Civil service has fat to cut but ministers must be smart about it, IfG says

Report applauds demise of 20% headcount reduction target, but says policy profession “likely to feel the heat”
Jeremy Hunt (above) and Rishi Sunak must stop pretending more can be done with less, the IfG said. Photo: Imageplotter/Alamy Live News

By Jim Dunton

04 Nov 2022

Whitehall think tank the Institute for Government has said the civil service has “genuine fat to cut” as part of the savings targets that will be set out in this month’s Autumn Budget. But it is urging PM Rishi Sunak and chancellor Jeremy Hunt to adopt a constructive approach to the nation’s new financial straits.

In a seeming endorsement of Sunak’s decision this week to junk proposals for a headcount reduction of 91,000 staff across departments and agencies – equivalent to a 20% headcount cut, the new IfG report says No.10 should be helping departments invest to save and targeting poor performance.

But the report also encourages Sunak and Hunt to be clear that a smaller civil service will be able to do less, and that “brave decisions” will need to be made about which activities need to stop.

Then-PM Boris Johnson’s 91,000 job-cuts plan was billed as returning the civil-service headcount to pre-Brexit levels, on the basis that Brexit is done. Civil service unions have argued that the figure failed to account for responsibilities that the UK has effectively repatriated following its departure from the European Union, as well as new pressures – such as backlogs from the Coronavirus pandemic and responding to the war in Ukraine.

Report author Alex Thomas, who is a programme director for policy-making and the civil service at the IfG – and a former senior civil servant, said the think-tank’s best estimate was that roughly half of the growth in civil service headcount since 2016 involved new post-EU responsibilities.

“The rest was in response to Covid and Brexit transition, including ‘no deal’ planning, with staff largely now moved to fill other vacancies as they have arisen,” he said.

“As Brexit transition and the pandemic demands begin to recede from being part of the normal business of government this suggests that there is some genuine fat to cut.

“There will also – as always in any large organisation – be processes to improve and proper efficiencies to be made.

“Removing duplication, closing down projects when they have finished and adopting new technology to reduce overheads requires constant effort and attention. No efficiency programme is ever truly finished.”

However, Thomas said setting arbitrary targets for headcount reduction would have resulted in the loss of “talented, cheap, younger and mobile staff” while expensive, less-mobile and weaker performers sayed in post.

“Fewer permanent officials makes it more likely that consultants are called in at huge expense,” he added.

“And when the going gets tough, all the incentives are to reclassify civil servants, punting them out into arm’s length bodies and other quasigovernment organisations rather than make real savings.”

Thomas’ report, Cutting the civil service: How best to slim down and save money, argues that departments should be tasked with targeting “pounds not people” and focusing on the best ways to reduce their administrative budgets.

“If set at the right levels that will mean job cuts – but incentivised so that it is the costly poorer performers, in lower priority areas, that leave,” he said.

Thomas said the numbers suggested it was the policy profession that was “likely to feel the heat first” in relation to new job cuts, with operational-delivery teams coming under pressure if longer-term plans involve further savings from automation.

He added that it was also important for ministers to “send a clear signal” about the civil service roles that are most prized, and which they are keenest to retain.  

Digital and data specialists, scientists, engineers, analysts and project-delivery experts should be reassured that if they perform well their jobs are safe, Thomas said.

“Digital investment in particular must be protected to improve service provision and release genuine efficiency savings as staff can either be made redundant or reallocated to the jobs that only humans can do well,” he said.

Thomas also encouraged Sunak and Hunt to try to avoid pretending that more can be done with less funding and fewer staff, and instead “make brave decisions” about stopping some departmental work in order to protect priority services.

“A smaller civil service will be able to do less,” he said. “Piling more responsibilities onto over-stretched teams will normally mean that the work just gets done less well.

“Trying to paper over creaking civil service organisations and top-slicing budgets without stopping activity will lead to more public frustration over service backlogs.

“If ministers want to avoid more DVLA and Passport Office style anger at other public body performance, or protect ‘boots on the ground’ frontline prison officers and jobcentre operatives, they need to accept that services elsewhere will have to be cut.”

The chancellor is due to deliver his Autumn Budget on 17 November.

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