Sep 2009 11
  • Joint study lays out detailed proposals to save £50 billion a year of public spending
  • 32 specific measures offer savings of £42.5 billion from 2010-11, and a further 2 measures would save £7.5 billion from 2011-12

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.

As well as laying out how to make such sizeable savings, the report discusses the urgent need for reductions in public expenditure, and compares the behaviour of the public sector, which has continued to grow through the recession, to the widespread streamlining and improvement of efficiency that businesses have been forced to carry out in order to remain profitable or even to survive. Notably, the report does not rely on generalised efficiency savings, but on reducing or removing unproductive items of government expenditure that don’t work, or are not essential.
The report's authors also urge the Government to make its expenditure more transparent, in order to allow the IoD and the TPA, along with the rest of the British public, to identify further savings.
The full report can be read here (PDF).
Key Findings
The full programme of 34 proposed savings consists of:



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

Miles Templeman, Director General of the Institute of Directors, said:

"The UK is in the middle of a government debt crisis and our report sets out tangible proposals to cut the deficit.  Businesses are right now making savings and cutting back on costs to get through the recession, and there is no reason why the public sector should not have to do the same. Any cut in spending naturally has the potential for some pain, but our list shows that large sums can be saved without hurting vital services.  We hope this will start a serious public debate about the best ways money can be saved, and whether the state needs to withdraw from certain activities it can no longer afford.”

Matthew Elliott, Chief Executive of the TaxPayers' Alliance, said:

"Families and businesses have had to tighten their belts with the onset of the recession, so it is now time for the Government to follow suit. It is absolutely essential that public spending is reduced to rebalance the nation's finances. After years of simply spending more and assuming the taxpayer will pick up the bill, the situation has changed. These proposals offer practical, reasonable ways to save large amounts of money and politicians in Westminster would do well to take them on board. Taxpayers cannot afford to sustain the current rate of spending, and they want to see an end to their money being spent unwisely."

  • Daniel Anderson

    OK let’s get this clear: One year freeze on basic state pension and minimum income guarantee?; stop paying benefits to those who don’t need them(?!); abolish child benefit and child trust fund?; targeted funding on free bus passes to elderly?; abolish free licences etc?.
    Sorry, where is the land tax that wil hit the wealthy in proportion to what they own? Where is the maximum wage legislation, the banning of city bonuses – that will prevent the abuses? Let’s be clear the city doesn’t generate any wealth, that is the role of local businesses, all they do is create tons of phoney money, and with it we have built an economy around it. They then walk away and leave everybody else to pick up the pieces.
    And what about the abuses of those like the management of Rover Group who milked the system for their own benefit and screwed their 6,500 workers out of their pensions in the process? What about a retroactive tax on the £42m, which benefited 5 people?!
    What about capping MPs wages and expenses, and banning them from outside interests, which is completely unethical anyway. If, like Alan Duncun, they don’t like it they can resign and let others do the job.
    As to your proposals for cutting general government spending, this will only lead to them cutting lower level staff and salaries, whilst maintaining the high levels at the top. Fundamentally your flaw here is to assume that they would rationally apply reductions fairly. they won’t.
    No instead, you have come up with an awful and pernicious set of options, which will hit the poor – don’t give me this rubbish about means-tested benefits – since all this does is hit the vast majority of ordinary people. It is simply a neo-liberal charter for ensuring the richest get even richer and the vast majority – the middle classes – get poorer.
    Frankly neither left nor right have any answers to this mess. The system is what is wrong. We need to break it up and start all over again, which given that the system is likely to collapse anyway, irrespective of what anybody does, might come soon enough.

  • Andrew Fish

    Daniel, let me put it politely: you’re an idiot. Like the TUC you miss the point of the public sector, which is not to provide jobs, but to service the needs of the larger public as cheaply and efficiently as is realistically possible. Labour have long used increasing public sector spending to mask the real state of our economy – creating non-jobs to hide employment, dressing up increasing debt as growth. Inevitably, in a crunch the strategy has unravelled. It needs to be cut back or the tax burden will strangle the private sector and cripple any hope of recovery.
    Similarly, to dismiss the output of the city as phoney money is to cast aside centuries of economic development. Finance is, and has long been, about a larger supply of wealth than is backed by physical capital. It was the invention of the bond market that allowed the existence of the British Empire, giving a small nation the ability to punch vastly above its weight. And, whilst the seemingly bizarre SIVs and CDOs may seem like so much smoke and mirrors, they have been part of the engine of growth that has allowed a great deal of capital spending over the last decade.
    Finally, your envy-driven suggestions for redressing what you see as the balance are gesture politics of the worst kind. Just how much of our vast deficit do you think we could save by capping the wages and expenses of a few hundred MPs? What do you suppose would happen to the rents of tenant farmers or poor households in rental accommodation if landowners suddenly found themselves faced with a tax on their holdings? What does a windfall tax on £42m actually achieve? I doubt a penny of it would go to help the 6,500 workers. Besides, if you want to go after someone who has savaged pension funds for their own gain, I’d have started with Gordon Brown.
    In the end I don’t agree with everything the TPA suggest in their article – for one thing I see tax credits as an iniquitous way to force people to beg for their own money – I do think they are singularly effective at identifying government waste. And it is waste we need to be tackling now, whether that is the legion of people employed in the public sector to provide spin about targets or the vast amount of money given to private companies through PFI. Waste must be cut, because if we don’t reduce the deficit burden through cuts in spending, it will be the poor people who carry the bulk of the cost through increased taxes.

  • An actual taxpayer who thinks the TPA talk rubbish

    “Daniel, let me put it politely: you’re an idiot.”
    Calling someone an idiot isn’t being polite, regardless of whether you put “let me put it politely” in front of it or not.
    And what about this?
    The “TaxPayers’” Alliance are against it, despite it saving taxpayers’ money. When government spending reductions clash with Tory ideology, you side with the latter. Noted.
    Putting it politely, you’re a bunch of lying shitbags.

  • Andrew Fish

    How are the TPA lying? In brute force terms they tell us, the taxpayers, how the government is spending our money. Unless their figures are falsified then they are telling the truth. If they then make value judgements about specific spending then that is opinion rather than fact, but what is government policy if not an opinion of how the country should be run? At least in getting the figures out there the TPA does the voter a service. We don’t, after all, have to swallow their line whole.
    Where politeness is concerned, what we certainly don’t need in the current debate is an argument driven by envy and revenge. Soaking bankers and MPs might make good headlines, but it both oversimplifies the problem and deflects the debate from a genuine attempt to get at the solution. With the unions threatening strike action to protect any and all public sector jobs and Labour trying to characterise all spending as investment there is a danger that the Conservatives may be forced to compensate by going in the other direction. That would then drag us into a 1970′s style ideological schism, forcing politics out to the same extremes as a generation ago with all the financial ramifications that entails. I don’t know about you, but I lived through the late seventies and early eighties and would rather not go back to them. Describing as an idiot someone who sounds ready to stoke the embers of class warfare based on a scarcely considered sense of injustice seems fairly polite under those circumstances.

  • An actual taxpayer who thinks the TPA talk rubbish

    The TPA are dishonest in that they claim to represent the ordinary public and exist purely to push for less, or more efficient, government spending, but are actually a PR campaign for business leaders, with links to the Conservative party, who exist to push loony-right neoliberal fundamentalism in the name of cutting tax (for the wealthy) except (as the heroin treatment story shows) when this is in conflict with the Conservative social values of their sponsors.
    “Where politeness is concerned, what we certainly don’t need in the current debate is an argument driven by envy and revenge.”
    And *none* of, say, the TPA’s regular calls for the freezing of benefits or their demands that public sector workers be made to wear sackcloth and ashes are in any way driven by envy, or an attempt to harness imagined envy (of “scroungers” or “cushy jobs”) among the public?
    “there is a danger that the Conservatives may be forced to compensate by going in the other direction.
    That’s precisely what the people behind the TPA want to happen, and why they pretend to represent ordinary tax payers while pressuring the Conservatives from the right – so why are you standing up for them?
    “stoke the embers of class warfare”
    It appears that class warfare is already taking place, but the ruling class are the only ones on the offensive, with the likes of the TaxPayers’ Alliance acting as their foot soldiers. A bit of militancy from Britain’s weak and demoralised Trade Union movement might provide a bit of balance against the flood of hard-right propaganda provided by the likes of the TPA.

  • Andrew Fish

    Lying about facts is somewhat different from misrepresenting the reasons for doing it. I don’t pretend to know exactly what the TPAs agenda is (and I suspect you don’t either) but generally I think exposing what particular aspects of government cost is a good thing. When politicians talk glibly about protecting a department or a pet project it helps if someone gives us the figures. Governments generally only tell us what something costs when they axe it and claim the saving. With the figures the TPA publish we have a more complete picture than government would wish and that has to be a good thing. Beyond that I neither know nor care what agenda the organisation has because, like the TUC, they aren’t running the country.
    Looking at the figures above, I don’t see anything that can be considered class warfare. Both major parties are talking about cutting benefits to the middle-classes. That seems sensible enough as long as the cost of means testing doesn’t outweigh the saving made (you’d hope not, but you never know). By contrast, the short-term capital gains from cutting projects such as Eurofighter and ID cards will have very little effect – something you wouldn’t know from the grandstanding of the Lib Dems.
    A public sector pay freeze may sound like ‘sackcloth and ashes’ as you describe it, but it’s no worse than many low-paid private sector workers have already had to swallow and, with the CPI negative and RPI at a mere 1.4%, it’s a lot less pain than it sounds. Figures for trimming down the civil service are a bit ‘finger in the air’ for my liking – I’d prefer that we go for a root and branch review and sort the jobs from the non-jobs – but at least we have some understanding of the potential savings to be had.
    There are other figures in there I admit to be contentious: SureStart, building schools for the future – these are policies that Labour claim have helped a great many people. But this is the same government who trumpeted a mortgage protection scheme that prevented only a handful of families from losing their homes. I’ve no doubt there are people out there who would claim SureStart changed their lives, but they couldn’t for certain claim that their lives wouldn’t have changed anyway. It’s like the recent NHS debate: hundreds of people have gone up on Twitter to say that the NHS saved their lives, but are they really saying that a different system would have killed them? These issues are too complex for such superficial emotive arguments.
    Labour have, for some months, been pretending that everything will be alright if we just let them keep spending money. It’s an obvious political ploy, selling the country down the river in the hope of a success at the ballot box. Unfortunately for them (and perhaps fortunately for us) it has unravelled. There are, we know, huge problems with our economy. We cannot sustain our current levels of public sector spending and simultaneously draw down our debt; we cannot continue to spend billions on an increasing welfare bill and just hope the problem solves itself. But neither can we believe there is some magic bullet that can take out non-vital spending without some people rich and poor suffering. Even if, as Niall Ferguson seems to suggest, China are buying foreign currencies to distort the market for their goods (thus meaning QE won’t lead to inflation) it would be an extremely brave government who relied on that to produce the wealth needed to keep our economy afloat. We need, at least for now, a period of retrenchment. The debate then should not be about who deserves to suffer in that period, but what things cost and what we can afford to do without. You wouldn’t, after all, decide on savings in your household budget based on which shops or utilities deserved your money more.

  • Angelina

    Lovely thinking TaxPayers Alliance Directors – but where are your thoughts about the real trickle of our cash – out the back door into the swag bags of the Big Banks and played in the killing fields of international high finance? John Sweeney’s Panorama programme last night EXPOSED far more than you are….he fronted up to Mandelson who looked absolutely caught in the headlights and was so visibly shaken and weak he had to slink off unable to answer! When you doorstep politicians like Sweeney, when you collate ALL the information on the MASS corruption of our country, its laws and loopholes (for the rich/Banking world/offshore dwellers) THEN people might join you. I did – but see no progress — my thoughts sometimes drift into questioning the reason for your existence – SWEENEY POWER! Intelligent research and brave, intelligent presentation and questioning! Bravo. With evidence like that presented on tv yesterday, why oh why are we still paying any taxes down here at grass roots?!

  • Trevor Jones

    Another tax saving measure that could be implemented quickly is to take away the tax benefit given to commercial private hospitals that are for reasons of history, registered as charities. Some charity hospitals give back to society to more than compensate for the tax benefits they receive by funding hospices, for example.
    But major players like the London Clinic (currently investing millions of punds in a new cancer treatment centre for private not NHS patients) and the Nuffield Group (who also own fitness clubs) receive tax subsidies of around £30 million a year and deliver virtually no public benefit. They simply compete with commercial private hospitals, charge the same price to insurers, individuals and the NHS to treat patients, pay their directors handsomely and generally use our taxes to subsidise their business.

  • Christian Haselwimmer

    I don’t see any mention of closing tax loopholes on this list.