A pledge by Gordon Brown to end a "culture of excess" in the public sector was overshadowed when four key government advisers on efficiency were recruited to work for the Conservative Party.
Sir Peter Gershon, whose efficiency drive in Whitehall helped identify savings of £26.5bn a year and Bernard Gray, a former Labour special adviser at the Ministry of Defence, who uncovered big overspends on defence procurement projects, were among them.
Mr Gray, who has resigned from the MoD, said: "Getting better value for money in public spending takes honesty and leadership, and is crucial to ensure that in these difficult times we get as much as possible out of every pound of taxpayers' money spent on our public services. I'm delighted to be helping the Conservatives as they have the opportunity to do just that."
The Tories trumpeted the "defectors" to its new Productivity Advisory Board as a sign of a change in the political tide and said they would help enable David Cameron's team to learn from Labour's mistakes. Other members include Lord Levene, a Whitehall efficiency adviser when the Tories were in power, and Martin Read, who led a Treasury review on savings from public sector back office and computer spending.
Ministers admitted that there are now 4,300 senior civil servants compared with 3,100 in the mid-1990s.
Mr Brown announced yesterday that the Government would "name and shame" public bodies which wasted money on excessive salaries, saying that some pay packages had "lost touch with the reality of people's lives".
He said: "It cannot be right that taxpayers fund 300 local authority officials who have salaries over £150,000 or that in total over 300 staff across public sector bodies are paid more than £200,000."
In future, he said, new public sector appointments with salaries above £150,000 would have to be approved by the Chief Treasury Secretary.
Mr Brown has ordered a review of senior public sector pay by Bill Cockburn, chairman of the Senior Salaries Review Body to report by next spring's Budget. He will consider whether the BBC should be included in the pay clampdown. He announced that the Government had found an extra £3bn of savings since April, including £1.3bn from streamlining central government, taking this year's figure to £12bn. They have promised a further £35bn savings by 2011. But there appeared to be confusion over the £12bn IT programme for the NHS. A day after the Chancellor Alistair Darling suggested it would not go ahead, the Health Secretary Andy Burnham told the Commons that he would save £600m by paring it back but said there was no intention of scrapping the scheme.
Philip Hammond, the shadow Chief Treasury Secretary, accused Labour of copying the Tories' ideas on savings. "Labour have had repeated efficiency drives over the last 12 years which have identified billions of pounds of potential savings," he said, "yet they have only achieved a fraction of the savings claimed. The truth is real public service reform is not in Labour's DNA."
The Liberal Democrats proposed a £400-a-year cap on public sector pay rises to save £4bn a year. "Public sector pay makes up a quarter of all public spending so any credible attempt to limit spending must include proposals on pay rises," said Vince Cable, the party's Treasury spokesman.