The civil service should reduce its training budget, redirecting the money to recruit and retain talented people, according to a report published today by think tank Policy Exchange.
The education department spent £2m on training in 2014/15, but just £240,000 on recruitment, the report notes, while the culture department spends almost four times more on training than recruitment.
“Consistently spending more money on training than recruitment is a mistake,” says the report. “It is very difficult to convert average employees into high-performing ones.”
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The think tank also suggests that departments should be given more flexibility over their paybills, arguing that “there is a very strong case for delegating control over the overall paybill to departments, giving them much greater responsibility and flexibility over how they choose to deploy their HR budget to meet their organisational needs”.
A pilot scheme giving this type of flexibility to the Intellectual Property Office and Department for Environment, Food and Rural Affairs has been running since 2013. Both departments are exempt from the freeze on external recruitment and 1% cap on payrises which affect the rest of government.
Although the pay and recruitment freeze have “saved significant amounts of money from the cvil service paybill", says the report, this has “come at a price”.
“Departments have been unable to properly link pay to performance, and talent has been lost as a result,” the report says.
Its authors argue that loosening central control over paybills will allow departments to pay more to attract talent as well as reducing pay for poor performers, and plug long-term gaps in expertise.
They also found that the amount government spends on external contractors has been rising since 2011/12, and is now nearly at 2009/10 levels.
Damian Hind, author of the report, said: “After a couple of years of restraint, expenditure on consultants and agency staff has ballooned again.
“Departments don’t appear to have a proper handle on the use of outside consultants and agency staff. Putting contractors on the payroll and giving departments a pre-determined HR budget will incentivise them to use consultants and interims more responsibly.”
It also questions the government's strategy of providing training mainly through external providers on a centralised contract, noting that “outsourcing learning and development is not always the best thing for organisations to do” and that “the quality of civil service training, in particular is highly questionable”.
“The civil service has the financial clout to compete for the best talent – it spent £15.7bn on staff in 2014/15 – but it needs to deliver better value for money.”