Another leaked letter

The following letter from Dr Roy Spendlove (Miscellaneous Projects) to Dame Lucy Doolittle  (Director of Unit for co-ordinating cross cutting initiatives and partnerships)has come into my possession. It shows latest civil service thinking on the cuts.

Dear Lucy,

               I felt it was time I reported to you on the progress we are making in explaining the realities of public spending to the new Ministers and the Treasury. As you appreciate, many official colleagues felt the spending envelope was too tight and would require various adjustments, programme by programme.

                 The government as a whole wisely signed up to presenting the £90 billion a year cash increase in current spending over the five years as a large cut. As Ministers are now finding out, the cash increase will entail substantial and difficult reductions in various areas, and some redundancies.  The demands for cash for the EU budget, the Euro loans, overseas aid, health reform and benefit reform will eat up what extra cash is available.

              Ministers have now accepted that they were too hasty in considering the sale of forest leases. The new work on protecting biodiversity and woodland access may require an additional estimate  for the Forestry Commission. Ministers also accepted that it made no sense to be too parsimonious on school sport facilities, and have revised that measure.

                    At Work and Pensions they have accepted advice to delay the reform of benefits until 2013, and to implement it over the election years 2013-17  assuming a 2015 election. This we felt would ensure moderation in implementation, and leave time for the large computerisation programme it entails. . Ministers have also opted for a guarantee that there will be no cash losers, which means we need to budget for the higher costs of change accordingly.

                     At Defence Ministers agree that in order to meet the tough totals there do need to be redundancies, rather than  relying on natural wastage. Officials pointed out that if you rely on leavers you do not necessarily keep the structure of forces you want. This does entail more difficult decisions and higher cost. The email sackings were an unfortunate error which highlighted the difficulties of the spending policy.

                      Ministers have decided to put some more money into charities and the Big Society, following the insensitive  decision by many Councils to cut their grants to worthwhile causes as part of their response to the spending squeeze.  The government willingly advanced a substantial sum to Ireland, which equalled the budget savings for 2010-11, reminding Ministers how events can alter strategies very quickly.

                       We should warn Ministers that the health reforms also require substantial new computer systems to make them work. The new purchasing consortia need to provide professional back-up to the GPs and need to be properly staffed and tasked.  The GPs will not take kindly to these changes if they feel preparation has been poor, or budgets pinched, not allowing them the full support they will need to take on these new areas of activity. I am sure Ministers will come round to the view that it is worthwhile spending more here to bring about a better outcome.

                       I will of course alert you to any other areas of potential trouble before they arise. The more we look at it, the more we feel the settlement was unrealistically tight and may in later years need to be relaxed. Given the limits placed on the budgets there will be further issues that arise that entail unpopular decisions. As we have seen with the forests, lobby groups are strong and active, so we need to be ever vigilant. There remain issues over the 2013 reduction of Child Benefit that could be worthwhile revisiting soon.  I do hope you can get these messages over to the Treasury.

Yours

Roy

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30 Comments

  1. Alan Dean
    Posted February 18, 2011 at 6:14 am | Permalink

    It brings to mind the following exchange:

    Jim Hacker: “The opposition aren’t the opposition.”
    Annie Hacker: “No of course not, silly of me. They are just called the opposition.”
    Jim Hacker: “They are only the opposition in exile. The Civil Service is the opposition in residence.”

    • Brian Tomkinson
      Posted February 18, 2011 at 10:01 am | Permalink

      Yes, Alan, it’s all set out in those wonderful episodes of “Yes (Prime) Minister”.

      In the “Economy Drive” Sir Humphrey sums up the position of the Civil Service:
      “There has to be some way to measure success in the Service. The Civil Service does not make profit or losses. Ergo, we measure success by the size of our staff and our budget. By definition a big department is more successful than a small one.”

  2. lifelogic
    Posted February 18, 2011 at 7:28 am | Permalink

    What chance have we got if we cannot even sell a few trees to the private sector. U turn if you want to. If you fire half the state sector they will not be able to cause all this trouble for all the rest of us.

    I see we now have an “Office of Tax Simplification” – have they done anything yet our system is of the most absurd complexity. The complexity, of itself, is a huge burden on wealth creators creating more pointless jobs in the private sector in tax advice and administration.

    • Stuart Fairney
      Posted February 18, 2011 at 9:14 am | Permalink

      Lady Thatcher’s iconic line came to my mind also when I heard about Mr Cameron’s latest decision. A politician like the aforesaid lady is badly needed. She had courage and principles, she wasn’t afraid of a Guardian editorial or a BBC vox pop and she understood the basics of how the economy works.

      I fear we are in for two more administrations of trouble. The end of this one plus Mr Ed (whichever one) making things worse in 2015-2019. If either hyperinflate, God knows who might come next. All in all, stormy seas ahead.

      May I request JR, you have your website guy set up a poll (it’s pretty easy) so that we may vote on where we see inflation topping out by 2015, say 0-5%, 5-10%, 10-15%, 15-20%, 20-25%, 25-30% or 30% plus I would be most interested in other contributors views

    • norman
      Posted February 18, 2011 at 11:52 am | Permalink

      I’d be all for a few more u turns.

      Let’s u turn on the windmall and solar panel farms as an unaffordable nonsense that won’t help a whit to save the world, let’s u turn on the 50% tax rate (that I’m a long way from paying before I’m accused of self-interest), let’s u turn on letting inflation rip, let’s u turn on votes for prisoners, let’s u turn on a locked in 3% p.a. increase in the EU budget for the next 5 years, let’s u turn on Ken Clarkes open door prisons, let’s u turn on the housing benefit u turn (if that makes sense), let’s u turn on the u turn (due to be it being too much like hard work) of Nick Clegg’s Great Repeal Bill, etc.

  3. OldRightie
    Posted February 18, 2011 at 8:36 am | Permalink

    This shows how all powerful the unelected mandarins are. As is also the case in local government. It is a tired and discredited system but where is the real courage to change it. Egypt, perhaps? Certainly not The EU.

  4. alan jutson
    Posted February 18, 2011 at 9:07 am | Permalink

    John

    I am getting worried.

    This is a bit too close to the possible truth.

    I read in the Telegraph today that Local Authorities have 1,700,000 more employees than they did in 1997.

    Could I ask what extra services these people provide at such a huge additional cost over those provided in1997.

    • Caratacus
      Posted February 18, 2011 at 9:28 am | Permalink

      Alan,

      Phew! For a moment I thought was a real letter that John had unearthed. Now I realise that it was fictional. Well, thank Heaven for that. I can rest easy knowing that nothing like that has gone on at all and that HMG is committed to spending less….

      You are a card, John!

    • lifelogic
      Posted February 18, 2011 at 3:19 pm | Permalink

      Public Services like liaising, coordinating, communicating, integrating, sustaining, equality outreaching, digital anything, educating in socialist sustainability and equality, counting forms with boxes for ethnic origin and fines for planning breaches, parking and putting things in the wrong bins on the wrong days.

      They don’t really care what they do so long as someone pays them and their pensions for doing it.

      • lifelogic
        Posted February 18, 2011 at 4:54 pm | Permalink

        Also just as happy blocking the roads with islands, speed humps, bollards and barriers and anti car traffic light phasing as ripping them all out again. And just as happy considering planning consents for wind farms as they will be considering their removal shortly after.

        Still at least the government seem to have realises the feed in tariffs for PV electric are insane.

    • zorro
      Posted February 18, 2011 at 6:10 pm | Permalink

      Alan,
      Do not be churlish…..think how many diversity coordinators, lesbian outreach workers, five a day advisors, strategic coordinators, vastly overpaid CEOs (town hall clerks), HR staff/advisors, and semi permanent consultants on exorbitant contracts that are employed now and what tremendous value they add to our services…..Just imagine, how did we ever survive without them? It is a small price to pay to sack binmen, nurses et al to keep such luminaries. When you are a highly paid CEO it is very necessary to have a large secretariat as you are such an important person, and you must consult myriads of people before you even think of ever making a decision. This has an added advantage of disguising latent incompetence and make an inevitable and outrageous pay-off more likely.

      zorro

    • david englehart
      Posted February 18, 2011 at 11:46 pm | Permalink

      alan

      truly these figures are frightening.

      apart from the thatcher years the problem lies in the fact that conservative governments since the war have failed to tackle the tendancy for this country to drift into a sort of halfway house between extreme capitalism in america and the communism of the east europeans.

      yet in that period the east europeans have deperately tried to shake off their communist past and we have failed to learn from the abject failure of their system.

      also if you give someone a cushy job they are hardly going to vote themselves out of it so there is a potential 1,700,00 more votes.they dont all vote labour any more than all immigrants do but they know who to thank.

      the unedyfying site of some ancient labour lords trying to block a bill which is meant to make our voting system fairer sume up their real attitude towards democracy.

      let us not forget they nearly succeeded in saving the day despite gordon brown and the uncontrolled spending spree.

  5. English Pensioner
    Posted February 18, 2011 at 9:26 am | Permalink

    I remember when I was a parent governor of our local middle school at the time of falling rolls some 30 years ago. At the meeting, we were told that the school would have to loose a teacher due to the smaller number of pupils, so maintaining the pupil-teacher ratio. OK, I said, and presumably the number of staff in the Education Office will also be reduced pro-rata. “Oh no” was the reply “we’re taking on some extra staff to deal with the redundancies”!
    Nothing changes.

  6. A David H
    Posted February 18, 2011 at 10:28 am | Permalink

    What a relief to read this letter, I was beginning to fear that our government had totally lost the plot and that we were heading for economic disaster. Which reminds me, for several years now, we have been told that government, banks, and many businesses don’t have any money. I have some spare money but strangely, no one seems to be interested in borrowing it off me for a reasonably modest fee.

    Alan Jutson asks “What extra services these people (Local Authority) provide.” Having recently applied for planning permission for a small extension, I am able to tell him one valuable new service is the compilation of a computer record of one’s – age, gender, marital status, sexual orientation, ethic origin, religion, whether one is a gypsy, traveller or mentally impaired. Now, I don’t know whether anyone actually provides them with this information, so that some useful computer inputting time can be spent. However, it occurs to me that if they do, then at some future date, government might like to consider changing a few laws. The scope for future increased minority revenue collection or population culls has not been overlooked. Three cheers for our glorious leaders.

    • alan jutson
      Posted February 19, 2011 at 5:14 pm | Permalink

      To all those who responded.

      Perhaps I should have asked what additional “USEFUL” services have now been provided by these extra 1,700,000 people.

      My own guess

      Absolutely Zero.

  7. acorn
    Posted February 18, 2011 at 10:54 am | Permalink

    Dear Roy
    It has taken us nine months to get this coalition government painted into the corner in most of the departments; longer than we expected. The guy Pickles is a bit of a P in the A, but we will get him sorted eventually.

    Needing more immediate attention is the chance that the WASPS – Daily Mail faction – might get the coalition back-tracking on fuel taxes. We need to mobilise to prevent this. Fortunately, the Mail is blaming the oil companies, with its “petrol profiteers” article today; which is good for us. Naturally, the press does not understand that nobody makes decent money running a refinery; the money is in the crude.

    BTW Roy. If you want to know where the Mail gets its pre-tax petrol price from:-
    At yesterday. 38.26 + 7.65vat for 95R. Plus 58.95 + 11.79vat for the duty. Plus 10.17 +2.04vat for refinery; distribution and retail margin.

    They added the 38.26 and the 10.17 to get circa 48.43 pence per litre. ( The other 80.47 is tax, but keep that bit to yourself.)

    Civil Service rules OK
    Dame Lucy

  8. Pete
    Posted February 18, 2011 at 10:55 am | Permalink

    I think the huge majority of people think overall cash spending is being cut. In some ways this is good for the government: it makes it look prudent when it is not. On the other hand, people worry that the cuts will affect services they rely on. In some cases that may be true, because some areas of spending really are being cut. The risk is nothing like as great as most people think, though, because the overall amount of money is going up.

    What is going on? Is the government failing to explain its policies, to the extent that people see a spending increase as a spending cut? Or is the government unwilling to correct the impression given by the media, on the basis that a reputation for prudence could win the next election?

  9. Alte Fritz
    Posted February 18, 2011 at 11:04 am | Permalink

    To supplement Alan Jutson’s point, it would be good to know where the additional 1.7m are deployed and likewise in other public bodies. Instinct tells me that reduction of ‘front line’ service is a deliberate eye catcher and that bloated administrative services which are not in the public eye are safer. As noted recently, the highly paid Chief Execs probably do not know how to get value for money.

  10. Andy
    Posted February 18, 2011 at 11:27 am | Permalink

    “There remain issues over the 2013 reduction of Child Benefit that could be worthwhile revisiting soon.”

    Interesting that the author of the letter mentions the proposed changes in child benifit.

    I wonder if he is referring to the ridiculous proposal that would allow some familes earning a combined income of £80,000 to claim it, whilst a family on a single income of £43,000 will not be able to claim?

    The argument that the system needs to work like this to make it “simple “is a joke.

    If you are going to ask the question to higher rate tax payers in their tax return (Not that all HR tax payers fill in a tax return, I don’t) : “Is your partner claiming child benifit?” it is just as simple to ask “Is your household income over £43,000 ?” to the person making the claim for child benifit.

    There really is trouble ahead with this change.

  11. fake
    Posted February 18, 2011 at 11:32 am | Permalink

    My mental picture of the civil service is of a very fat man, shoveling money down his gob.

  12. Bernard Otway
    Posted February 18, 2011 at 11:38 am | Permalink

    I just watched Homes under the Hammer friday 18th Feb 2011,look at it on BBC I player.
    The programme showed a detatched bungalow in Wargrave Berkshire,auctioned in April
    2008 for £365,000,bought by two property developers,they planned to demolish the existing house and replace it with two 4 bed semis ,in keeping with exactly other examples in the same street.As most will know who watch this programme they return at a later time to see the end result,in this case a few months later.When returning they found the bungalow undemolished
    and now slightly refurbished and let out to individual tenants to each room.On enquiring WHY there was no progress on the original plan,it was explained and shown on plans,that
    the first plan put in showed each semi having two off road parkings in front of each.
    This was rejected on the grounds that two parkings instead of one increased traffic in the road,the plans were resubmitted showing ONLY one parking in front of each,this was rejected on the grounds that only one parking in front meant other car[s] would increase
    traffic congestion by having the extra cars park on the street.I have in all my 65 years NEVER seen something so stupid,it is symptomatic to me of ALL the stupidities many,many,many I have seen since arriving back in this utterly stupid country ,in 2008 after 28 years in South Africa,and unless it is changed completely GB is DOOMED.That is why I am seriously considering returning to South Africa.Is it not IRONIC that the Sir
    Humphrey character from Yes Minister was portrayed by a South African.

  13. oldtimer
    Posted February 18, 2011 at 12:16 pm | Permalink

    It is just as well that Roy is not responsible for opining on the validity of the current official growth forecast. Then we really would be depressed.

  14. REPay
    Posted February 18, 2011 at 4:08 pm | Permalink

    The letter was funny – but the lack of progress and the fact that this increase is being portrayed as a swingeing cut is the result of no real debate about public fiances at the election.

    What happened to the Tory election promise that public sector pensions would be capped at 60k? Much of our so-called service spend goes on those who no longer give service and who could have afforded to made far greater provision for their own retirement! One thing we should do is force the public sector to have a stake in the private sector by giving them oney purchase schemes like the rest of us have to live with…These people have no stake in the rea economy – ditto the Labour party and seemingly much of the coalition.

  15. michael read
    Posted February 18, 2011 at 4:52 pm | Permalink

    Trees. No comment, ehhh?

    Public/private … yes, it does matter. It matters enough to put you out of Wokingham.

    Isn’t it time you got a sense of humour.

  16. zorro
    Posted February 18, 2011 at 5:58 pm | Permalink

    John, thank you for Dr Spendlove’s letter….they always make me smile, mainly because I readily recognise the sentiment and mindset behind them.

    ‘the cash increase will entail substantial and difficult reductions in various areas, and some redundancies’………God forbid that these people could actually run a business with increasing resources and manage to keep staff gainfully employed…no, even with increasing resources, they need to cut staff……because the money is being spent on ‘charity’ and that model of financial probity, the EU….and, of course, the EU buy up of Eire.
    Of course, we must make people expensively redundant rather than relying on natural wastage because we have committed the ‘savings’ to invest in a new IT system which will make processes more efficient when we eventually trust it after continuing with the manual processes (well, actually the IT system will be more expensive than expected, will have a far smaller scope than envisaged, and will eventually not work).
    Oh yes, any new reform requires a new IT system which will need big up front investment and will claim to deliver totally spurious benefits in the future.
    Of course, any present reform will be put off in the long grass to avoid unnecessary controversy or will be quietly shelved/revisited, particularly as the government has shown its robust nature when dealing with the ‘private’ trees and woods……
    Yes, Dr Spendlove is very much alive and well and ready to advise Mr Ted…sorry David Cameron

    zorro

  17. grahams
    Posted February 18, 2011 at 9:45 pm | Permalink

    From: Cabinet Office global prestige unit.

    Dear Dr Spendlove, I regret to inform your that your wise note to Dame Lucy has been published on the internet by REDileaks. Having taken the opportunity thus afforded to peruse it, may I respectfully suggest that you have not yet mentioned the issue most urgent for this office.

    The Coalition has committed to maintaining or raising the UK aid budget in real terms. As a result of our progressive aid policy, however, little of this aid is spent in sterling. Unfortunately, the depreciation of sterling has therefore cut the real value of our aid budget by approximately one quarter.
    Unless the UK Government is to betray some of the poorest people in the world, let alone damage our prestige in global compassion circles, it is vital
    that the Cabinet’s clearly expressed wishes should be followed. This will necessarily entail a rise in the aid budget of at least 33 per cent in crude cash terms.

  18. Javelin
    Posted February 19, 2011 at 12:21 am | Permalink

    Doesn’t it all sound like a Government who is fiddling one set of bad figures only to show another set of equally bad figures, whilst Rome burns. They are in the belief the recovery will be pain free. House prices will fall, standard of living will fall – every joule of uncompetitveness sapped out of this country by New Labour must be clawed back painfully from those we had given it to so freely.

    Below the current contradictory status quo I also sense a ground swell of objection from the next generation who have been priced out of education, houses and jobs. I can see the youth having radically different views to the baby boomer generation. I don’t see the middle east as the only area where revolt against incumbents interests is being stoked.

  19. Tedgo
    Posted February 19, 2011 at 11:32 am | Permalink

    It always worries me when their is talk of the new purchasing consortia for the GP’s practice. One immediately thinks of the bloated top heavy organisation set up for MP’s expenses.

    What is really needed in each GP’s practices is a hand full of buying clerks and a couple of accounts clerks. When a patient needs an operation the buyer phones the local hospitals to confirm the prices and more importantly when the operation can be done. With the doctor and patient’s agreement the buyer then places the order. Later the accounts clerks process the invoices from the hospital. Simple.

    GP practices must avoid getting hooked in to consortia gravy trains, and in particularly getting contracted in to a set number of procedures a year for a slight price advantage. Invariably those contracted procedures have to be payed for even if they are not carried out. Treat the hospitals and other medical providers like we treat Tesco’s and Sainburys.

    • alan jutson
      Posted February 19, 2011 at 5:20 pm | Permalink

      Tedgo

      What you outline is absolutely correct.

      After proffessional diagnosis and agreed treatment, it should be but a simple task to confirm costs, place an order, check treatment is satisfactory (by a proffessional again) and then check and pay an invoice.

      Normal administratuion staff should suffice.

  20. Anne Palmer
    Posted February 20, 2011 at 8:32 am | Permalink

    D’you know John Redwood, the REALLY frightening thing about this letter, is that we (and even scarier than that is that you are afraid to publish this response to you spoof) can’t really tell whether it is REAL or Fiction. For what YOUR Government is doing at the moment really is destroying this Country.(and even scarier than that is that it seems as if you are afraid to publish this response to you spoof for this is the second time of trying)

    Is the proposals in the Localism Bill fiction TOO? What do you think the people will do when they find out they are expected to contribute to EU fines? Maybe we will al, stop paying our taxes for a start eh? Is this a joke for there are over 400 pages of this plus its “pretendy” Mayors-until we elect our own, as if we can afford them too!!!

    Make provision about the functions and procedures of local and certain other authorities; to make provision about the functions of the Local Commission for Administration in England; to enable the recovery of financial sanctions imposed by the Court of Justice of the European Union on the United Kingdom from local and public authorities; to make provision about local government finance; to make provision about town and country planning; the Community Infrastructure Levy and the authorisation of nationally significant infrastructure projects; to make provision about social and other housing; to make provision about regeneration in London; and for connected purposes.
    Part 2
    30 EU Fines. Power to require local or public authorities to make payments in respect of certain EU financial sanctions.
    (1) In this part “EU financial sanction” means a lump sum or penalty payment (or both) imposed after the commencement of this Part by the Court of Justice of the European Union under Article 260 of the Treaty on the Functioning of the European Union
    (2) A Minister of the Crown may require a local or public authority to make a payment of an amount determined by the Minister in respect of any EU financial sanction imposed on the United Kingdom.
    (3) The requirement to make a payment under this Part must be imposed by an EU financial sanction notice under section 32 given by the Minister to the Authority concerned after complying with the requirements of section 31.

  • 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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