£16 billion productivity boost delivering better value and better services for taxpayers.
Harnessing AI and new technology is already helping millions more NHS patients get faster diagnoses and freeing up teachers to spend more time teaching.
This drive to make public money work harder comes a week after the IMF praised the UK’s fiscal discipline and forecast the UK will have the lowest deficit in the G7 by 2029.
Wednesday 21 Oct 2026
£16 billion in efficiency and savings were delivered last year as Government departments significantly outperformed their efficiency target. This is equivalent to 4.1% of day-to-day spending.
The NHS was a key driver through service redesign and digital transformation. This includes new AI chest X-ray analysis supporting faster diagnoses for more than four million patients.
Efficiencies have also been delivered by other major departments. For example, DfE’s AI lesson-planning tool is saving teachers an average of around three hours a week, and the ‘Ask HMRC’ digital assistant is helping to handle a record 6.3 million interactions in 2024/25, freeing up around 400 staff for more complex work.
Today’s announcement is proof that departments can deliver better bang for taxpayers’ buck while improving public services. It comes after the Prime Minister and Chancellor wrote to Cabinet to be clear that they will need to reprioritise spending within their budgets to deliver the greatest impact for families and businesses.
Chancellor of the Exchequer, John Healey MP, said:
John Healey
“Giving families and businesses a bit of breathing space is only possible if we have strong public finances.
“A central part of that is making sure we are a government that spends
every pound with purpose.
“And alongside this we are getting our deficit down, backed by the IMF who have forecast ours to be the lowest in the G7 by 2029.
“At my first Budget on 28 October, I will build on this work so we can provide breathing space for today, and hope for the future.”
At the IMF, the Chancellor reiterated that building resilience is essential for providing breathing space today and making the long-term changes our country needs. This is why the government is sticking to its fiscal rules.
With global borrowing costs rising, it is essential that we remain committed to fiscal stability. The IMF has been clear that the UK’s deficit reduction plan stands out and should stay the course, as borrowing is forecast to fall to the lowest levels in the G7 by 2029.
