Rachel Reeves's secret plan to save her job

Yahoo

2 days ago

While all eyes were trained on the despatch box as Rachel Reeves delivered her spending review, a newly created government department quietly published what could be the Chancellor's lifeline.
Claiming to have found more than £27bn behind the sofa, this document looks suspiciously like a get-out-of-jail-free card for the chancellor.
The soporifically titled 'Departmental Efficiency Delivery Plans' is the surprise result of the Office for Value for Money, which Reeves invented for her debut Budget and has until now been little more than a select committee punching bag.
Mired in controversy over its chief's salary, equivalent to £250k per year, and concerns it will waste taxpayer money rather than save it, Reeves's brainchild has now created fiscal headroom out of thin air.
By the end of this spending review period in 2028-29, the Government will supposedly have saved £27.7bn, slightly larger than a black hole. The annual saving for that year is predicted to be £13.8bn, more than doubling Reeves's fiscal headroom, which has been rapidly dwindling as borrowing costs surge and growth forecasts are downgraded.
Only published on Wednesday, these figures couldn't have been factored into either of the Office for Budget Responsibility's forecasts produced for this Labour government.
So, where does this free money, sourced neither from the taxpayer nor lenders, come from?
There are certainly commendable ideas within it, such as renegotiating contracts with external providers, using fewer temporary agency staff and, thankfully, calling time on a raft of consultants.
Dig a little deeper, however, and these 'efficiency gains' start to look more and more ludicrous, and surely unquantifiable.
Apparently, we can calculate the millions of pounds to be saved from the Department for Education 'getting maximum value from every pound of public money'. We know that 'using digital technology more effectively' will add to Treasury coffers, and 'improving efficiency' is apparently enough to put a pound figure on.
We have factored in savings from hiring fewer temporary workers in the NHS, which will be achieved by 'reducing sickness absence'. There is no detail how this might happen, but Office for Value for Money chairman David Goldstone, the man behind such great efficiency hits as HS2, has implicitly signed off forecasts based on people being sick less next year.
Nobody tell the soldiers, but part of the Ministry of Defence's £105m 'energy efficiency' savings will come from installing low-flow toilets.
HMRC's plan to save £1.3bn is largely comprised of using computers a bit more, while nearly every department is convinced they can quantify the benefits of AI.
At least these come with some semblance of possibility; the Department for Culture, Media and Sport is going to save £14m by 'merging websites' and restructuring its marketing team.
It remains to be seen whether Rachel Reeves will indeed hold the document aloft in the autumn to declare her 'iron-clad' fiscal rules have been met, although it would be strange to leave billions of pounds of no-strings money on the table.
But, like much of the Chancellor's economic policy to date, I doubt it will stand up to much scrutiny.
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