Budget 2017: Hammond accused of "taking civil servants for granted" as he sticks to pre-Brexit cuts plans

Written by Civil Service World on 8 March 2017 in News

Unions round on the chancellor as Budget sticks to George Osborne's 2015 departmental cuts plans in spite of Brexit vote

Public sector unions have accused Phillip Hammond of taking civil servants "for granted", as the chancellor used his first Budget to stick to long-standing Whitehall spending plans rather than hand departments extra resources to cope with Brexit.

Departments are currently part-way through delivering spending settlements agreed with the Treasury back in 2015, before last year's vote to leave the European Union. 

But while last year's Autumn Statement allocated an additional £400m to key Brexit-facing departments – the Department for Exiting the European Union, the Foreign Office and the Department for International Trade – it offered no extra cash for those departments set to be heavily affected by the UK's departure from the EU, including the Home Office and Defra.

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Despite unveiling a better-than-expected outlook for the public finances in his Budget on Wednesday – with the exchequer now on track to borrow £26bn less than expected over the next five years – Hammond reaffirmed his predecessor's departmental spending plans, while raising national insurance contributions for some self-employed workers and pledging some extra funding for social care.

But the lack of movement on spending plans has already sparked the ire of unions representing public sector workers, with the FDA – representing senior civil servants – accusing Hammond of wanting "a brighter future outside the EU" while failing "to equip the public servants tasked with delivering it".

The union's assistant general secretary, Naomi Cooke added: “In fact, Brexit, the biggest economic event facing the UK, hardly got a mention. 

"No additional resources for departments looking into the eye of the storm and no much needed relief for the hundreds of thousands of civil servants who will see the value of their pay packets continue to fall.

“Civil servants on the front line of the UK’s exit from the EU have already seen a real terms cut in pay of more than 20% and higher inflation forecasts for the next two years will mean that many civil servants will be more than 25% worse off, despite a government proclaiming a priority to protect living standards."

Cooke said the Budget had "failed to recognise the challenge that the civil service is facing and failed to provide the additional resources needed to deliver a successful Brexit for Britain", warning: “Civil servants and the civil service cannot continue to be taken for granted in this way.”

That view was echoed by PCS, the largest of the civil service unions and which represents rank-and-file officials.

The union trained its fire on Hammond's decision to stand by the 1% cap on civil service pay rises first pledged by Osborne in 2012, and then extended in 2015.

Research published by PCS earlier this week highlighted the impact of that pay cap on staff, concluding that average civil service pay had fallen by up to 9% in real terms over the past six years.

In a statement, the union said: "In refusing to lift the 1% public sector pay cap, the chancellor Philip Hammond is condemning 'just managing' civil and public servants to wage cuts of up to 20%."

The union's general secretary Mark Serwotka said PCS would "continue to fight to break the 1% pay cap and to stop Theresa May’s government condemning civil servants to three more years of wage cuts and hardship".

The GMB union meanwhile warned that public services were now "in crisis due to the cuts and underfunding over the last seven years".

“This should have been a Budget to provide a plan for fair pay and support for all workers, including for those in the public sector who've had an average of £9,000 pinched from their pay packets since 2010 and face losing £4,000 more in the three years ahead," general secretary Tim Roache said.

But Hammond used his Budget speech to argue that the country still faced a major task in getting public spending back on track, and argued that now was not the time to commit to "more unfunded spending in the future".

"Britain has a debt of nearly £1.7tn – almost £62,000 for every household in the country," he said.

"Each year, we are spending £50bn on debt interest – more than we spend on defence and policing combined. And borrowing over the forecast period is still set to be £100bn higher than predicted at Budget 2016.

"So the only responsible course of action is to continue with our plan undeterred by any short-term fluctuations. We will not saddle our children with ever-increasing debts."

Whitehall departments are currently drawing up plans for further cuts of between three and six percent to their 2019/20 resource budgets, as part of a £3.5bn efficiency drive announced by Osborne in 2016 top of the 2015 settlements.

Hammond has already offered some wiggle room on his predecessor's target, saying the Treasury will allow £1bn of that £3.5bn to be earmarked for reinvestment in "priority" areas.

But Wednesday's Budget contained no new detail on what this would mean in practice, instead reiterating an earlier announcement that former Tony Blair aide Sir Michael Barber would be advising on the process.

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