Spending Review 2015: Key workforce, estate and financial management reforms – and the assets in line for privatisation

Written by Matt Foster on 25 November 2015 in News
News

Comprehensive Spending Review eyes raft of efficiency-focused changes across government, including a review of sickness absence and cuts to the DWP estate. Here are the key details

As well as revealing departmental spending plans up to 2019-20 (click here for settlement details), the Spending Review document published by the Treasury sets out a series of common areas where Whitehall will be expected to deliver savings. Here are the key cross-government announcements:

ESTATE

  • Departments will release £4.5bn of surplus land and property assets by 2020.  Within this, the Department for Work and Pensions is set to reduce its estate footprint by 20%. According to the Treasury, that will be done through "seeking greater co-operation with local authorities, to improve benefit delivery and reduce costs." The already-announced HM Revenue and Customs closure programme will also play a part, the CSR says.
  • According to the CSR document, the government will overhaul its approach to land and property management, as hinted at in the Budget earlier this year, by charging departments market-level rents for their existing freehold assets. The document states: "The new model will be operational by March 2017, subject to legislative requirements, and all relevant central government land and property will transfer to the new central body by the end of this Parliament. The Spending Review announces that Liz Peace has been appointed as shadow chair to lead the implementation of the new body. The first assets transferred into the body will include freehold office, warehouse, storage and depot properties (and leaseholds where appropriate). Similar charging regimes will be introduced to the same timescale for the MOD and the FCO overseas estate. "

WORKFORCE REFORMS AND FINANCIAL MANAGEMENT CHANGES

  • The Treasury says it will consult on "further cross-public sector action on exit payment terms", promising "targeted reforms in areas where the public sector still has far more generous rights than the private sector". The government has already set out plans to cap public sector exit payouts at £95,000, a move unions have warned could hit long-service staff on relatively modest salaries.
  • There will be a review of sickness absence in public sector workforces. The Treasury says it will consult on "how to reduce its impact on public service delivery" and will consider legislation "where necessary". Again, it says current public sector sickness absence terms are "more generous than typical private sector arrangements". 
  • Single Departmental Plans, the new, unified documents bringing together key departmental prioroties, will be published in December.
  • There will be a centrally-managed budget for departmental communications campaign spending from 2016-17.
  • The government will take "further steps to reduce agency and contractor expenditure by at least 20% by 2019-20", and says it will bring in measures to reduce official travel costs by £50m by the end of the decade.
  • A new "Finance Academy" will be set up to "provide a learning and development offer for those working in government finance", with new "Centres of Excellence" established to bolster the finance profession.
  • A new "Costing Unit" will be established "to build a more forensic understanding of the cost of public services and drive productivity across the public sector".
  • When George Osborne kicked off the Spending Review earlier this year, he asked public sector workers and civil servants to write to the Treasury with money-saving ideas. Today, the Treasury has published a list of ideas it plans to take up, including scrapping paper payslips in Whitehall to save "at least £500,000 a year in unnecessary printing costs"; introducing a live web-chat service for inquiries about benefit claims; encouraging car-sharing at the Ministry of Defence; and opening up datasets held by the Department for Environment, Food and Rural Affairs.

PRIVATISATIONS

  • The CSR reiterates the government's intention to privatise the Green Investment Bank, saying the organsation will be sold off during 2016-17. 
  • It promises to "explore the sale" of the government's 49% stake in National Air Traffic Services (NATS), says ministers will consult on "options to move operations of the Land Registry to the private sector from 2017", and looks at bringing private capital into the Ordnance Survey "before 2020". Department of Health corporate assets relating to PFI contracts are also in line for privatisation.

More Spending Review coverage
Spending Review: 100,000 public sector jobs will go by 2020, OBR predicts​
​Spending Review verdict: reaction from the FDA, PCS, Prospect, the Institute for Government, the RSA and the CBI
Spending Review 2015: DWP to cut estate by 20% as government eyes £4.5bn savings
Spending Review 2015: The departmental settlements
Spending Review 2015: George Osborne unveils surprise boost for Government Digital Service

CSW will be running a post Spending Review webinar, in partnership with KPMG, on 10 December

 

About the author

Matt Foster is online editor of Civil Service World. He tweets as @CSWDepED

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Comments

Neil Stanley (not verified)

Submitted on 25 November, 2015 - 15:16
Sickness absence/Final pay settlements.....It would appear that Public Sector T&Cs are being eroded at will...I wonder how much more salami slicing can go on before a public sector career has precious little to offer the 'high flying acheivers' that it says it need to attract. Certainly not financial renumeration/job security only as it shrinks ... dead mens shoes

Janie (not verified)

Submitted on 25 November, 2015 - 16:50
At at the crux of all this, the main issue was caused by millionaire bankers messing up the economy. Public servants getting bashed over the head yet again. Private sector pay has been increasing at greater levels than for public servants, but I am certain that will not be seen as favourable for proper pay increases in the public sector. Staff are already under the cosh over sickness, warnings start at a very low level of absence over a rolling year, resulting in sick staff coming in when they are genuinely ill because they know that any further absence may result in getting disciplined or given the 'must improve' appraisal marking. Even staff getting cancer treatment are worrying over being off.

NH (not verified)

Submitted on 25 November, 2015 - 19:23
Cutting public sector staff, but also reducing spending on agencies and contractors? So who exactly is going to fill the gaps left by the cuts?

Nian (not verified)

Submitted on 26 November, 2015 - 13:57
It can’t all be bad news, we are ‘aligning with the private sector’. As some of our terms and conditions are better than the ‘average’ some are worse so we must be in line for some positive changes, otherwise they would just call it cuts to terms and conditions. You know the type of thing: cut rate mortgages and loans like many in the financial sector; heavily discounted mobile phones contracts; free and heavily discounted flights and holidays or even free phone lines and TV packages oooh I can’t wait to see what we get, it will be like Christmas. We might even get such outlandish benefits as consolidated, performance related pay progression. Or some other black magic that allows you to move up the pay scale. It might even narrow the gender and race pay gap between those who have been in a grade from those ancient times when there was progression and those of ethnic minorities and the female gender who have recently been promoted. As to sickness and absence we will surely align with other private sector organisations of similar size and offer extra health care, screening, free gym membership that sort of thing. After all we are aligning with the private sector. Don’t get me wrong I know full well that life in the private sector is not a bed of roses. But that is the point, this is not the private sector we are different, good and bad. Make these changes honestly and call them what they are, cuts and savings. If you want to dress them up as alignment then align some of the parts that might cost you some money and earn back some good will. Here ends the rant.

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