Covid crisis: how to save £30 billion

New report sets out £30bn in government savings:

How the Government can save £30 billion.  The Centre for Policy Studies has set out nine practical ideas for savings or asset sales which would deliver £30 billion a year to the Treasury without impacting frontline services or the coronavirus response

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• The coronavirus crisis has left a gaping hole in the public finances.
• Government figured being released this week (Wednesday) are expected to show borrowing has reached historic levels as a result of the pandemic.
• Instead of raising taxes, which would risk choking off recovery, the Government should first ensure that every pound of existing spending is being used wisely.
• The Centre for Policy Studies has set out nine practical ideas for savings or asset sales which would deliver £30 billion a year to the Treasury without impacting frontline services or the coronavirus response.
• This would allow the Government to fund many of its priorities without hitting hardworking families or hard-pressed businesses with higher taxes.

The Government has the potential to save at least £30 billion a year over the spending review period without affecting frontline services, according to a leading think tank.

In the wake of the coronavirus crisis, there will inevitably be calls for further tax rises to fill the gap in the nation’s finances. However, a new report by the Centre for Policy Studies outlines nine areas where the Government could make easy savings, or realise extra value, without increasing the burden on ordinary families and small businesses.

The proposals being put forward are:

• Replacing the pensions triple lock with a double lock, and reducing the Winter Fuel Payment for richer pensioners
• Forcing Government departments to reduce admin costs at the same rate as the private sector
• Cutting the number of quangos and combining their back-office functions
• Streamlining local government and its administrative costs
• Improving e-procurement and data-sharing, as well as fixing other obvious problems with the procurement system
• Selling a small proportion of public sector land, and replacing dilapidated schools, hospitals etc
• Selling and replacing high-value council properties as they become vacant
• Rolling child benefit into the child tax credit system, and tightening eligibility requirements
• Cutting or redefining overseas aid in line with reduced global need.

On top of the 5% savings that the Chancellor asked each department to produce at the start of the year, this £30 billion a year should give the Chancellor much-needed headroom to cope with the increased spending and decreased tax revenues that result from the coronavirus lockdown and associated support measures.

Alex Morton, Head of Policy at the CPS, said:

“Taxes are already at historic highs, and any further increases risks choking off any post-Covid recovery. The Government must re-examine its existing spending and ensure it is getting good value before considering raising tax further still.

“This package of savings is simultaneously radical but realistic – delivering better value for money for voters and allowing the Government to continue funding its priorities. We strongly encourage the Chancellor and his team to explore our suggestions ahead of the Spending Review and Budget, and to identify any further savings that can be made.”