Government reports £16bn in departmental savings and efficiencies, more than doubling its target
Whitehall departments reported £16 billion in efficiencies and savings for 2025-26 — more than double the 2% target set at Autumn Budget 2024 — with the NHS the biggest contributor.
UK government departments reported £16 billion in efficiencies and savings in the 2025-26 financial year, more than doubling the 2 per cent target set at Autumn Budget 2024. The total equates to 4.1 per cent of Resource Departmental Expenditure Limit (RDEL) — the government’s day-to-day spending. GOV.UK
The Treasury said the figure comprised £9.192 billion in efficiencies and £7.231 billion in savings. The Department of Health and Social Care was the largest contributor, reporting £6.355 billion in efficiencies and £3.993 billion in savings — 5.2 per cent on the same RDEL basis — driven by NHS performance improvements. GOV.UK
The government pointed to AI-assisted chest X-ray analysis supporting faster diagnoses for more than 4 million patients, an AI lesson-planning tool for teachers saving around three hours a week, and HMRC’s “Ask HMRC” digital assistant, which handled 6.3 million interactions in 2024/25 and freed roughly 400 staff. HMRC technology costs of about £26 million and £42 million in communications and marketing controls were among the cited examples. GOV.UK
There is a caveat: departments supplied the figures themselves, which the Treasury reviewed with finance teams, and the National Audit Office has not independently audited them. The Treasury acknowledged departments may have applied the framework differently in its first year. GOV.UK
“A central part of that is making sure we are a government that spends every pound with purpose,” said Chancellor John Healey. “At my first Budget on 28 October, I will build on this work so we can provide breathing space for today, and hope for the future.” GOV.UK
The announcement followed a letter from the Prime Minister and the Chancellor urging Cabinet ministers to reprioritise spending ahead of the Budget, with Healey under pressure to rebuild fiscal headroom — a Reuters poll last week suggested the Chancellor may need to rebuild £15–16 billion of headroom. Reuters
Read next: Healey rules out capital gains tax rise · Burnham tells Stormont ministers to set a budget · more in the UK politics hub.
More on this topic: all UK Broadband stories
