Thursday, 10 September 2009

New TaxPayers' Alliance and Institute of Directors Joint Report: "How to save £50 billion"

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A groundbreaking new report jointly produced by the TaxPayers' Alliance (TPA) and the Institute of Directors (IoD) lays out detailed proposals to save £50 billion of annual public expenditure. Inspired by the dire state of the public finances, which both David Cameron and Chancellor Alistair Darling this week said requires action, the two organisations - the leading bodies representing taxpayers and company directors, respectively - have joined forces to produce a series of 32 practical steps which have the potential to save £42.5 billion a year from 2010-11 and a further 2 steps saving £7.5 billion that could be introduced from 2011-12.
Key Findings
The full programme of 34 proposed savings consists of:
Item description
Annual saving, £m
Tackling areas of spending that are not performing
Reducing items of spending that don’t work
Abolish the Bus Service Operators’ Grant
Abolish Sure Start
Abolish Building Schools for the Future
Abolish the Education Maintenance Allowance
Halt further orders and upgrades for the Eurofighter
Curbing over-extended government
Stopping government doing things it shouldn’t be doing
Halve the government advertising and publicity budget
Abolish Contact Point, the children’s database
Abolish the NHS National Programme for IT (NPfIT)
Abolish identity cards
Abandon plans to extend the compulsory school leaving age to 18
Cutting out the middle-man
Reducing agencies and people that get in the way of the frontline
Halve public sector spending on consultants
Reduce non-frontline staff in health and schools by 10 per cent
Reduce the size of the civil service by 10 per cent
Scale down ‘Local Education Authorities’ (LEAs) in England
Slim down the Department for Communities and Local Government (DCLG)
Rationalise the framework of regional government and business support
Begin a thorough rationalisation of taxpayer funded quangos and public bodies, including total abolitions, funding reallocations and budget cuts
Tackling specific budgets
Taking a more blanket approach on specific budgets
Cut 25 per cent from the budget of the Department for Culture, Media and Sport (DCMS)
One year freeze of the resource and capital budgets of the Department for International Development
One year freeze of the Home Office resource and capital budgets
One year freeze of the grants from the Department for Communities and Local Government to local and regional governments
Cut 10 per cent from the budgets of non-ministerial departments, except for UK Trade and Investment and the UK Statistics Authority
One year freeze of the grants given to Scotland, Northern Ireland and Wales (current spending only)
Simplify and rationalise the skills system and the plethora of skills programmes
Tackling above-inflation indexing
Increasing payments in line with inflation, but no more
One year freeze of the Basic State Pension and the Minimum Income Guarantee
Restraining public sector pay and perks
Recognising that the public sector has had a good deal recently
One year pay freeze across the public sector, excluding members of the armed forces serving in conflict zones
Increase employee contributions to all unfunded public sector pension schemes by a third
Cutting middle-class welfare
Stopping paying benefits to people who don’t need them
Abolish Child Benefit and the Child Trust Fund, and increase the Child Element of the Child Tax Credit to address child poverty concerns
Taper away the Family Element of the Child Tax Credit at 39 per cent immediately upon exhaustion of the Child Element of the Child Tax Credit
Target spending on free bus passes for the elderly and disabled on those who genuinely need it
Abolish free TV licences
Abolish interest subsidy to student loans
Total annual saving from 2010-11 onwards
Further emergency possibilities after 2010
If fiscal conditions were so bad as to require emergency savings
A further one year pay freeze across the public sector, excluding members of the armed forces serving in conflict zones
Reduce gross annual pay by 5 per cent for the richest 10 per cent in the public sector
Total potential annual saving from 2011-12 onwards

For full details of each proposal, please see the relevant section of the full report, which is available online here.

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