Whitehall makes £5.5bn in savings

The Government made savings of £5.5 billion from departmental expenditure over the past year.

Minister for the Cabinet Office Francis Maude said the coalition was "determined to go even further" in its aim to "cut the cost of Government".

The cash savings, he stressed, had been independently audited with "no smoke and mirrors", and were the equivalent this year alone to around £500 for each working household in Britain, the salaries of around 250,000 junior nurses or the cost of around 1.6 million primary school places,.

The coalition set up the Efficiency and Reform Group (ERG) based in the Cabinet Office, on taking office 27 months ago, to make "efficiency savings" across Government. Mr Maude said: "It seemed to us absolutely crucial, that as we drove the deficit reduction programme, the priority rather than cutting frontline programmes, should be to cut the cost of Government."

He added: "In the first year, a short year, until March 2011 we saved £3.75 billion. This last year to March 2012 we beat our own prediction and saved an astonishing £5.5 billion from departmental expenditure ... but we are determined to go even further."

Mr Maude turned his fire on Labour, claiming money had been squandered under the previous government. He said: "We have to, when we spend taxpayers' money, always strive to find better ways and more efficient ways of providing public services.

"And the question you have to ask is why were these savings never made before, why was so much taxpayers' money squandered on things like unnecessary consultancy, wasteful marketing and advertising spend and under-used property? We've saved money on all of those things and much more."

But Shadow Cabinet Office minister Jon Trickett said: "For all their talk of savings, this Tory-led Government's failures are costing this country dear. David Cameron and George Osborne have delivered a double-dip recession made in Downing Street, and they are already having to borrow £150 billion more than they planned over the Parliament - the cost of their failed economic plan.

"Far from protecting the front line, they are cutting thousands of police officers and have broken their promise to protect the NHS budget which has fallen two years in a row.

"Already, 4,500 nurses have been cut since David Cameron became Prime Minister. And yet at the same time the salary bill for Tory and Lib Dem spin doctors has risen by 25% in just one year - so much for cutting the cost of Government."