Alistair Darling plans to shave tens of billions of pounds off the biggest public expenditure programmes by cracking down on inefficient building and procurement practices.

In addition, more than 80,000 extra jobs could be lost in central government over the next three years as all departments eke out administrative savings of 5 per cent.

Trade union leaders reacted furiously to the disclosure that the Chancellor is looking for further Whitehall cutbacks from 2011 and will look to the private sector for ideas. Brendan Barber, General Secretary of the TUC, said: “There is more bad news for public servants in the small print. There will be an additional round of cuts after the current CSR [Comprehensive Spending Review] round to be announced this year.”

Mr Darling has asked Yvette Cooper, Chief Secretary to the Treasury, to scrutinise road building, regeneration, IT projects and drug purchasing insisting “spending must be matched with reform”.

Rose-tinted specs fail to offer hope

The obvious justification for Mr Darling’s relatively upbeat scenario is that the outlook is fraught with uncertainty

Background

• Darling's first Budget: the main points

• The Chancellor's speech in full

• Darlings first Budget: the reaction

• Chancellor hits the home budget as his debts soar

• Need to know: Budget 2008

The Chancellor delivers a modest Budget

As so often is the case, virtue, in terms of improving public finances, is not now, but at least a year away

Multimedia

• Video sketch: Matthew Parris and Ann Treneman

• Eco-worrier: should we be pleased?

• Green Central: round-up of the green Budget measures

Multimedia

• Red Box: a list of Darling's new enemies

• The winners and losers

• Video: the 'fingers crossed' budget

The Public Value Programme, to cover the next 10 to 15 years, will be on top of the £30 billion efficiency savings across the public sector announced in the Comprehensive Spending Review for the next three years.

Top of the list is the Government’s IT programme, in which billions of pounds have been wasted as errors have occurred or systems have been revised. These include systems at the Child Support Agency, Passport Agency and significant teething problems with the new NHS patients’ database. A new IT unit with a dozen specialists is to be set up in the Treasury or the Office of Government Commerce (OGC) to oversee all projects.

The Chancellor disclosed that efficiency savings worth £30 billion had been identified across the public sector with details expected this summer. Job losses of up to 100,000 across the public sector are expected to be announced on top of the 84,000 job cuts set as a target by Sir Peter Gershon, the former head of the OGC, to save £20 billion over the past three years.

The Treasury insists that £23 billion has already been saved and the Gershon cuts have been achieved. But unions claimed last night that the continual drive to cut costs was bound to lead to poorer-quality services.

The National Audit Office has also criticised the Government’s efficiency programme, arguing that 74 per cent of the savings made were unreliable. An NAO report last year said there was also a real possibility that some of the reported savings did not represent genuine efficiency improvements because they led to a deterioration in services.

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