HC Deb 19 June 1986 vol 99 cc1181-2
1. Mr. Cash

asked the Chancellor of the Exchequer what estimate he has of the scope for increasing value for money in public spending programmes.

The Chief Secretary to the Treasury (Mr. John MacGregor)

Improvements worth hundreds of millions of pounds a year have already been made, but there is still substantial scope for achieving more.

Mr. Cash

Does my right hon. Friend agree with the Audit Commission that about £1 billion worth of savings could be obtained in terms of increased value in public services by applying the Audit Commission's criteria? Will he congratulate the Mid-Staffordshire health authority, which, by applying new management techniques, has managed to save this year and for ensuing years more than £100,000 in revenue as a result of its techniques to improve the quality of public services in its area?

Mr. MacGregor

I confirm my hon. Friend's comments about the Audit Commission. It has identified possible savings of more than £1 billion a year since its studies in 1983, but my hon. Friend will know that that is in relation to local authority services. There is still substantial scope for better value for money and improvements in local authority spending through all the techniques that the Commission has suggested and which we are applying in central Government. The same principle applies in the Health Service and my hon. Friend is right to draw attention to the techniques that can be used at district and health authority level and throughout the Health Service. The same applies in central Government as a whole.

Mr. Alan Howarth

Does my right hon. Friend agree that public sector bureaucracies have a sponge-like capacity to absorb taxpayers' money, and that increases in funding are all too rarely matched by equivalent improvements in the quality of services delivered? Will he therefore undertake that if, in the coming weeks and months, any suggestions are made to him that there is a need for real increases in funding in particular Departments, he will ask searching questions to see whether the administrative systems in those Departments are as streamlined as they might be?

Mr. MacGregor

I assure my hon. Friend that I attach great importance to this, which is shown by the fact that in the last public expenditure White Paper there were more than 1,200 output measures and performance indicators. I intend to apply the same priority in the forthcoming public expenditure round. I hope my hon. Friend will recognise the considerable advances that we have already made. For example, in the machinery of government alone, by the rigorous application of various techniques, we are now producing savings of about £750 million a year.

Mr. Penhaligon

Will the Minister tell the House what persuades him not to invest money in the prevention of tax evasion when all the studies suggest that money invested in that way would recoup far more than is presently recouped?

Mr. MacGregor

I am glad to assure the hon. Gentleman that we have increased the resources to deal with tax evasion.

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