Civil service headcount continues to rise as real-terms pay falls

Spending on consultants and temporary labour has grown by 40% since 2018-19, IfG's Whitehall Monitor reveals
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By Jim Dunton

23 Jan 2024

Civil service full-time-equivalent headcount hit 496,150 in September last year – up by 3.2% on the previous year – making ministers’ latest proposals to cut staffing numbers even harder to hit, the Institute for Government has said.

The think tank’s latest Whitehall Monitor report offers a snapshot of change in the civil service. The number of officials has returned to the level it was at when the coalition government took office in 2010, bouncing back from a post-war low of 394,230 in 2016.

The IfG said that some 93% of the growth in civil service headcount between September 2022 and September 2023 took place in the Home Office and the Ministry of Justice, reflecting the need to staff front-line operational-delivery roles such as asylum decision making and prison officers.

Whitehall Monitor 2024 says Office for National Statistics data indicated the Department for Work and Pensions, HM Revenue and Customs and the Cabinet Office were the departments that underwent the biggest reductions in headcount over the period.

The report acknowledges that the figures predated last year’s Autumn Statement proposal to “cap” civil service headcount at 2019 levels over the next Spending Review period, effectively requiring a reduction in numbers of 66,000.

But it said the latest figures would mean a reduction of more than 70,000 would be required between 2025-26 and 2027-28 if the target was to be hit.

Inflation squeeze would require staffing cuts of 20%

Whitehall Monitor 2024 says the impact of inflation on budget settlements means departments now face average real-terms cuts in 2023-24 and 2024-25, with provisional forecast spending on staff within administration budgets “implying cuts of an estimated £2.5bn” between the last and next financial years.

The IfG said such savings would be “undeliverable” and would require “staff cuts of over 20% starting immediately”.

The think-tank predicted that such a scenario would not happen, but added: “Spending on the civil service will be tight for the foreseeable future, but these plans need to be brought back to reality.”

Another year of real-terms pay cuts

While headcount has risen, Whitehall Monitor 2024 reports that the real-terms value of officials’ pay fell in 2022-23, with every civil service grade posting a reduction ranging between 12% and 26% since 2010. It said the median salary of members of the Senior Civil Service had fallen by more than 25% in real terms over the period.

Unsurprisingly, the report noted that civil service morale declined for the second year running, with fewer than one-third of the workforce satisfied with pay, a nine-percentage-point drop on the previous year.

The IfG said that dissatisfaction with pay was “clearly” a driving factor behind officials choosing to leave the civil service. But it added that the relationship between civil servants’ satisfaction with their pay, their overall satisfaction with their role and other factors behind morale was less clear.

Whitehall Monitor 2024 reports that the proportion of civil servants who either moved between departments or left the civil service altogether was 11.9% in 2022-23. While the figure is lower than the 13.6% churn recorded 2021-22, the IfG said it was the second-highest rate since at least 2010-11.

Areas of growth that ministers will be keen to play down in the coming months are the use of private-sector consultants and temporary labour.

The report said that Whitehall’s reliance on both has increased in recent years, with spend reported in departments’ annual accounts rising by 40% in real terms since 2018-19.

The Department of Health and Social Care led the way in spending on temporary staff ,  notching up spend of 15 times more in 2021-22 than in 2018-19 because of pressures related to Covid-19.

The Foreign, Commonwealth and Development Office spent seven times more on temporary labour in 2022-23 than its predecessor department did in 2018-19. The IfG said the war in Ukraine, 2020’s merger of the Foreign and Commonwealth Office and the Department for International Development, and IT activity were the prime contributory factors.

Senior IfG researcher and Whitehall Monitor 2024 author Jack Worlidge said that while ministers could take pride in some positive developments related to the civil service over the past 12 months, the bigger picture was one of failure to kick off radical reform.

“The civil service made progress in several areas last year – efforts to relocate officials out of London are going well, while its ranks are becoming increasingly reflective of the general population,” he said.

“But 2023 was a missed opportunity to address some of the deep-rooted problems plaguing Whitehall.

“If the next government wants to deliver its priorities, it has no choice but to embark on the most fundamental reform of the civil service in decades.”

Whitehall Monitor 2024’s key recommendations include the introduction of more effective workforce planning to improve efficiency, recruitment, churn-reduction and the retention of “top talent”.

The IfG also wants to see relationships between ministers and civil servants reset, with the civil service put on a new, “firmer” statutory footing to strengthen relationships and accountability in government.

Other asks include overhauling legacy IT and safeguarding digital experts from headcount cuts. 

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