• Public sector employment has risen to 6.2 million, with staff costs of £260 billion, yet departments face pressure to reduce costs while continuing to recruit for priority services.  
  • Departments need to plan for how AI and digital technologies will fundamentally affect future staffing levels, roles and skills, so they can realise the substantial efficiency benefits expected from these technologies.
  • The NAO sets out eight lessons for stronger workforce planning, including identifying future skills needs and addressing staffing shortfalls early

The government needs to strengthen workforce planning to improve productivity, build more resilient public services and manage staff costs effectively, according to a new National Audit Office (NAO) report.

In its latest report on government workforce planning, the watchdog sets out lessons and insights for helping government leaders understand the people, skills and capabilities they need to deliver services now and in the future.

The report draws together lessons from years of NAO work across the civil service and wider public sector.1

This comes at a time when public sector organisations face ongoing pressures to cut costs, while also ensuring they can recruit for priority jobs and skills – especially indemand digital and technology skills.

Another central theme of the report is the impact of AI and digital technologies. Government expects substantial efficiencies from digital transformation and AI, amounting to £45 billion each year, while 76% of civil servants expect AI to change how they perform their jobs within the next five years.

With public sector headcount at 6.2 million,2 the report urges departments to plan now for the workforce impact of AI and automation, including changing staffing needs, new skills requirements and the redesign of roles and services. For example, increased online self-service for tax and benefits is reshaping administrative and case processing roles.

Drawing on the watchdog’s recent work on government’s use of external consultants,3 the report argues that stronger workforce planning could help departments reduce reliance on consultants by addressing underlying skills and capacity gaps, while ensuring consultancy is used only where it offers genuine value. It also points to Spending Review 2025 as a positive step forward, as departments were required for the first time to submit strategic workforce plans alongside spending bids. The report concludes this can help the government develop better informed and more realistic spending plans.

All eight lessons are detailed below:

Lesson 1: Use workforce planning to identify and plan for productivity gains

Government should use workforce planning to understand the workforce changes needed to improve productivity

Lesson 2: identify future skills needed to unlock more productive public services

Government needs a clearer picture of its skills gaps, particularly in areas such as digital, data, AI, cyber and project delivery, so it can recruit, train and reskill to meet future workforce needs

Lesson 3: Strengthen organisational resilience by addressing staffing shortfalls early 

Workforce planning can help organisations build resilience by identifying and tackling staffing gaps before they affect services, staff wellbeing or performance.

Lesson 4: Use workforce modelling to manage uncertainty around future workforce needs

Organisations should test different future scenarios and assumptions, including changes in demand, technology, funding and productivity, so workforce plans are more realistic and adaptable.

Lesson 5: Understand workforce needs to gain a firmer grasp of staff costs

Staff costs are a major part of government spending, so organisations need to understand what drives workforce costs — including headcount, pay, grades, locations, skills and use of temporary or external labour.

Lesson 6: Integrate workforce planning with wider business and financial planning to develop more informed and realistic plans 

Workforce planning should not sit separately in HR. It should be built into spending, business and strategic planning so organisations understand whether they have the people and skills needed to deliver their objectives affordably.

Lesson 7: Build strong capability and robust data systems to enable better workforce planning

Workforce planning quality varies across government. Better data, stronger analytical skills and improved modelling capability are needed to make workforce plans more consistent and evidence based.

Lesson 8: Coordinate workforce planning across sectors and systems 

Workforce challenges often cut across organisational boundaries, such as health, social care, justice and local government. Government needs better coordination so decisions in one area do not create pressures elsewhere.

“Good workforce planning is central to the government’s ability to deliver effective and resilient public services.

“As AI and other digital technologies reshape how organisations operate, it’s clear the government needs to be on the front foot by making sure it has robust plans for the workforce, skills and capabilities it needs now and in the future.”

Gareth Davies, head of the NAO

Full publication

Government workforce planning – lessons learned

Notes for editors

  1. Please see our accompanying good practice guide here: Government workforce planning – audit framework
  2. As at December 2025.
  3. NAO insights: Government’s use of external consultants