Departments need more help to plan for impact of civil service job cuts, NAO warns

Report by the National Audit Office says the centre of government must do more to support departments struggling to manage the changing Whitehall workforce

By Sarah.Aston

05 Jun 2015

The centre of government is not doing enough to help departments manage the impact of staff reductions and budget cuts, the public spending watchdog has concluded.

A report by the National Audit Office, published this morning, finds that while the Cabinet Office has overseen a drastic reduction in the number of civil servants since 2010, it has failed to produce an overall strategic plan of how to manage this reduced workforce.

The number of civil servants has fallen by 18% since 2010, reducing Whitehall’s annual salary costs by almost £2.29bn.

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However, the watchdog says the centre of government – the Cabinet Office, Treasury and Civil Service Human Resources – has “done little so far to help departments with strategic workforce planning”, and warns that it must do more to “lead efforts across government to make sustainable reductions through strategic workforce planning”.

"Departments have significantly cut their staff numbers and costs in the last five years but not enough planning has gone into making sure that, over the longer term, the reductions already made and any required in the future are sustainable and do not damage the delivery of public services,” NAO chief Amyas Morse said.

He added: "The centre of government must do more to help departments meet these challenges, including managing the heightened risk of a shortage of vital skills".

The NAO points out that of the four case studies they focused on – the Department for Transport, Ministry of Defence, Department for International Development and HM Revenue & Customs – only two departments had developed workforce plans for the entire department, and only one had created “detailed plans of staff numbers by grade beyond 2015”.

“Departments have made significant workforce reductions, and must manage the impact on public services of any further reductions. A lack of planning beyond 2015 would increase the risks of departments facing workforce problems and not being well informed when they go into the next spending review. Departments should be planning strategically, for at least two to three years ahead,” the report says.

The report also raises concerns that departments continue to lack “comprehensive and reliable information on the skills their workforce possess and their needs”.

In 2013 the spending watchdog reported that departments did not have accurate information on their workforce’s professional qualifications or experience. In response, the Cabinet Office introduced departmental skills audits. However, the report concludes that departments still lack the right systems to monitor their workforce properly.

Changing demographic

The watchdog also highlighted that since 2010 the demographic of the civil service has changed.

The reports notes that as a result of a Cabinet Office restriction on external recruitment, the number of new level entrants has significantly decreased. As a result, the number of 20 – to 29-year-olds employed has decreased by 5% since 2010, while the number of 50 – to 59-year-olds has increased by 5%.

The NAO said: "We consider it fair to assume that low levels of recruitment and the creation of a generational gap potentially heightens the risk that the civil service will not have the talent and skills needed for future challenges.”

Mark Serwotka, general secretary of the Public and Commercial Services Union, said the report showed that both the Treasury and Cabinet Office "lack a clear view" of how civil service departments are planning for the future.

"Ministers must not continue to ignore the need to properly consider the impact of their cuts, and they must negotiate with us about the resources required to provide quality public services," he said.

A Cabinet Office spokesperson said they had noted the comments made by the NAO and would review their recommendations.

“The civil service is the smallest it’s ever been since the Second World War, saving taxpayers £2.4bn last year, while continuing to deliver leading public services," the spokesperson said.

“We are working to ensure that the civil service is more skilled and diverse, and have made strong progress in building strong commercial, digital and project delivery skills. We will continue to focus on these areas.”

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