Spending Review verdict: reaction from the FDA, PCS, Prospect, the Institute for Government, the RSA and the CBI

Reaction to the chancellor's Spending Review from Peter Riddell, Matthew Taylor, Dave Penman, Mark Serwotka, Garry Graham and Carolyn Fairbairn

By Civil Service World

25 Nov 2015

Institute for Government director Peter Riddell

"The chancellor today announced a much smaller squeeze on departmental spending plans than he indicated in his July Budget. But despite the reduced scale of cuts in the immediate future, there are still big challenges in implementation if the plans are to be achieved.

"There is a lot of stress on digitalising government with the ambition that by 2020 people will have the option to pay online for every central government service. Funding has been increased to support these ambitious plans. Transformation will, however, require Whitehall to work in new ways as well as managing with many fewer civil servants.

"The other striking feature of the statement is the big changes to local government financing. The increased powers for councils are being accompanied by increased financial responsibilities which are likely to result in higher council taxes."

Matthew Taylor, former head of the Number 10 policy unit, now chief executive of the RSA

"We know that there is a tendency that things that look good on the day that they are announced look less good when they’re subject to detailed scrutiny. And I think looking at the  Spending Review immediately, it feels like there’s a lot of good news that is elaborated upon  and bad news that we’re not really completely clear about.

"So I think it’s going to take a couple of days and quite a lot digging to really understand the impact that this will have on people. For example, council tax is a highly regressive tax, so while  people on lower incomes will welcome the decision not to go ahead with the working tax credit  cuts, above-inflation increases in council tax particularly hit poorer families because it’s a  highly regressive tax. So we need to work those things through.

"The second thing is that, in a sense, the things that the chancellor's spending more money on he’s specified, but the things he’s spending less money on, all we have is a figure. We just know  that departments are being cut by however many per cent. We don’t yet know what that’s  actually going to translate into in terms of those departments’ programmes. So inevitably – and I’m not criticising Osborne – it’s like being given your Christmas presents today and then being  given the bill for them in January.

"I think the question that is going to be asked much more, and more loudly, is whether one  needs to completely reconsider the whole way in which the civil service works. I think radical  ideas like major departmental mergers will come into play. I think the overall structure of the  civil service will have to be examined. It’s already the case that the civil service is increasingly  hourglass shaped – there’s still quite a lot of senior people, and there are junior people, but in  the middle ranks a lot have been cut away. And if that continues to be the case then how does  an organisation work when it seems to have quite a lot of senior people all on high salaries who  are very talented, and quite a lot of junior people, but not much in between. I think that means  the viability of those functions will come into question....

"My own judgement is that it’s difficult to see how the present structures of the civil service can  cope with the level of cuts that are going to have to be made to the establishment. And  therefore I think people will be thinking about more radical models [...] At the senior level, you  might see permanent secretaries overseeing two departments for example – I think we’ll have  to see measures like that because with this level of pain, some of it has got to come out of the  higher ranks. And if you start removing people from those higher ranks, you’re going to have  to think about what you do with functions because you can’t simply ask junior people to take  on those higher level functions."


FDA general secretary Dave Penman

"Whilst these budget cuts have been extensively trailed over the last few months, the sheer scale of reductions in public spending announced today is no less eye watering. Despite months – if not years – of preparation, the government has once again failed to demonstrate, to both public servants and to taxpayers, how it will cut resources so dramatically while ensuring public services are maintained.

“The chancellor’s announcement today means that many departments are facing cuts of around 50% over a decade. Efficiencies of this scale cannot be achieved through the usual salami-slicing approach favoured by the Treasury and chancellor. Unless public services are transformed, these budget cuts can only result in the decimation of key public services. 

“The question has to be asked: how can the billions of pounds of capital investment announced by the chancellor be delivered efficiently by a civil service stripped of resources and people?”

Prospect deputy general secretary Garry Graham

"The cuts announced today have been made without any real understanding of the skills needed in the civil service. As such they are crude and arbitrary. The challenges facing the UK have never been greater in areas such as defence, security, climate change, transport and energy – this is not the time to be arbitrarily cutting specialist skills which enable us to respond intelligently.

“On a brighter note, the chancellor appears to have heeded our call for recognition of the important economic contribution made by heritage, a sector which has suffered from some of the most severe spending cuts in the last five years. We therefore welcome increased funding for the Arts Council and national museums and galleries as well as maintaining free museum entry."

PCS general secretary Mark Serwotka


"The Tories' wrecking-ball plan for our welfare state will set the country back decades and leave families who are already struggling even worse off. The scale of departmental cuts means services to the public will not just suffer, they will be torn to shreds.

"In the last five years, George Osborne has failed on his own terms and can now only claim to be trying to fix an economy he himself has broken. It is clearer than ever that stripping billions of pounds from our economy in the name of austerity is a political choice, not an economic necessity, and it is not working."

Carolyn Fairbairn, CBI director-general:

"Businesses will be pleased to see the chancellor staying the course on deficit reduction, his commitment to an industrial strategy, and the emphasis on nurturing a vibrant business community. Standouts include maintaining spending on infrastructure; ramping up housebuilding; support for energy-intensive sectors and for advanced manufacturing. Business recognises there are tough choices to be made in balancing the books, but many are reaching a tipping point, where the cumulative burden of the living wage, apprenticeship levy and business rates risk hurting competitiveness.

"The Apprenticeship Levy, set at 0.5%, is a significant extra payroll tax on business and by widening the net it will now catch more smaller firms. We welcome the creation of a levy board to give business a voice on how the money is spent and will work with the government to ensure a focus on quality.

"Many firms will be disappointed to have been kept hanging on for a much-needed review of business rates until next year’s Budget. Firms will be reassured by the protection of the science budget, but the shift from grants to loans for Innovate UK could dampen bold and game changing innovation, particularly amongst smaller businesses...

"Public services underpin productivity and prosperity. With the population ageing and expecting more from public services, extra investment must be matched by transformational reform, such as making more use of digital transactions, to have a sustainable impact."

More coverage:
Spending Review: 100,000 public sector jobs will go by 2020, OBR predicts​
Spending Review 2015: DWP to cut estate by 20% as government eyes £4.5bn savings
Spending Review 2015: Key workforce, estate and financial management reforms – and the assets in line for privatisation
Spending Review 2015: The departmental settlements

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