MPs warn on civil service staff cuts

Savings in staff costs made through reducing departmental headcounts will only be sustainable by completing “long-term operating models for their business” beyond the spending review period, a report by the Commons Committee of Public Accounts said.

The report entitled Managing early departures in central government suggested that without a rethink about the way departments will operate with fewer staff, numbers might increase once restrictions on recruitment and spending had been lifted.

The committee acknowledged that departments were required to make cost savings through staff reductions following the 2010 spending review, noting departments had “acted quickly” to cut employee numbers.

According to the report’s figures, a total reduction in headcount of about 35,000 was made in 2011, nearly 18,000 of which were through early departures.

It said: “The initial cost to departments of these departures, which should be around £600m, will take between 11 and 15 months to recoup, after which departments will save around £400m per year.

“However if the staff reductions achieved so far, and planned, are to be sustainable then they will need to be supported by a redesign of the way business is carried out.

“We remain to be persuaded that all departments are putting in place the fundamental redesign in working practices that is needed to operate permanently with a lower number of staff.”

Commons committee member Richard Bacon, a Conservative MP, said: “Although departments have moved quickly to reduce staff numbers, few appear to be giving thought to how they are going to operate permanently with a lower number of staff. It is imperative that they do so.

“Without a fundamental redesign in departments’ working practices, staff numbers will probably rise as soon as restrictions on recruitment and spending have been lifted.

“The savings that have been achieved in staff costs will not be sustainable unless departments now complete long-term operating models for their businesses.”

The report warned there was a “real risk” to departments’ ability to deliver services.

It also recommended improving the “quality and consistency” of performance appraisal arrangements in the civil service to secure efficiency savings and “better decision-making about the management of the workforce”.

The committee claimed the Treasury did not have “proper control over individual exit payments that exceed the standard early departure terms” and recommended this was “rectified”.

Mr Bacon added: “Given the speed with which staff cuts were carried out and the scale of the cuts, there are significant risks to service delivery.

“Even greater challenges are ahead. Compulsory redundancies will have to be used more, bringing considerable risks of damage to morale.”

Mark Serwotka, general secretary of the PCS Union, said: “This highlights the ideological nature of the Government’s cut first, plan later approach. Under the guise of ‘dealing with deficit’ Ministers are slashing spending with no regard for how essential public services are being affected.

“The question from MPs shouldn’t be, how can departments cope with fewer staff, but why are they being forced to in the first place? Any move towards increased use of compulsory redundancies would be totally unnecessary, and would be fiercely resisted.”