Figures show Government's previous 'efficiency' drives drove up staff and budgets

Labour's ability to force through savings in the public services was cast into doubt last night, after it emerged that a previous Whitehall "efficiency drive" led to more civil servants and bigger departmental budgets.

Gordon Brown last week attempted to convince voters he could reduce Britain's £800bn national debt with a package to save £12bn over four years. The package, unveiled two days before Alistair Darling's pre-Budget report, included plans to "name and shame" overpaid public sector workers and use crime maps and online school reports to cut overheads and halve the budget deficit.

But an investigation by The Independent on Sunday has established that, five years after the Government pledged to slash more than 100,000 Civil Service jobs following an efficiency review by Sir Peter Gershon, the workforce and spending on Whitehall departments increased.

Although ministers claim success in hitting Gershon-inspired targets, an analysis of 17 of the 21 departments shows the payroll has risen from 525,000 to almost 540,000 since 2004; budgets have soared from £143bn to £180bn; and staffing numbers conflict dramatically with government figures, which put the civil servant headcount at about 496,000.

Details tucked away in the latest annual reports and accounts reveal that seven departments admit increasing staff levels. But even those that maintain they have cut numbers have been accused of merely shifting staff to other departments or into a growing number of semi-autonomous quangos, which are still funded by taxpayers' money.

David Craig and Matthew Elliott, whose new book Fleeced traces some £3,000bn of public funds they believe have been mismanaged in the past decade, claim the Cabinet Office "cut" 958 jobs in three years by transferring hundreds of staff to berths elsewhere in government.

"When all these changes are included, the apparent reduction of 958 employees becomes an overall increase of 293," Mr Elliott said. "This might explain why taxes and public spending keep going up at the same time as the Government claims to be saving tens of billions a year."

Staffing at the Foreign & Commonwealth Office has risen from 6,119 in 2003-04 to more than 14,000 today, while its budget increased from £1.7bn to £2.68bn. Staff numbers at the Home Office have increased from almost 21,000 to more than 26,000, and the budget by nearly £1.5bn. Despite the extension of self-government from Belfast, the Northern Ireland office has also managed to increase its staff and spending.

The National Audit Office recently analysed £13bn of the £21.5bn savings the Government claims to have made under Gershon, and found that £10bn of them were "uncertain".

By 2012-13 the cost of servicing the national debt will have risen to £63.7bn. This means each taxpayer will pay more than £2,000 in tax just to pay for debt interest.