened.

He added: "But the problem is not big government as David Cameron has identified, it is not scale of government, it is the efficiency of government.

"Bigger government is the only way of coping with the recession, our job is not to argue about its scale, it is to make it more efficient and to see that it functions economically and effectively for the purposes of the public."