Budget: Plan for £9bn in efficiency savings

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The Chancellor announced plans to make £9 billion worth of efficiency savings a year by 2013/14 while continuing to invest in public services.

Alistair Darling said he had been seeking to find an additional £5 billion of efficiency savings in 2010-11, on top of a total of £30 billion in the current spending review period.

"Some have argued that we should cut public services immediately, rather than invest and grow our way out of the recession. That would be the wrong thing to do.

"I can confirm that we are able to secure these savings that year, while increasing investment, as planned, for local health services by over 5% and for schools by over 4%."

Reports from five independent reviews Mr Darling set up last year had identified extra efficiencies from 2011 which rise to a further £9 billion of additional savings a year by 2013-14, Mr Darling told the Commons.

Unions have been pressing the Government not to cut public spending because of the recession and were anxiously waiting for further details of the efficiency savings.

Labour MP John McDonnell said: "Buried in this Budget is a programme of public expenditure cuts and privatisations never seen before in the history of this country.

"It means the Government is pressing ahead with the sale of Royal Mail in the face of massive public opposition. This programme of cuts and privatisation will be made worse when the Chancellor's unsustainable growth predictions are exposed.

"Cutting and privatising jobs in the public sector will simply put more people on the dole, and runs counter to the Government's overall approach of stimulating the economy."