Damning report shows big tax cuts are possible say Lib Dems

6.59.47pm GMT Thu 8th Jan 2009

To demonstrate that money can be found for a 4 pence cut in income tax local Liberal Democrats are highlighting a damning National Audit Office (NAO) report into the management of Government service contracts published just before the Christmas holiday.

The NAO concluded that: "Nearly all the organisations we surveyed thought that value for money could be improved through better contract management, in terms of more or better services, and/or lower costs."

For example the NAO found the Foreign and Commonwealth Office's £23 million a year contract for travel services had no formal performance measures such as service level agreements or key performance indicators.

The NAO also found that 37 per cent of contracts did not have a risk register and 56 per cent did not have a contingency plan in case of supplier failure.

One of those assessed was the Driving Standards Agency's contract for driving theory tests where the US contractor had lost the personal information of thousands of test applicants.

Jonathan Chatfield the Liberal Democrat's Parliamentary spokesperson for South East Cambridgeshire said:

"You can't help but think they wanted this damning report buried by the Christmas holiday news.

"The NAO made an estimate that better contract management could potentially generate at the very least efficiency savings of between £160 million and £290 million a year across the organisations it surveyed through reduced contract expenditure.

"We believe we can cut income tax by 4 pence in the pound by finding £20 billion worth of Government savings which would give the economy a much bigger boost than the failed VAT reduction and the gimmick of tax relief on savings.

"Every day new evidence such as this NAO report comes to light showing the Government is wasting hundreds of millions of pounds of our money while, as a previous study into import duties showed, on the other side of the coin millions aren't being collected in tax revenues.

"By tackling the waste, cutting the big ticket items such as the £11 billion ID card scheme and closing the tax loopholes, contrary to what Labour and the Tories say we are confident that £20 billion is well achievable without cuts to essential public services."