Some Conservative and Labour politicians talk about cutting
waste as if central government's excesses were stacked up like tins
on a wall, waiting to be shot down. The reality is that the tins
are fixed to the wall and the guns fire blanks - although they make
a lot of noise.
The Gershon Review, instigated by Labour, says that government
departments can cut £20bn from their administration costs by 2008.
The James report, instigated by the Conservatives, projects savings
of at least £34bn.
The savings identified in both reports are largely dependent on
technology. A merging of departments, for example, will only save
enormous sums if there is a uniform way of doing things, supported
by modified or replacement technology which, ideally, has been
standardised. That is one reason why Tony Blair, in an address to
government CIOs, said technology is central to the reforms arising
from the Gershon Review.
But between the genuine wishes of politicians to cut the
administration costs of central government and reality there lies a
chasm many miles wide.
The merging of Inland Revenue and Customs & Excise seems a
straightforward way to cut costs - both departments collect taxes
and enforce the payment of them. But the Revenue and Customs have
not yet, after six months of discussion, reached agreement about
standardising their main IT contracts, let alone bringing together
tax and customs duty collection software, or introducing
standardised business processes.
No doubt there will be a single contract eventually, largely
because of the diligent and gifted efforts of Steve Lamey, CIO at
HM Revenue and Customs. But that is only a first step towards
reform.
Just as Lamey gets to grips with more profound changes such as
creating uniform and simplified business processes, which will
yield the biggest savings, his plans will probably be consigned to
history by ministerial announcements.
If private companies were run like governments, there would
probably be no mergers.
There must be cost cutting in central departments. The potential
savings are enormous. But it would be better to advance only the
basis of learning the lessons from trials in smaller departments
which adopt standardised, simplified systems and processes. This
has already worked successfully at the Crown Prosecution Service,
for example.
The successful reforms are likely to be those that ministers crow
about after they are achieved - not before.