Popular cuts and the civil service fight back

The Coalition started well. Their cancellation of ID cards, HIPs, and lots of regional government was just what many wanted to hear. Yesterday’s papers contained a few warnings that the civil service empire may strike back.

Mr. Lansley’s wish to streamline the bureaucracy in health has led to claims that Health Authority and PCT chiefs might be in line for massive pay offs. Mr Maude is busy trying to change the basis for redundancy payments, which is far from popular amongst officials. Mr Pickles’ statement that the stifling and expensive Comprehensive Area Assessment bureaucracy is being swept away has not be greeted with announcements of similar cuts in bureaucracy in Councils who had to provide all the information and comply with the system . Instead Councils seem to favour cutting grants to voluntary bodies, and some officers will probably be looking around for the most politically damaging reductions in services possible to put Councillors off the whole idea of saving money.

Meanwhile some MPs are trying to get the government to carry through some politically popular cuts. How about starting by sending many of the 12,000 foreign prisoners back to their homelands, with a clear statement that they will never be allowed back into UK now that we are planning better policed borders? That might help cut prison costs and cut the numbers of new prison places needed.

Why not follow up by asking Mr Hague to go to Brussels and explain that as the UK is having to cut parts of its domestic budgets, we expect Brussels to do at least as much. Would Brussels like to show us what 25% and 40% off their budget might look like, as that could prove very popular.

Most popular of all would be to follow up the PM’s statement that our troops will be out of Afghanistan within five years, with a faster timetable for training the Afghan army and police so we can pull out earlier.

Messrs Holmes and Lilico have produced a very useful guide to pay and staff numbers in the public sector entitled “Controlling public spending”. That shows, for example, that senior officials in national government rose from 5000 to 9000 between 2002 and 2009, public sector “marketing and sales” rose from 11,000 to 29,000, management consultants, actuaries and statisticians from 5000 to 23000 and public relations officers from 5000 to 10000. That shows there is plenty of scope for natural wastage to bring down the totals markedly over the next five years. Presumably the number of receptionists went up from 18000 to 30000 because there were so many new bodies set up.

This big increase in recruitment helped take total public employment on the ONS survey up from just over 6 million to 7.3 million. (6m on the narrower definition). The median salary in the public sector is now 12% higher than in the private sector, and median hourly earnings 30% higher.

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20 Comments

  1. Alan Jutson
    Posted July 19, 2010 at 8:17 am | Permalink

    I think I detect a little frustration from you at the speed (reduction in speed) of the proposed efficiency/cost savings being planned or actioned.

    The more we hear of the number employed by the State, and funded by us taxpayers, about what they do, what they are paid in salary terms, and the redundancy costs, really beggers belief.

    Someone has to grasp the nettle if we are to reduce our deficit in any meaningful way, otherwise we will just drift on as before with little change.

    The once in a generation opportunity to really get to grips with the Country's finances and balance the books, I can see is being lost.

    The momentum is slowing.

  2. waramess
    Posted July 19, 2010 at 8:38 am | Permalink

    When you find the job of cutting back the Civil Service is becoming too difficult you can always fall back on Plan B. There is a Plan B, isn't there?

  3. Tony
    Posted July 19, 2010 at 8:57 am | Permalink

    Good stuff John.

    The government will need to keep their nerve, as well as their eye on the ball vis a vis the civil service.

    Your comment about the EU budget is spot on, but I can't see William Hague having the cojones to speak in such plain terms to the EU oligarchy.

  4. Richard1
    Posted July 19, 2010 at 10:12 am | Permalink

    A succinct piece – the paragraph on non-jobs in the public sector is shocking, but not surprising. Its good to have the actual data to show that what we thought was the case is in fact. I think you duck one issue periodically: natural wastage may not cut it. Natural wastage requires people to retire or to decide to leave. Given the high pay and benefits of these positions this may not happen. Nor will natrual wastage concentrate in the most useless organisations. Whilst managing with as much sensitivity as it can, the Coalition needs to steel itself for compulsory redundancies in the public sector, as any private business has to do in such times. It further needs to manage public services in the public interest – by ensuring it retains the best staff and gets rid of the worst. Revolutionary stuff in the public sector, but essential if its to be brought under control. They should start with the quasi-political quangos.

  5. kevin Peat
    Posted July 19, 2010 at 11:12 am | Permalink

    Mr Cameron is a bit hamstrung over the Human Rights Act on some of this.

    • EJT
      Posted July 20, 2010 at 11:00 am | Permalink

      Easy answer to that one, isn't there? If we're serious, that is. We are serious………aren't we ?

  6. kevin Peat
    Posted July 19, 2010 at 2:10 pm | Permalink

    Of benefit payments:

    The minister of whom I was commenting earlier with regard to the Somali refugee housing rent fiasco thinks it ok to limit housing benefit to £1600 pcm. I'd like to point out that this is way beyond the take home pay of the average private sector worker whose net monthly income is around £1400 pcm. How does he think this makes hard working taxpayers feel ?

    That there is a proliferation of Pitbull owning oafs with tattoos on their necks and faces (and that's just the women) says one thing about Britain: that economically, legally and socially it PAYS to be like this. It pays to be unemployable and it pays to cultivate a threatening image. It pays the landlords and it pays those with a vested interest in property too.

    If this is what 13 years of boom means then I'd rather we went broke.

  7. Brett Hayter
    Posted July 19, 2010 at 3:00 pm | Permalink

    "The median salary in the public sector is now 12% hgher than in the private sector, and median hourly earnings 30% higher." I imagine these figures don't include the value of final salary pension schemes, or the option to retire early or purchase additional years, or the large economic value of higher job security. The previous government tried to explain away than nominal earnings gap by pointing to the amount of low wage jobs that the public sector now contract out, even though the difference in medians would require 20% of roles to have been replaced to explain the change.

  8. James Clover
    Posted July 19, 2010 at 6:09 pm | Permalink

    The proposal to withdraw fron Afghanistan by 2014 is almost as cheery as saying to someone, as the Germans invaded Belgium, "Never mind, it will all be over by1918".
    It's that far away, even now.

  9. GJWyatt
    Posted July 19, 2010 at 7:02 pm | Permalink

    If "the median salary in the public sector is now 12% higher than in the private sector, and median hourly earnings 30% higher", are median hours worked in the public sector 14% lower than in the private sector?
    Since 100*(1.12/1.30 – 1) = -13.9.
    So the typical public sector worker does some 5 fewer hours than the typical private sector worker. Clock-watching jobsworths.

  10. Paul Saysell
    Posted July 19, 2010 at 8:46 pm | Permalink

    "…….sending home many of the12000 foreign prisoners back to their homelands…….". Seriously John, are you dreaming that the UK has a government that would do what the public want?

  11. Pinkoliberalscum
    Posted July 20, 2010 at 12:36 am | Permalink

    John, what a delight it is to see you leaping with such unbridled joy at the prospect of so many highly paid public sector secretaries losing their jobs. They will of course be thankful that your government has created so many private sector jobs (all be they poorly paid), but hang on a minute, business confidence just went off a cliff didn't it?

    I have to say, I find your attitude and those who comment on your bizarre ramblings utterly repulsive.

    Reply: Try reading what I propose. I propose natural wastage not redundancies, and am keenest to reduce the numbers of higher paid posts. You may prefer the Greek or Irish solution, which leads to bigger cuts.

  12. Derrick Prance
    Posted July 20, 2010 at 7:56 am | Permalink

    I am able to tell you what a reduction of 35%-40% in ones budget means.Moving to Australia to be with my family incurred the wrath of successive governments who promptly froze my state pensions (all three) at the amount paid when I first arrived in Australia 14 years ago. Currently 300 pounds is taken each month from my wifes and my pensions, much of the remainder being spent on health and care costs.Soon we will be compelled to return to England where we will once again enjoy all the benefits of health, care and many other benefits obtainable by living there.This will be to the detriment of Englands already stretched finances to an amount in excess of 6,000 pounds annually. Uprating pensions for all living overseas would be a small price for England to pay saving some 3 billions annually.There is none so blind as those who do not want to see!

  13. christina sarginson
    Posted July 20, 2010 at 10:28 am | Permalink

    Intereting there is discontent in the civil service, rumours say they are looking to revolt this could be really difficult for the governmenr it they do, we only have to look at programmes like 'the thick of it' to understand how government runs!!!

  14. simon
    Posted July 20, 2010 at 11:47 am | Permalink

    Public sector management IS at this moment implementing cuts in the most damaging way .
    – Schools are already making classroom assistants redundant before back office staff at the LEA are chopped .
    – Managers are instructing their staff to work to rule because they have a 2 year pay freeze .

    They don't appreciate how lucky they are to get away without a pay-cut and don't appreciate the value of their pensions .

  15. Yarnefromhorsham
    Posted July 20, 2010 at 3:02 pm | Permalink

    Why is it that only outside of Parliament and the MoD most people know that "train the Afghan Army" is an oxymoron

  16. Nick
    Posted July 21, 2010 at 10:03 am | Permalink

    The big danger, as Mr Redwood states, is the determination of the public sector to circle the wagons and protect itself by ensuring – deliberately, and with malice – that those jobs lost are not with the useless officials but with the people actually doing the work: the police, nurses, Doctors, bin men, street sweepers, gardeners, librarians, teachers.

    This cannot be allowed to happen, and our elected representatives must have clear information on who could be sacked – such as the three marching bands for the armed forces, the endless ranks of media people who will be making every effort to now become indispensable or embarrassing to politicians.

    I don't want to see people losing their jobs. That said, I've worked in the civil service and seen first hand the phenomenal waste and utter inefficiency advocated. Reading how a council executive hired consultants to save money is utterly absurd. Someone paid £20,000 could have told her what to do, instead she costs £250,000 +pension and didn't seem to know, despite the evidence being all around. Such is the attitude of the state that the only way to save money is to stop them spending so much of it.

  17. Mark Wadsworth
    Posted July 21, 2010 at 12:43 pm | Permalink

    Excellent summary.

    A couple of typos though – "Pickle's", "consutlants" and "public soending"

  18. Lindsay McDougall
    Posted July 23, 2010 at 12:49 am | Permalink

    The median salary in the public sector is now 12% higher than in the private sector, and median hourly earnings are 30% higher. This imbalance can be cured by having a public sector pay standstill for the whole length of this parliament. Given that the supply of public sector workers now exceeds the demand by some margin, this is clearly do-able.

  19. Moonraker
    Posted July 23, 2010 at 10:03 pm | Permalink

    The median salary in the public sector is now 12% higher than in the private sector, and median hourly earnings are 30% higher. Hells teeth – I wish it had been so when I retired from the Civil Service. My final salary pension would be about 35% higher.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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