Economy · Budget & tax · 21 October 2026
Government departments deliver £16 billion in savings
HM Treasury has announced that government departments delivered £16 billion in efficiency and savings last year. The savings are equivalent to 4.1% of day-to-day spending.
HM Treasury has published details showing that government departments delivered £16 billion in efficiency and savings last year. The department stated that this performance significantly outperformed the set efficiency target. Chancellor of the Exchequer John Healey MP said: "Giving families and businesses a bit of breathing space is only possible if we have strong public finances."
In the 25-26 period, departments delivered £9 billion in efficiencies and £7 billion in savings. Specific service changes include the NHS using AI chest X-ray analysis to support faster diagnoses for over four million patients. An AI lesson-planning tool is also saving teachers an average of three hours a week, while the ‘Ask HMRC’ digital assistant handled 6.3 million interactions in 2024/25. Around 400 staff were freed up for more complex work due to these digital efficiencies.
The International Monetary Fund forecasts the UK will have the lowest deficit in the G7 by 2029. The Chancellor noted that his first Budget is scheduled for 28 October, where he will build on this work.
Written by StreetOwl from HM Treasury’s own announcement. It was drafted by StreetOwl’s own model, every figure and quotation was checked by code against the announcement, and it was read and approved by Michael Rossi before it went up. It says what was announced, not what anyone should do about it.
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