There are essentially two ways in which the civil service can meet Osborne's targets. It either stops doing stuff, or does everything cheaper. The second option has always been the favourite of central Statists; it allows them to continue to wield control, but of a poor quality, demoralised, outsourced service loathed by the public. The monkeys at the front line of Crapita and Pissco's 'services' catch all the flak and suffer high rates of attrition, whilst the shareholders reap the yields from skilfully negotiated contracts that offer less value to the public purse the longer they run for.
The real answer is for the central State to stop doing stuff. If it really needs doing, most of it can be done locally, and a complete stoppage is better than a poor substitute from Crapita. But what are the chances of being able to prise the clenched fists of the mandarins from the reins of power?