Whitehall finds pounds 50m to save for Labour in power

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Civil servants in one Whitehall department have already identified pounds 50m in savings to fulfil Labour pledges as part of the party's preparations for government.

Stephen Dorrell, the Secretary of State for Health, has ridiculed Labour's plans for saving pounds 100m from bureaucracy in the National Health Service to spend on improved care. But his own civil servants have privately informed Chris Smith, Labour's spokesman for health, that they are well on the way to achieving the pledge, and have identified at least pounds 50m in savings so far.

The disclosure underlines the extent to which Whitehall is preparing for a Labour government, in spite of warnings by Tony Blair, the Labour leader, to his MPs not to take victory for granted.

In a further move to demonstrate its determination to prepare for government, theLabour front bench last night performed a U-turn by refusing to support a Labour back-bench move to cut VAT on energy-saving materials. A similar move was supported by the Labour Party last week and was narrowly defeated by the Government. Last night, the left-wing Campaign Group, led by Alan Simpson and Tony Benn, tried again, with the support of the Liberal Democrats, Ulster Unionists, Plaid Cymru and the SNP.

It was left to Dawn Primarolo, a Labour treasury spokeswoman, and fellow member of the Campaign Group, to urge Labour MPs not to support the measure. Facing sniping from the smaller parties and from Tory MPs, she said: "We are trying to get a system that is workable as opposed to scoring points against Labour's front bench."

She told Mr Simpson that he had "lost sight" of his objectives - to help the poor. Michael Jack, the Treasury minister, supported the Labour front bench in attacking the plan, which he said could cost more than pounds 100m. Despite behind-the-scenes pressure on Labour MPs not to support the left-wing proposals,about 15 defied the front-bench order to abstain. The move was defeated by 241 votes to 58.

Meanwhile, in spite of the warning by Mr Blair not to take a general- election victory for granted, Labour's spokesman on Scottish affairs, George Robertson, has told the NHS trusts running hospitals in Scotland to "start immediate consultations" on reducing their numbers from 45 to 25 to save pounds 30m.

Michael Forsyth, the Secretary of State for Scotland, accused Labour of "arrogance of enormous proportions". Mr Forsyth has asked his officials to work out how many people they would need to sack to save pounds 30m.

n Members of the North and Mid-Hampshire Health Authority could be sacked for approving the sudden move of five elderly people into a nursing home - in order to close a ward at Park Prewett Hospital, Hampshire - against the advice of the doctor in charge, writes Annabel Ferriman. Three of the patients died within three weeks of the move.