NAO: Civil service pay freeze risks talent exodus

The government is risking an “exodus” of talent because of its decision to squeeze civil service pay, pensions and benefits, according to a report by the National Audit Office (NAO) published today.

By Joshua.Chambers

19 Jun 2013

“Promotion to the senior civil service is becoming so financially unattractive as to put off talented people” the report said. “Owing to the pay freeze, and changes to pensions and benefits, the total reward for senior civil servants has been reduced by around 17 per cent in real terms over four years.”

“The NAO warns that the latest moves to increase pay flexibility and offer incentives for business critical roles may not be enough to recruit, motivate and retain the right people,” it said.

While currently there is a low rate of resignations, the NAO said that economic recovery “could see an exodus of the most talented and marketable senior people, at the very time when effective corporate leadership is needed”.

The report also noted that there are “significant skills shortages” in the civil service, notably in the areas of “commerce, project management, digital delivery and change leadership.”

However, it praised the government’s five-year capability plan for improving skills and performance as “coherent, innovative and ambitious”.

At present, the senior civil service “cannot be described as a unified leadership group,” the NAO said. “The 24 professional networks in the civil service lack influence across departmental ‘silos’ and may not be the right groupings to meet the needs of the modern civil service.”

Amyas Morse (pictured), head of the NAO, said: "The real challenge is to shift the long-standing culture in the civil service to create a leadership group with the full range of skills needed for success, today and in the future, and which is a shared resource across government."

A Cabinet Office spokesman said the department was “pleased” that the NAO recognises its efforts to improve cross-departmental leadership.

He added: “Since April 2010, the number of senior civil servants has reduced by 16 per cent and the senior civil service paybill has reduced by 20 per cent. Last year civil servants helped deliver £10 billion in efficiency savings by changing the way Whitehall operates. But we are determined to drive even greater value for the taxpayer, while continuing to provide exceptional public services.”

FDA trade union boss Dave Penman told CSW earlier this year that the Cabinet Office is unwilling to consider the long-term careers of civil servants. “The coalition is closing its eyes to the danger of a huge brain drain,” he said, adding “it’s something the government is just not thinking about, because it’s a mantra just now about austerity, and therefore trying to think about longer-term rewards, longer-term careers, is just not something that they’re prepared to engage in.”

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