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At the federal level, Conservatives have picked battles with public servants in watchdog roles, such as Parliamentary Budget Officer Kevin Page.CHRIS WATTIE/Reuters

The Conservative government is cutting deeper and faster than planned – and the cuts are focused on front-line services rather than the back office of the bureaucracy, according to a new report from the Parliamentary Budget Office.

The PBO's latest report, released Thursday morning, takes a close look at spending trends over the first two quarters of the 2012-13 fiscal year in an attempt to see how the government's cost-cutting 2012 budget is playing out inside federal departments.

Parliamentary Budget Officer Kevin Page's report notes that over the first six months of the year, overall spending – which includes direct federal spending and transfers to individuals, groups and other levels of government – is down 0.6 per cent. The PBO notes that this is lower than the 2 per cent increase in total spending that Ottawa projected in its November 2012 fiscal update.

As for the details of where those cuts are taking place, the PBO report says that also is out of sync with the government's stated plans. While the government has maintained that most of its spending cuts would be to "back office" internal services by consolidating activities like information technology and human resources, the PBO notes that spending on internal services by departments is up 8 per cent.

"The continued increase in Internal Services expenditure suggests that spending growth on overhead has not been curtailed, as suggested in Budgets 2010 through 2012, and the focus of restraint exercises has instead been on reduced spending to front line services," the report states.

Matthew Conway, press secretary to Treasury Board President Tony Clement, responded to the PBO report, stating that government has said the full cuts to back office spending won't be in place until 2014-15.

Mr. Conway also says the PBO's calculations leave out some back office efficiencies that have already occurred.

"This report underestimates the savings from operational efficiencies because it does not include all back office savings measures," said Mr. Conway in an email. "Our government has been very clear that 70% of the ongoing savings are from operational efficiencies."

Mr. Conway said that in the case of the Treasury Board, "significant savings" have been found in the areas of financial management and expenditure management, "which by their very nature embrace operational efficiencies, yet do not fall within the internal services category. This information is available on our website and has been provided to the PBO."

Mr. Conway also states that Treasury Board is consolidating corporate services across government departments, increasing the use of video-conferencing over travel and replacing paper reports with electronic versions.

The PBO, which is currently challenging federal departments in court for not providing enough detail on spending trends, points out examples of cuts – and spending increases – that are not being explained.

"No information is provided regarding the 4,079 per cent increase in year-over-year spending for Canadian Northern Economic Development Agency's Business Development, nor the 63 per cent year-over-year decrease in Human Resources and Skills Development Canada's Citizen-Centered Service," the report states.

"As noted in previous PBO reports, parliamentarians and Canadians have yet to see departmental and agency spending plans consistent with Budget 2012, nor have their quarterly financial reports provided useful disclosure regarding the Budget 2012 spending cuts."

The large percentage increase at the Canadian Northern Economic Development Agency involves a relatively small amount of money, with spending rising from about $59,000 to about $2.5-million.

The second example at Human Resources involves more money. Spending over the first six months of the year was $55-million, down from $146-million.

According to a federal government website, 'Citizen-Centred Service' "aims to improve and integrate government service delivery by providing Canadians with a one-stop, easy-to-access, personalized service in person, by telephone, Internet and via mail… This program activity also includes client feedback mechanisms and the responsibility for increasing public awareness of Service Canada."

Officials with the Canadian Northern Economic Development Agency and Human Resources both said the large percentage changes to specific programs are due to shifts in the way spending is reported this year compared to last year. An official with the agency said one program area that used to be reported seperately now falls under "business development," which is why spending in that category is up.

Conversely a spokesperson for Human Resources Minister Diane Finley said some spending that had previously been reported under "Citizen-Centred Service" has moved to Shared Services Canada, which is another department. The spokesperson said the reduction in spending this year is closer to $7.5-million, which reflects announced cuts to Service Canada Centres for Youth, as well as less spending on term and casual employees.

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