The government was today urged to find savings of £5bn a year from its property estate to help meet a growing black hole in public finances.
Research from accountancy firm PricewaterhouseCoopers said the cuts could be made by 2014-15 through selling under-used space and greater co-operation between government departments.
Its paper, Dealing with debt – reforming public services and narrowing the fiscal gap, said: “A collaborative geographical approach would provide a manageable scale and enable both delivery at a local level and cross-sector working to support a variety of policy initiatives.
“Regional planning should deliver a step-change in public sector delivery and release efficiencies and capital to fund them.”
The paper warned that “optimistic” Treasury forecasts would leave a £43bn funding gap, around 3% of UK GDP, in 2013-14.
PwC said savings of £20bn a year could be made by 2013-14, and £37bn by 2014-15, in addition to the government target to make £35bn of savings by 2010-11.
Head of macroeconomics John Hawksworth said: “Taking into account that our economic growth projections are significantly less optimistic than those made by the Treasury, we estimate a fiscal gap of around £43bn to be filled by 20130-14.
“There is no easy way to fill this. It is likely to require a combination of severe public spending restraint in the next Comprehensive Spending Review period alongside significant tax increases in 2011 and beyond over and above those set out.”
