The Treasury is looking to reduce its micromanagement of other departments as part of its plan to become smaller and more efficient, Beth Russell has said.
The HMT second permanent secretary told parliament’s Treasury Committee on Wednesday that the department is working on a “project reset” plan to reset the Treasury’s relationship with other departments.
Russell said the ultimate aim of this will be to build a positive culture where the Treasury works more in partnership with other departments.
“Can we get to a position where there is less micromanagement but more transparency from departments?” Russell said.
“And how do we get the incentives right for the Treasury to be involved a bit more earlier and upstream in decision making? And I think the quid pro quo is then there isn’t a delay later where we’re trying to mark people’s homework and have big assurances processes late on.”
Russell said this will include finding ways to get more information from departments in “real time to enable us to really focus on the insight rather than the transactional bit of the relationship”.
Russell added that this type of collaboration does already happen “with a lot of departments". She said that, for example, she works very closely with HM Revenue and Customs and the Department for Work and Pensions, and the Treasury sits on their investment boards and delivery boards.
At the session, James Bowler, HMT’s permanent secretary, gave more detail on the department’s plans to reduce the size of its headcount.
Asked by former chief secretary to the Treasury John Glen for reassurance that the Treasury will remain fit for purpose, Bowler said he was confident that “a slightly smaller Treasury can be a better Treasury”. He suggested a smaller department could, for example, aid career progression.
Bowler said the department is looking to reduce the department’s headcount by “just over 200 people” to go back to its pre-Covid size and is “going incredibly carefully” with its voluntary exit scheme.
“So for example I think we are the only department who is saying the scheme isn’t open on balance to our higher performers,” he said. “We’re doing that because we want to retain talent.”
Asked by Glen if the department’s high levels of churn are a worry, Bowler said the department has “a higher turnover than other institutions”, but added that “it’s down quite considerably in the last couple of years”.
“More than half of that turnover goes to other government departments,” Bowler noted. “And, you might recall, we are a bit of an accelerator department. Our actual resignation rate is at 5%, which is 1% more than the average of 4%.”
Russell, meanwhile, confirmed that the reduction in the size of the department's workforce would not lead to a reduced presence at the Darlington Economic Campus, where around 350 HMT civil servants are currently based.
AI will relieve staff of 'lower value' work
At the hearing, the officials were also asked whether staff should be concerned about AI replacing Treasury jobs.
Russell said the department is "looking at AI as a compliment to what our staff are doing to help improve the outcome but also relieve them off some of the lower value work to enable them to focus on the higher value work".
Explaining how the department is already using AI, Russell said: "The Treasury is not an operational department like a lot of other large government departments. We do have some operational aspects of our work which we are particularly looking to use AI to change and improve. So things like correspondence, our office and financial sanctions casework, I think we’re the first department to have an HR chatbot. So in our operational processes we’re already using AI.
"For our policy teams, we’re rolling out and testing now general purpose tools. So we’ve got our own HMT GPT. We’re trialling Copilot at the moment with 25% of our staff, and what we’re doing in the policy space is doing some deep dives across our policy teams about how AI can help compliment and improve the policymaking process, so right from researching issues through to helping them write advice, presentations, consultations where we can use AI to analyse responses."
Russell said AI is also one of the ways "in which we can achieve the same outcomes and the same quality of policy advice with a slightly smaller workforce".