"We mustn't waste this opportunity,' said a senior civil servant to colleagues at a meeting I attended last week. The big cuts in public spending, he added, mean that "we don't have the option of carrying on as we were". Government departments, he argued, will now be forced to overcome daunting barriers to improving efficiency. The new motto should be "better for less".
There were perhaps 100 civil servants in the room. Their mood was very positive. And in his statement, Mr. Osborne more or less met their desire to re-think what they are doing. "The Spending Review," he said, "is underpinned by a far-reaching programme of public service reform." But even so, can the Whitehall machine, however reform-minded it might be now, possibly deliver "better for less"?
The first requirement, it almost goes without saying, is leadership. Apart from a wobble at conference, the Prime Minister and his Chancellor have been admirably clear and consistent in describing their plans. Following the bargaining between the Treasury and departments, the spending totals have come out as intended. Yet there is a flaw in their presentation. Part of it simply isn't true.When Mr. Osborne referred to "the financial catastrophe that happened under the previous Government", he spoke as if the banking crisis had never happened. Telling the truth is part of leadership.
Moreover, leadership in government is not just a No. 10 Downing Street thing. In carrying through the spending cuts, the most important players should be the Secretaries of State. It was a fault of the previous government that they became merely the puppets of the PM of the day. Now they give the appearance of having real power. Or, at least they do so far as the unpopular aspects of leadership are concerned. The extensive redundancies that are inevitable will be, said Mr. Osborne, up to the decisions of individual public sector chiefs. On the other hand, the Cabinet Office and the Treasury will oversee the programme of Whitehall savings. There is a tension here.
Furthermore if the cuts are to be handled sensitively and "better for less" achieved, decision-making has to be pushed as close to the beneficiaries or consumers of pubic services as possible. To give the Coalition its due, this has been a consistent theme in its thinking. Thus power is to pass from health authorities to GPs and from local authorities to head teachers and locally-elected police and crime commissioners.
Now a further step is being taken. Local authorities themselves are to be cut loose from overbearing central control.
To help, the Chancellor said he proposed a massive devolution of financial control. Protecting all local government revenue grants will end from April next year. Outside of schools, police and the fire service, the number of separate core grants that go to local authorities will be reduced from over 90 to fewer than 10.
For if, as the auditing firm KPMG predicts, the spending cuts will severely test the financial viability of some councils, then they will need to be ruthless in urgently deciding on frontline priorities and ending the delivery less critical services.
To do this effectively requires freedom to manage in line with local needs. But the public service reform about which the Chancellor spoke is more than becoming more efficient. It goes wider than pushing power down the chain of command.
In a tantalising phrase, Mr. Osborne said that "we should understand that all the services paid for by government do not have to be delivered by government". In fact, disappointingly, he didn't say a lot more about this, other than mentioning the Ministry of Justice's experiments in contracting with voluntary and private sector providers to reduce re-offending by prisoners after their release. This is done on a payment-by-results basis.
Yet outsourcing the provision of public services to community groups of various kinds or to public sector workers who transform themselves into self-governing mutual organisations is a promising development.
Charities, too, could more often become leading providers. Outsourcing doesn't have to be limited to commercial firms, though many of them are excellent.
One of the senior civil servants at the meeting I went to last week also mused about transparency. He was reflecting on the fact we are suddenly being given vast amounts of information about civil service pay, the number of civil servants who earn more than the Prime Minister, where they work, their expenses and so on. Yet as an insider said approvingly: "Transparency creates pressure on people to behave differently."
If that really is the mood in Whitehall, then perhaps it will prove possible after all to deliver better for less.