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Summary
Nearly £120 billion of taxpayers’ money was wasted or spent on useless projects by the
Government in 2011-12.
We have identified and listed hundreds of examples of spending
by politicians and bureaucrats that can be cut without closing a single hospital, firing a
single teacher or disbanding a single regiment.
Stopping wasteful spending like this and returning the money to those who earned it by
cutting taxes would make each household in the UK £4,500 better off.
Britain’s economy is still in dire straits. If we want a proper recovery we should leave more
money with families and businesses to save, spend and invest.
Taking so much money in high taxes, only to churn it all through a bureaucracy and hand
some of it back in benefits or grants, is wasteful and damaging to the economy.
It means that families are struggling to make ends meet.
To arrange broadcast interviews, please contact:
Jonathan Isaby
Political Director, TaxPayers’ Alliance
jonathan.isaby@taxpayersalliance.com
07795 084 113
To discuss the research, please contact:
John O’Connell
Research Director, TaxPayers’ Alliance
john.oconnell@taxpayersalliance.com
07708 506 643
£120 billion is enough to all but eliminate the deficit.
Politicians from all parties and bureaucrats at all levels squander taxpayers’
money every single day.
Cutting out the waste will save us a
55 Tufton Street, London, SW1P 3QL www.taxpayersalliance.com 0845 330 9554 (office hours) 07795 084 113 (24 hours) 2
£120 billion of wasteful and unnecessary spending
using official statistics, independent reports and media coverage.
We provide full sources
and details on page 10.
A list of links to those sources can be found at Appendix B,
starting on page 39.
This list only includes items of wasteful spending over £100 million.
Appendix A, starting on page 17, contains examples under £100 million.
#
Item Amount (£) Description
Overpaying on public sector pay
and pensions
53,077,270,000 The latest figure for the total public sector pay bill
is over £171 billion. The Office for National
Statistics found that public sector employees were
paid 8.2 per cent more than their private sector
counterparts. According to the Pension Policy
Institute’s latest analysis, the average value of a
public sector pension is 23 per cent of pay (reforms
will bring this down to 15 per cent in time). That’s
the total value to an employee, net of his or her
own contribution. So 31 per cent of the total pay
bill of £171 billion is £53 billion. When the Coalition
Government came into power, they implemented a
two-year public sector pay freeze. That clearly
hasn’t happened – statistics show that pay in the
public sector is still rising faster than in the private
sector. It would be impossible to cut the public
sector pay and pensions bill by £50 billion
overnight. Instead, ministers should implement
proper freezes where they have been avoided using
pay increment structures; tackle excessive senior
executive pay and rewards for failure; and push
through pension reforms to make them more
sustainable in the future.
Public sector fraud 20,300,000,000 The National Fraud Authority reports that fraud
costs the UK economy £73 billion. Over £20 billion
of that was the total cost of fraud to the public
sector, including central and local government.
Inefficient Public sector
procurement
15,000,000,000 The Institute of Directors recommended
centralising buying to manage key supplier
relationships and all national and major contracts
on behalf of the whole public sector. This would
offset duplication, as many organisations use
identical or similar products and services.
Outsourcing 10,000,000,000 The same report from the IoD said another £10
billion could be saved with better use of
outsourcing.
Benefits going to those with
incomes above £100,000
5,000,000,000 In Burning Our Money, Mike Denham found that
the bill for benefits going to families that don’t need
them is enormous.
RBS losses 2,000,000,000 According to RBS’s accounts for 2011, it lost £2
billion. The bank should be sold back into the
private sector as soon as is practically possible.
55 Tufton Street, London, SW1P 3QL www.taxpayersalliance.com 0845 330 9554 (office hours) 07795 084 113 (24 hours) 3
Item Amount (£) Description
Loss to the taxpayer of Northern
Rock sale 2,000,000,000 The sale of Northern Rock to Virgin Money on January 1st 2012 left taxpayers nursing more than
just a New Year’s Eve hangover.
Scrap the Department for
Business, Innovation and Skills
1,915,364,000 It’s not the job of politicians to pick winners using
taxpayers’ money. After stripping out the
responsibility for universities, BIS could be
abolished and the money used to cut business
taxes. Scrapping the old Department for Trade and
Industry was Liberal Democrat policy.
Ministry of Defence identified
inventory that had been
purchased but not used
1,500,000,000 The Department has a reputation for overstocking
and poor procurement and the Public Accounts
Committee has admonished it for failing to get to
grips with inventory management issues that were
first identified as far back as 1991.
Clinical negligence in the NHS 1,200,000,000 The bill for clinical negligence keeps on climbing.
The figure of £1.2 billion – for the 2011-12 financial
year – was an increase of more than £300 million
on the year before. The total provision set aside for
clinical negligence is £17.5 billion, according to the
Whole of Government Accounts.
Subsidising foreign farmers 1,183,000,000 In a 2012 report, Open Europe found that the UK
would make a net contribution to the Common
Agricultural Policy of £7.1 billion between 2007 and
2013. That is an annual net contribution of nearly
£1.2 billion.
Bringing NHS staff sickness rates
down to private sector levels 972,000,000 The public sector has a bad track record of sickness and absence compared to the private sector. NHS
Professionals, an organisation that provides staff to
the NHS, acknowledged this problem in a 2012
report. Getting sickness levels down towards
private sector levels – even adjusting for illnesses
due to the nature of NHS work – would save almost
a billion.
Scrap the Department for Culture,
Media and Sport 940,471,000 After stripping out spending on museum and gallery entry, the department should be shut down. The
department wastes enormous amounts of money
on projects of dubious value.
Annual spend on locum doctors 666,000,000 The NHS has paid £2 billion for agency doctors
since 2010-11. They are necessarily more
expensive and more difficult to schedule than
ordinary doctors. However, GPs now work out-ofhours
far less frequently than they used to and
centralised pay bargaining also means that Trust
far more on locum staff.
Missed hospital appointments 660,000,000 Appointments are free at the point of access,
meaning far too many unnecessary bookings are
made. There is often very little sanction for those
who don’t turn up and too many hospitals are
inflexible in the times they offer. The time of
doctors is extremely valuable and politicians should
look at the possibility of asking no-shows to foot
the bill.
Item Amount (£) Description
Defence project overruns 468,000,000 This is the increase in 2011-12 forecast costs to
complete all major defence projects. There was
also an increase in the forecast completion time of
139 months.
Tablet computers, education
games and electronic whiteboards
with little or no evidence that they
benefit children’s education
450,000,000 The educational charity Nesta found that iPads and
other such fancy equipment are often used for little
more than note taking. New technology can be
extremely worthwhile but publishers should be
providing them as part of whole school deals. Geoff
Mulgan, the Chief Executive of Nesta, was right to
say that “the emphasis is too often on shiny
hardware - rather than how it’s to be used.”
MoD loss on military equipment 430,896,000 This is the value of the reduction in numbers of
Challenger 2 tanks, Driver Training Tanks and
Challenger Armoured Repair and Recovery Vehicles,
as well as the reduction in the stockpile of Storm
Shadow Operational Missiles.
Making better use of office space 277,000,000 The TaxPayers’ Alliance found that Government
departments could have saved £112 million in just
one quarter of 2011 by using office space more
efficiently. Some departments, like HMRC, can get
better prices for property if a lot of their staff are
based outside London. However, even if we
discount those departments and measure how
much departments could save by matching the
performance of the Department for Education,
there are still significant annual savings to be
made.
Annual cost of repairing poorlyrelaid
roads by utility company
contractors
218,000,000 The Local Government Association found that
councils having to repair poorly re-laid surfaces by
utility company contractors costs taxpayers £218
million a year. We agree with the LGA – more
needs to be done to hold the contractors to
account.
Cost of prescribing of two
popularly used branded heart
medications, when generics could
have been used instead
200,000,000 Studies done by the NHS itself have found and
recommended savings in the prescriptions bill. Too
often GPs prescribe branded drugs when there is a
cheaper generic alternative. This bill is almost
certainly a lot higher – the study by Prescribing
Analytics only looked at two drugs.
Sending children of highly-paid
public sector employees to public
schools
166,000,000 A Daily Mirror investigation found that taxpayers
footed a £500 million bill in just three years to send
top Government officials’ children to the best
private schools. This subsidy should be kept to a
minimum, and state school options used where
possible.
Unused prescriptions 150,000,000 The Guardian reported that unused prescriptions
were incinerated rather than redispensed. The £150
million therefore only takes into account
prescriptions voluntarily returned to chemists
Item Amount (£) Description
Amount already spent in
development of £1.8 billion mass
surveillance programme
(snoopers’ charter)
135,000,000 Spending on the Data Communications Bill began
several years ago. It has now risen to nearly half a
billion. But at present, it’s not going ahead. A waste
of money on bad legislation. It was fought all the
way by campaign group Big Brother Watch, which
consistently pointed out the flaws and risks to
politicians. This is equivalent to an annual amount,
based on the money spent over three years.
Subsidies to trade unions 113,000,000 The TaxPayers’ Alliance found that trade unions
receive a subsidy of £113 million a year, which is a
conservative estimate. Taxpayers either pay
through direct grants or facility time, where public
sector staff work part- or even full-time for the
trade union rather than in the job they are paid to
do.
Amount wasted 119,022,001,000
Number of households, 2011 26,300,000
Waste per household 4,526
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