Brown to detail plan to slash £20bn from public spending

Gordon Brown will publish details on Monday of his plans to squeeze £20bn out of public sector bureaucracy in a move aimed at showing his three-year spending plans can be achieved without the need for further tax hikes.

Gordon Brown will publish details on Monday of his plans to squeeze £20bn out of public sector bureaucracy in a move aimed at showing his three-year spending plans can be achieved without the need for further tax hikes.

The Chancellor will unveil the report by Sir Peter Gershon as part of the long-awaited comprehensive spending review detailing cash allocations to government departments up to 2008.

The report is expected to give a more detailed breakdown of cost savings across Whitehall including job cuts and savings through better use of technology and improved procurement.

The Chancellor will use the report to show the Government has fully thought out plans to trim Government savings and is expected to attack proposals by the Conservatives to trim billions extra as "nebulous".

But the report is likely to be greeted with hostility by trade unions, who have threatened industrial action over compulsory redundancies, and by busi- ness leaders, who are sceptical that ministers will be able to force public sector managers to adopt more efficient working practices.

The Chancellor has set a target to improve public service efficiency by 2.5 per cent a year for three years next April and has already announced 80,000 job losses. The Gershon report is expected to identify means of achieving this including increased sharing of purchasing arrangements, streamlined back office operations and reduced transaction costs.

Robert Chote, director of the Institute for Fiscal Studies, said: "There remains an open question of whether any of these savings is actually deliverable."

The Chartered Institute of Purchasing and Supply (CIPS), said the efficiency review was "misguided" if it believed that it would increase efficiency simply by slashing the number of public sector procurement staff. "Highly skilled procurement staff are essential to the public sector," said Ken James, chief executive of CIPS.

The CSR will set out the battleground over which much of the expected general election campaign next year will be fought. The Government plans to raise total public spending to £579bn by 2008 from £488bn in the current financial year.

Although the growth rate is slower than the previous spending round, the Chancellor has allocated huge increases of 7.1 per cent for the NHS and 3.9 per cent for education.