Hunt announces civil service headcount cap

Chancellor says civil service expansion will be “frozen” and plans drawn up to return civil service headcount to pre-pandemic levels
Chancellor Jeremy Hunt delivering the speech during the Conservative Party annual conference at the Manchester Central convention complex. Photo: PA/Alamy.

By Tevye Markson

02 Oct 2023

The government will cap the civil service at its current headcount of 488,000 and aim to get it down to pre-pandemic numbers.

Chancellor Jeremy Hunt today announced civil service “expansion” would be “frozen” and a plan would be put in place to return to its size before the Covid-19 pandemic.

The Treasury labelled the policy the “Civil Service Numbers Cap”, in a press release published following Hunt’s surprise announcement during his Conservative Party conference speech. It said the cap – which comes into effect immediately and will be in place for the duration of the current Spending Review period – “does not equate to a recruitment freeze, and current recruitment campaigns will remain ongoing”.

Following the current Spending Review period, which lasts from 2022-2025, government departments will be asked to produce plans “on driving down headcount over the long-term to pre-pandemic levels” as part of the public sector productivity review being carried out by John Glen, the chief secretary to the Treasury. Glen's review is due to be published this Autumn.

Hunt said the “freeze” on civil service expansion “will save £1bn next year”, while the Treasury said the cap “could save up to £1 billion by March 2025 compared to the current trajectory”.

“We have the best civil servants in the world and they saved many lives in the pandemic by working night and day,” the chancellor said. “But even after that pandemic is over, we still have 66,000 more civil servants than before. New policies should not always mean new people.”

The Treasury said it had based its £1bn calculation on a median wage of £32k as reported in the latest civil service statistics plus additional non-wage costs of £13k per FT, and  "the latest available headcount for full-time employee numbers (457,000 as of June 2023) from the ONS (excluding devolved administrations), as well as a projection of 490,000 in March 2025 based on the current trend in headcount growth since 2016."

This projection does not taken into account changes to trends in headcount over that period nor recruitment freezes already in place, such as in the Ministry of Defence.

The department said the £1bn figure is "subject to change based on departmental negotiations and a later retrospective update to headcount data".

Hunt said he will “not lift the freeze” until the government has “a proper plan, not just for the civil service, but for all public sector productivity improvements”. He said the ultimate aim is to increase public sector productivity growth so the government can stabilise spending as a proportion of GDP and decrease tax.

Departments will be expected to include in their productivity plans detail on how they will utilise modern technology to drive efficiencies and deliver better services for the public at lower costs – across both the civil service and the wider public sector.

“This process will also prioritise the protection of critical frontline services,” the Treasury said.

“Through tackling unnecessary bureaucracy and improved use of technology, it is expected that the civil service will become more productive and act as a lean, agile, and cost-effective organisation, in line with the people’s priorities,” the department added.

The Treasury has also announced a parrallel value for money audit of” equality, diversity and inclusion spending in the civil service, with findings and actions to be announced by the chancellor this Autumn.

“Not a serious government”: Unions slam announcements

Unions have slammed the plans, with FDA General Secretary Dave Penman describing Hunt’s announcement as “straight out of the Jacob Rees-Mogg playbook”.

Rees-Mogg, in February 2022, announced plans to cut 65,000 jobs to get the civil service headcount “under control” . Boris Johnson then announced, in May 2022, this would be increased to 91,000 cuts, a plan which Sunak subsequently scrapped in November when he became PM, saying he did not believe "top-down targets” for civil service headcount reductions were “the right way" to ensure “every taxpayer pound goes as far as it possibly can”.

Penman said Hunt had, just like Rees-Mogg, picked a point in time in the past and decided “that is the right number of staff to deal with the public service challenges of the future”, calling this approach “intellectually bereft”.

“It is so glaringly arbitrary that all it does is demonstrate that this is not a serious government,” he said.

“As with Johnson’s government, announcements that have a profound impact on hundreds of thousands of committed public servants are used as party political stunts, with little regard for the organisation that ministers, not least the prime minister, are supposed to lead,” Penman added.

“Officials will now be left with thousands of questions from staff that they cannot answer as they look to retro-fit workforce plans to another arbitrary headcount figure.”

Mike Clancy, general secretary of Prospect, said the “latest U-turn shreds any remaining doubts about the prime minister’s lack of personal commitment to civil servants”.

Unions also raised concerns about the impact on public services. Clancy said the plans would “further undermine vital public services which are already struggling”.

PCS general secretary Mark Serwotka said “shrinking an already-overstretched and under-resourced civil service will inevitably result in cuts to vital services that people depend on”.

“We have long argued cuts have consequences, so if ministers want fast-moving border controls at our ports and airports, an end to backlogs for those seeking driving licences or applying for driving tests, they must employ more civil servants, not less,” he added.

“Our hardworking members do an invaluable job keeping the country running and we won’t stand by and watch the Conservatives make them scapegoats for a failing economy.”

Penman added: “Governments are of course free to decide the size of the public sector, but ministers need to be honest with the public about the consequences of those decisions. Many public services are still on their knees post-Covid, we have had a cost-of-living crisis, a war on mainland Europe and record levels of illegal immigration.

“What we need is a government with a clear agenda on what it wants to deliver, and a realistic assessment of the resources it needs to achieve that. Pretending Covid, or Brexit for that matter, is “over” and we can simply turn the clock back to a magical point in the past is fantasy politics of the worst kind.”

Prospect said it has “demanded a meeting with ministers to convey the real sense of alarm among their own staff that ministers have unleashed with this dangerous announcement”.

A Treasury spokesperson said the proposals are "not about setting arbitrary targets" but "making sure the direction of travel is down rather than up" for the rest of the SR period "and stopping unchecked growth".

They said the Treasury will "work with departments to identify any risks" that could see headcount rise and ensure the policy is "implemented in a way which preserves frontline service delivery, business critical activity and key government priorities".

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