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
Item description
Annual saving, £m
 
 
 
 
 
Tackling areas of spending that are not performing
Reducing items of spending that don’t work
 
£5,477
1
Abolish the Bus Service Operators’ Grant
£451
 
2
Abolish Sure Start
£1,456
 
3
Abolish Building Schools for the Future
£2,300
 
4
Abolish the Education Maintenance Allowance
£530
 
5
Halt further orders and upgrades for the Eurofighter
£740
 
 
 
 
 
 
Curbing over-extended government
Stopping government doing things it shouldn’t be doing
 
£1,595
6
Halve the government advertising and publicity budget
£270
 
7
Abolish Contact Point, the children’s database
£44
 
8
Abolish the NHS National Programme for IT (NPfIT)
£1,181
 
9
Abolish identity cards
£55
 
10
Abandon plans to extend the compulsory school leaving age to 18
£45
 
 
 
 
 
 
Cutting out the middle-man
Reducing agencies and people that get in the way of the frontline
 
£6,928
11
Halve public sector spending on consultants
£1,100
 
12
Reduce non-frontline staff in health and schools by 10 per cent
£921
 
13
Reduce the size of the civil service by 10 per cent
£1,233
 
14
Scale down ‘Local Education Authorities’ (LEAs) in England
£599
 
15
Slim down the Department for Communities and Local Government (DCLG)
£1,317
 
16
Rationalise the framework of regional government and business support
£940
 
17
Begin a thorough rationalisation of taxpayer funded quangos and public bodies, including total abolitions, funding reallocations and budget cuts
£818
 
 
 
 
 
 
Tackling specific budgets
Taking a more blanket approach on specific budgets
 
£6,491
18
Cut 25 per cent from the budget of the Department for Culture, Media and Sport (DCMS)
£725
 
19
One year freeze of the resource and capital budgets of the Department for International Development
£862
 
20
One year freeze of the Home Office resource and capital budgets
£360
 
21
One year freeze of the grants from the Department for Communities and Local Government to local and regional governments
£687
 
22
Cut 10 per cent from the budgets of non-ministerial departments, except for UK Trade and Investment and the UK Statistics Authority
£1,700
 
23
One year freeze of the grants given to Scotland, Northern Ireland and Wales (current spending only)
£1,400
 
24
Simplify and rationalise the skills system and the plethora of skills programmes
£757
 
 
 
 
 
 
Tackling above-inflation indexing
Increasing payments in line with inflation, but no more
 
£1,441
25
One year freeze of the Basic State Pension and the Minimum Income Guarantee
£1,441
 
 
 
 
 
 
Restraining public sector pay and perks
Recognising that the public sector has had a good deal recently
 
£8,711
26
One year pay freeze across the public sector, excluding members of the armed forces serving in conflict zones
£6,203
 
27
Increase employee contributions to all unfunded public sector pension schemes by a third
£2,508
 
 
 
 
 
 
Cutting middle-class welfare
Stopping paying benefits to people who don’t need them
 
£11,999
28
Abolish Child Benefit and the Child Trust Fund, and increase the Child Element of the Child Tax Credit to address child poverty concerns
£8,447
 
29
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
£1,350
 
30
Target spending on free bus passes for the elderly and disabled on those who genuinely need it
£438
 
31
Abolish free TV licences
£564
 
32
Abolish interest subsidy to student loans
£1,200
 
 
 
 
 
 
Total annual saving from 2010-11 onwards
 
£42,642
 
 
 
 
 
Further emergency possibilities after 2010
If fiscal conditions were so bad as to require emergency savings
 
£7,421
33
A further one year pay freeze across the public sector, excluding members of the armed forces serving in conflict zones
£6,203
 
34
Reduce gross annual pay by 5 per cent for the richest 10 per cent in the public sector
£1,218
 
 
 
 
 
 
Total potential annual saving from 2011-12 onwards
 
£50,063

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

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