Government departments have made significant reductions in their staff numbers and salary bill since 2010, according to a report today by the National Audit Office. This has been achieved mainly by minimizing recruitment, a cheaper option in the short term than paying staff to leave, but resulting in older staff comprising a greater proportion of the workforce. Today’s report points out that this changing of the age profile in the civil service might increase the risk of a shortage of talent and skills in future.
The number of civil servants fell by 18%, from 492,000 in March 2010 to 405,000 in December 2014. The civil service annualised salary bill stood at £11.13 billion in March 2014, 18% (£2.49 billion) lower in real terms than four years earlier.
Because of the restriction of recruitment, the percentage of the civil service workforce aged 20-29 reduced from 14% to 9% from 2010 to 2014 while the percentage of 50-59 year-olds increased from 26% to 31%. The proportion of staff in the most junior grades reduced over the same period from 46% to 40%. There is a growing awareness in government of the risk these low levels of recruitment may bring, such as not having the talent and skills needed for future challenges, although there is not yet a clear understanding of the potential consequences or the necessary management actions.
Today’s report underlines that in the new Parliament departments may need to manage any future staff reductions strategically, to reduce the risk of damaging public service delivery. However, some departments have made less progress than others in setting out their long-term operating models. The Public Accounts Committee reported in 2012 that departments did not have long-term plans to work with fewer staff. Transformation in departments has not been as widespread or advanced as expected.
The NAO examined four departments as case studies (HMRC, MoD, DfT and DfID), and found that in general they had not yet fully implemented strategic workforce plans across their groups. They also lacked comprehensive information on workforce skills and some had not completed detailed plans for the period after 2015, increasing the risk of not being well-informed when they go into the next spending review.
To achieve value for money, departments face the challenge of ensuring that their reductions are sustainable. They must prioritise the developing and strengthening of their long-term operating models and strategic workforce plans, and ensure they recruit or develop the critical skills needed. The centre of government is building its strategic role, but must do more to support departments to meet these challenges: for example, by providing more expertise and allowing them to manage their pay bill flexibly.