a. Ministry of Defence

The Secretary of State for Defence has announced a full review of how the Ministry of Defence is run and of potential reforms to the Armed Forces. He is establishing a Defence Reform Unit that will lead in the reorganisation of the Ministry of Defence into three 'strategic pillars', as well as commissioning the first major Strategic Defence and Security Review for over a decade.

The strategic element of the review is a timely re-appraisal of the UK's security requirements. But the Secretary of State was clear that both this and the wider reform proposals are predominantly motivated by the need to save substantial sums from the current defence budget.

b. Spending Challenge

The Treasury has published on its Spending Challenge some 44,000 ideas for saving public money that were proposed by members of the public. It is now inviting the public to rate them.

c. NHS Consultants' Pay Rewards

In the last financial year, the NHS spent over £200 million on bonus payments to NHS consultants in the form of what are known as 'Clinical Excellent and Distinction Awards'. The Department of Health has announced a UK-wide review of the awards with a view to assessing whether the scheme, which has been largely unchanged since its establishment in 1948, remains fair and affordable.

d. Energy Waste

The Coalition is beginning the process of publishing real time data about public sector energy consumption, beginning with the 18 departmental headquarters in Whitehall, in order to create a culture of transparency and reduce waste. The total cost of energy usage across the public sector estate was £2.6 billion in 2008-2009.

e. Efficiency and Reform Group

John Collington, the Home Office's Group Commercial Director, will become the new head of procurement in the Efficiency and Reform Group. He will spearhead a new cross-government approach to procurement, allowing government to use its scale to ensure it always gets the best value for money.

f. External Efficiency Review

Sir Philip Green, who runs the UK's largest privately family owned clothing retailer Arcadia Group, has been asked by the Prime Minister to lead an external Efficiency Review into government spending.

g. High Speed 2 - Exceptional Hardship Scheme

The Coalition has opened for applications the exceptional hardship scheme for those who are most adversely affected by the proposed High Speed 2 rail line between London and Birmingham and wish to apply for financial compensation. This contains the clear implication that it remains committed to the future of the line.

Our comment:

The Coalition continues to seek ways, large and small, to save money and tackle the deficit. In truth, all of the measures spoken of at the moment amount to something of a phony war, prior to the major announcements that will be made when the Spending Review concludes on 20 October 2010.

Nonetheless, two big themes have emerged. The first is the substantial structural change that is likely to be required in the 'big spending' departments - of which the Ministry of Defence (MoD) is a classic example - in order to function effectively on a substantially reduced budget. How painful this is likely to be for the MoD depends in part on whether any replacement for the Trident nuclear deterrent is (as it has been in the past) separately funded, or whether it is required to be financed from the departmental budget, requiring tough choices to be made about the value of the deterrent when compared with conventional forces.

The second theme is the likelihood of an increasing tendency towards cross-department procurement of goods and services used across all of government. Traditionally, the effect of schemes to save money by utilising the volume purchasing capacity of the government as a whole have had limited take-up. But the issue was the first to be highlighted by Sir Philip Green on his appointment to lead an external Efficiency Review - he compared the current approach each store within the Arcadia Group buying its own clothes, implying that it was simply bad commercial practice - and is also the subject of a new function within the Efficiency and Reform Group. It seems likely that the Coalition will approach this issue with fairly serious intent.

Conversely, the Coalition's Spending Challenge website seems more an exercise in being able to say that the public has been consulted than a genuine attempt to locate good ideas. Indeed, if good ideas are as hard to find as they are in the 44,000 suggestions currently made, departments will have a really unenviable task in responding to the Spending Review. More likely, the British public has responded to the Challenge with its collective tongue in cheek, which is perhaps no bad thing. Among the suggestions made are sending young offenders to Eton (allegedly cheaper), connecting prison exercise bikes to the National Grid (both healthy and climate change friendly) and the inevitable 'scrap this website'.