Conservatives outline £12bn public sector savings plan

The Tories have outlined for the first time how public spending could be cut by £12bn - to help fund their pledge to curb the rise in National Insurance.

Tory adviser Sir Peter Gershon said spending on IT projects, office costs, contracts and recruitment could be cut.

Conservative leader David Cameron said it showed the savings, which Labour say are a "fantasy", were "deliverable".

Asked if it could mean 40,000 public jobs lost, he said hiring freezes, not job cuts, would be used to save money.

In Friday's other election developments:

• Lib Dem leader Nick Clegg says his party would stop excessive bank charges for people who go overdrawn
• Labour's Lord Adonis makes a bid for Lib Dem voters' support
• Facebook and the Electoral Commission team up to register voters
• A Labour candidate is sacked for "offensive" comments about Nick Clegg and David Cameron on his Twitter page
• Gordon Brown campaigns alongside the mother of a murder victim whose killer was caught thanks to the DNA database

'Back of envelope'

Gordon Brown, Alistair Darling and Lord Mandelson launched a fierce attack on Conservative claims they could save £12bn through "efficiency savings" within a year of the election - suggesting they were based on "back-of-envelope" calculations.

Sir Peter, a former government adviser now leading the Tories' efficiency review, told the Financial Times that £9.5bn could be saved from cutting IT costs, renegotiating contracts as well as curbing consultants and "perhaps £1bn to £2bn" could be saved by curbing recruitment.

Conservative leader Mr Cameron told BBC Radio 4's Today programme: "It is do-able, it is deliverable, I don't think it's particularly challenging to ask government to save £1 out of every £100 it spends.

Mr Cameron was asked about suggestions the plans could mean job losses of up to 40,000.

He said: "It's not talking about people losing their jobs, it's talking about not filling vacancies as they arise."

He said Sir Peter had outlined areas that could be cut - but a Tory government would make changes "along the lines of" what he had suggested, in consultation with the Treasury.

'Back office'

"The exact balance between things like procurement, recruitment and IT should be decided calmly and reasonably with the Treasury if we are elected on 6 May."

He said about 400,000 jobs became available in the public sector each year as people leave: "The point is, if you don't fill all jobs as they become available, that's one way of saving money relatively rapidly."

He said not replacing "back office" and management jobs meant more money could be saved for the front line and denied it was a "plan to fire people".

Gordon Brown has dismissed the Conservatives' plans to save £12bn as built on a "myth" and Chancellor Alistair Darling said some of the savings had already been made by the government.

Mr Darling added: "It is now clear from [David Cameron's] interview on Today - and he was unable to deny this - that additional heavy cuts will have to be made in public sector spending and jobs from this year onwards and that tens of thousands of jobs will be lost, not just in the public sector but in the private sector as well, where they depend on government contracts."

He told the BBC: "They may have got the political tactics right for the first day or so but their overall judgement is just plain wrong."

'Salami slicing'

Lib Dem Treasury spokesman Vince Cable said it appeared Sir Peter Gershon was "looking to immediately slash employment throughout the public sector".

He said: "The Tories are guilty of the worst type of salami slicing - cutting with no regard for what is useful or wasteful spending."

On Friday the Tories are outlining plans to curb excessive public sector pay and to strip some payments from those repeatedly caught committing benefit fraud.

The Lib Dems have pledged to stop banks charging customers unfairly for going over their limit or bouncing a cheque and capping interest rates charged by credit cards and store cards.

And Labour are highlighting the role of the DNA database - the Tories oppose keeping the DNA of people arrested for minor offences but not charged.

Joined by the mother of murdered model Sally Ann Bowman, whose killer was caught after his DNA was taken during a pub brawl, Gordon Brown said: "The use of DNA helps the police put the most dangerous criminals behind bars but can also exonerate the innocent."