UK government departments reported about £16 billion in efficiencies and savings for fiscal 2025-26, exceeding a budget target as National Health Service (NHS) performance drove much of the result, HM Treasury (HMT) said.
The government announced a 2% efficiency, savings and productivity target at Autumn Budget 2024. The reported total equaled 4.1% of the Autumn Budget 2024 Resource Departmental Expenditure Limit (RDEL), excluding depreciation and Official Development Assistance (ODA).
The Department of Health and Social Care (DHSC) reported £6.355 billion in efficiencies and £3.993 billion in savings. Together, those amounts represented 5.2% on the same RDEL basis. HMT identified NHS performance as a main driver of the overall result.
Across departments, HMT classified £9.192 billion as efficiencies and £7.231 billion as savings. Under its framework, efficiency means spending less while delivering the same or more output, or delivering more output for the same spending. Planned spending reductions unrelated to efficiency improvements fall into the savings category.
Those reductions can result from lower demand, policy changes or the cancellation of planned spending. Some efficiency gains have a monetary value without directly reducing cash spending.
HMT cited about £26 million in efficiencies from changes to HM Revenue and Customs (HMRC) technology costs. It also reported about £42 million from tighter controls on government communications and marketing spending.
Departments supplied the figures, which HMT reviewed with their finance teams. The National Audit Office (NAO) has not independently audited them. HMT said departments may have applied the reporting framework differently in its first year.
HMT described the publication as a one-time statistical release. Large ministerial departments are expected to show their performance against efficiency targets in their annual reports and accounts for 2026-27.
