UK Treasury to review wasteful spending by Whitehall departments

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The Treasury will ask UK government departments to cooperate better to cut wasteful spending in areas ranging from NHS treatment to building maintenance.

James Murray, Chief Secretary to the Treasury, will launch a series of reviews of government spending with the aim of finding efficiencies by improving the way money flows across UK government departments.

External experts will be used to help Murray assess areas where government initiatives can be further integrated, with a view to reallocating funding in next year’s spending review.

NHS efforts to move healthcare out of hospitals is one of four areas selected for review, along with homelessness, youth services and infrastructure management. Officials said these areas offer the greatest potential for finding better ways to spend public money.

“These reviews will examine government programs to ensure they are improving people’s lives while rooting out wasteful public sector spending,” Murray said.

“We have a duty to taxpayers to ensure that every pound of their money works as hard for the government as the people who earn it.”

The government’s ten-year plan for the NHS, published last year, promised to move more care from hospitals to local clinics, a long-term health service goal that has had only patchy success. Murray aims to find ways to better link local services such as mental health and social care to offer patients alternatives to hospitals, which currently absorb most of England’s £196bn NHS budget.

In the Homelessness Strategy published before Christmas, ministers criticized how £3.7bn a year is spent on homelessness in England. The strategy described a “crisis cycle” that saw the costs of temporary accommodation double in two years, while services needed to keep people in their homes were cut.

It is estimated that more than 380,000 people in England are homeless, most of them living in temporary accommodation, which can cost councils up to £30,000 a year per household. More than 4,600 people were sleeping rough on the last night surveyed by the government in 2024.

Ligia Teixeira, chief executive of the Homelessness Impact Centre, welcomed the review, saying that “a value-for-money approach that takes a whole-system view can help shift investment upstream”.

“The evidence is clear that the current system pushes spending towards delayed responses to crises, particularly temporary housing, which is expensive and leads to poor outcomes over time,” she said. “The solution is not to weaken protections or reduce access to temporary housing, but to redesign the system so that fewer people need it in the first place.”

Murray will look at how other public services, including the NHS, police and job centres, can do more to prevent people becoming homeless.

The Treasury also sees £1 billion spent annually on providing for young people’s needs, including youth clubs and sports, as too fragmented across multiple departments. It wants departments to make more long-term decisions about maintaining roads, public buildings and other infrastructure.

While ministers and officials have long complained of Whitehall budget silos, Treasury officials have the ability to move money between departments to places where it can be spent more effectively.

Murray is due to feed into next year’s government spending review, which will set departmental budgets for 2028-29 and 2029-30. If it succeeds in achieving efficiencies, the same cross-government approach will be followed with other areas of public spending.