Labels: waste • Money wasted through inefficiency, says report London councils are said to be overspending by 15%, according to new research. Photograph: David Levene Up to 15% of spending on public services is being wasted through duplication and inefficiency, according to research that suggests huge savings could be made without harming schools, hospitals and social care. The government spent £73.6bn on services in London last year, but today's detailed analysis suggests about £11bn of that was wasted. If the figures were repeated across the country £15 in every £100 spent on public services could be saved, more than enough to tackle the fiscal crisis and dramatically reduce public debt. The study, commissioned by London Councils, which represents local authorities in the capital, is the first to put a global figure on spending in the capital. That £73.6bn figure equates to about £10,000 for every Londoner. The analysis calculates spending from local and national government as well as quangos. The technique used is called Total Place and is being championed by the Treasury in pilots in 13 areas to look at reducing costs. It looks at the needs of people in an area, how money is being spent and identifies where efficiencies could be made. London Councils commissioned the accountants PricewaterhouseCoopers (PwC) to apply the Total Place technique to the whole of London and scrutinise spending on managing the health of people with long-term conditions, worklessness and the impact of antisocial youth. A "complex web" of services is weakening public services, the report – seen by the Guardian – says. "Overcrowding of agencies can lead to confusion in delivery while different national goals often can conflict with each other," it concludes. Merrick Cockell, chairman of London Councils, said: "We have long been aware that councils do not operate within a perfect system. The way public bodies are funded, and the number of different organisations working for similar or overlapping aims, unfortunately make waste inevitable. "However, PwC's research has shown us a way to radically reduce London's burden on the public purse while still improving the services we offer Londoners. Amidst the ongoing debate around the public sector funding squeeze, we will be thoroughly examining their conclusions in the hope of setting out significant reforms for the capital in the coming months." Total Place is being led by the former permanent secretary Sir Michael Bichard. Initial findings from the pilots suggested it could save 1% of public spending. With government spending on public services at £500bn in the UK as a whole, it could save between £5bn and £50bn annually. Labour has promised to halve the £178bn public deficit within four years, while the Conservatives said they would act even sooner. The Conservatives have said they will support the Total Place initiative if they win the election. Labels: big government, waste
MONDAY, JANUARY 25, 2010
15% Gets Wasted - Official-----(So that's £75bn pa. !!!!!it comes from HMG.Just flushed away down the bog.)
Total Place is a new initiative that looks at how a ‘whole area’ approach to public services can lead to better services at less cost. It seeks to identify and avoid overlap and duplication between organisations – delivering a step change in both service improvement and efficiency at the local level, as well as across Whitehall.
Public services could cut costs by 15%
• Up to £11bn lost in London alone, research concludes 
TUESDAY, NOVEMBER 17, 2009
Big And Inefficient
There are a number of studies that have attempted to answer such questions. One of the best known was published by the European Central Bank in 2003 - Public Sector Efficiency: An International Comparison, by Afonso, Schuknecht, and Tanzi.
The ECB study seeks to compare the outputs of government with their costs. The costs comprise the share of government expenditure in GDP, which is straightforward. The outputs are more difficult to measure, but include a wide range of indicators, from economic growth and stability, to health and educational outcomes (see paper for more detail).
These calculations are done for 23 industrialised OECD economies, and comparisons made.
Overall, the study finds that the most efficient government sectors are those in the US, Japan, and Switzerland.
The UK is by no means the worst, but lags way behind the leaders. Indeed, if our government could achieve the same level of efficiency as the three leaders, we could save roughly £140bn pa relative to the current level of UK government spending. Which would go a long way towards digging us out of Brown's hole.
And the study gives a very interesting insight into the relationship between efficiency and size. And guess what - it turns out the most efficient governments are also the smallest.
Here's a chart we've put together comparing each government's efficiency score with its cost as a share of GDP (note: the efficiency scores relate to 2000, and the GDP shares are averages for the previous decade):
As we can see, efficiency tends to decline quite markedly as government gets bigger. On average, for every 10 percentage point increase in government's share of GDP, efficiency declines by 15-20% (the estimated parameter says 16.6%, but let's not get too precise, especially since this is a simple linear regression).
The bottom line is that if you want to have big government, you have to accept a high degree of inefficiency (aka waste). In our chart, the very biggest government belonged to Sweden, and its efficiency levels were correspondingly abysmal (interestingly, over recent years Sweden has been slimming down its bloated public sector, partly through those school reforms we hear so much about).
To put this another way, the only countries that can afford Big Government are rich countries that can bear the costs of its inefficiency. The UK can certainly no longer afford that luxury.
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