Spending Review 2015: Key workforce, estate and financial management reforms – and the assets in line for privatisation

Comprehensive Spending Review eyes raft of efficiency-focused changes across government, including a review of sickness absence and cuts to the DWP estate. Here are the key details


By matt.foster

25 Nov 2015

As well as revealing departmental spending plans up to 2019-20 (click here for settlement details), the Spending Review document published by the Treasury sets out a series of common areas where Whitehall will be expected to deliver savings. Here are the key cross-government announcements:

ESTATE

  • Departments will release £4.5bn of surplus land and property assets by 2020.  Within this, the Department for Work and Pensions is set to reduce its estate footprint by 20%. According to the Treasury, that will be done through "seeking greater co-operation with local authorities, to improve benefit delivery and reduce costs." The already-announced HM Revenue and Customs closure programme will also play a part, the CSR says.
  • According to the CSR document, the government will overhaul its approach to land and property management, as hinted at in the Budget earlier this year, by charging departments market-level rents for their existing freehold assets. The document states: "The new model will be operational by March 2017, subject to legislative requirements, and all relevant central government land and property will transfer to the new central body by the end of this Parliament. The Spending Review announces that Liz Peace has been appointed as shadow chair to lead the implementation of the new body. The first assets transferred into the body will include freehold office, warehouse, storage and depot properties (and leaseholds where appropriate). Similar charging regimes will be introduced to the same timescale for the MOD and the FCO overseas estate. "

WORKFORCE REFORMS AND FINANCIAL MANAGEMENT CHANGES

  • The Treasury says it will consult on "further cross-public sector action on exit payment terms", promising "targeted reforms in areas where the public sector still has far more generous rights than the private sector". The government has already set out plans to cap public sector exit payouts at £95,000, a move unions have warned could hit long-service staff on relatively modest salaries.
  • There will be a review of sickness absence in public sector workforces. The Treasury says it will consult on "how to reduce its impact on public service delivery" and will consider legislation "where necessary". Again, it says current public sector sickness absence terms are "more generous than typical private sector arrangements". 
  • Single Departmental Plans, the new, unified documents bringing together key departmental prioroties, will be published in December.
  • There will be a centrally-managed budget for departmental communications campaign spending from 2016-17.
  • The government will take "further steps to reduce agency and contractor expenditure by at least 20% by 2019-20", and says it will bring in measures to reduce official travel costs by £50m by the end of the decade.
  • A new "Finance Academy" will be set up to "provide a learning and development offer for those working in government finance", with new "Centres of Excellence" established to bolster the finance profession.
  • A new "Costing Unit" will be established "to build a more forensic understanding of the cost of public services and drive productivity across the public sector".
  • When George Osborne kicked off the Spending Review earlier this year, he asked public sector workers and civil servants to write to the Treasury with money-saving ideas. Today, the Treasury has published a list of ideas it plans to take up, including scrapping paper payslips in Whitehall to save "at least £500,000 a year in unnecessary printing costs"; introducing a live web-chat service for inquiries about benefit claims; encouraging car-sharing at the Ministry of Defence; and opening up datasets held by the Department for Environment, Food and Rural Affairs.

PRIVATISATIONS

  • The CSR reiterates the government's intention to privatise the Green Investment Bank, saying the organsation will be sold off during 2016-17. 
  • It promises to "explore the sale" of the government's 49% stake in National Air Traffic Services (NATS), says ministers will consult on "options to move operations of the Land Registry to the private sector from 2017", and looks at bringing private capital into the Ordnance Survey "before 2020". Department of Health corporate assets relating to PFI contracts are also in line for privatisation.

More Spending Review coverage
Spending Review: 100,000 public sector jobs will go by 2020, OBR predicts​
​Spending Review verdict: reaction from the FDA, PCS, Prospect, the Institute for Government, the RSA and the CBI
Spending Review 2015: DWP to cut estate by 20% as government eyes £4.5bn savings
Spending Review 2015: The departmental settlements
Spending Review 2015: George Osborne unveils surprise boost for Government Digital Service

CSW will be running a post Spending Review webinar, in partnership with KPMG, on 10 December

 

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