The government’s emphasis on making cash savings in efficiency programmes could lead to cuts in public services, a prominent former efficiency reviewer has told Civil Service World.

Sir Peter Gershon, who led the eponymous 2004 Treasury efficiency review, has said the government’s decision to exclude ‘non-cashable’ efficiencies – such as reductions in absenteeism – when considering departments’ progress towards efficiency targets risks pushing civil servants towards cuts in services.

“The government – for quite understandable reasons – in the 2007 spending review moved towards a ‘cashable savings only’ efficiency target,” Gershon said. “I think that does increase the risk of cuts in public services, because if non-cashable gains don’t count, why would people try and find them?”

Gershon said non-cashable savings should count towards overall targets, because – if genuinely achieved – they free up resources to be used in frontline services.

The former Office of Government Commerce boss, who is soon to become chairman of sugar giant Tate & Lyle, said that recent efficiencies had left public services mostly untouched, unlike the “slash and burn” cuts of the 1980s – but the dire state of the public finances makes things more difficult this time around.

Gershon said he supports the Treasury-led operational efficiency programme’s (OEP) focus on specific areas such as back office and procurement, but “trying to guide people to where the efficiencies can be made helps mitigate the risk [of service cuts]; it doesn’t eliminate it.”

Achieving the OEP savings, particularly in the current economic climate, requires firm leadership from politicians and civil service leaders, Gershon added. “Where you make the most progress with the efficiency agenda is when the political leader and the official leader are both clearly signed up,” he said. “If one of them is and one of them isn’t, you’ll make some progress, but not a lot – and if neither of them are, you are not going to make any progress at all.”

Read the full Peter Gershon interview in Civil Service World on July 15