Controlling the overhead

 

Here’s a Coalition policy many of you will agree with!  They have said they intend to cut the costs of the administrative overhead in each department of government by 30% over the planned five years of this Parliament. This either cuts the deficit or pays for more useful spending. The issue is, how are they getting on with implementing it?

Much of the overhead is the pay bill for officials and quango administrators.  I thought I would have a look to see how some departments are getting on. I started with the two I thought would be the most reluctant to get on with this policy.

Energy and Climate Change show that they had 2724 employees in 2010-11. This had risen to 2914 in 2011-12, an increase of 190 or 7%.   This was despite giving 118 people exit packages in 2010-11 at a cost of £6.9 m to the taxpayer, and  23 exit packages in 2011-12 at a further cost of £802,000.

The Department for International Development  says its 1568 employees at March 2011 had risen to 1655 by March 2012, a rise of 97 or 6.2%.  Elsewhere in its annual report, it says its 2372 employees in 2011 had risen to 2449 by 2012. Either way, there was an increase. This was despite  offering 70 people exit packages at a cost of £3.5 m to the taxpayer in 2011-12.

Over at the Department for Environment, Food and Rural Affairs there has been a bit more success in cutting numbers. Total employee numbers are down from 26,925 in 2010-11 to 24,955 in 2011-12, a fall of 1970 or 7.3%.  This is after agreeing 2194 exit packages at a cost of £89.3 million.

You would have thought the obvious way to get numbers down would be using natural wastage. It should be possible to cut the workforce by  say 5% per annum without having to agree any voluntary severance programmes, simply by freezing most recruitment and promoting internally where appropriate and necessary. This would still leave scope to replace some other leavers with special skills or in special categories. We have read recently that leaving rates are currently high in the civil service, at over 9%.

It does seem that some government departments are off the pace on cutting their overhead, failing to bring staff numbers into line with the new realities. It also seems that some departments are delivering what reductions they are achieving the most expensive way, by agreeing generous pay offs to volunteers to go. That can be a way to lose some of your brightest and best people who are employable elsewhere and like the idea of a lump sum to go. It would be good to hear from Ministers  how they think government as a whole is getting on with this interesting policy.

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100 Comments

  1. Gerry Dorrian
    Posted August 27, 2012 at 5:16 am | Permalink

    I think you’ve hit the nail on the head with natural wastage: forget redundancies, just don’t recruit. In a few years, the Civil Service headcount will be significantly lower. The PM needs to learn to play a long game.

    • davidb
      Posted August 27, 2012 at 9:50 am | Permalink

      He is playing a long game, he’ll be a Lord in 3 years…

      • Jerry
        Posted August 27, 2012 at 8:00 pm | Permalink

        @davidb: Shouldn’t that be the EU?…

    • Disaffected
      Posted August 27, 2012 at 10:09 am | Permalink

      He needs to learn basic economics to cut the spend and waste policies he continues to promote. Half way through office and NO change from Labour. Queen’s speech announced a further 6 quango’s- there was going to be a bonfire of quangos. In the DT it was reported a couple of days ago how he would stop the “crazy” bonuses of Whitehall staff a few years ago and the DT goes on to cite how it is still rife- undeserving bonuses to people who lead and provide inadequate services, including some from the Cabinet office.

      Cameron does not have a clue on the economy or how to make cuts. This is evidenced from this and many other articles. Spending is going up as you regularly cite. He sees Boris as a threat because he points the obvious out to him and unlike Cameron Boris has charisma and an endearing ordinary quality that people can relate to not a false persona with empty promises. Cameron could learn a lot from him.

      Questions are asked about reshuffles; whether there is a swing to the right or left, middle ground, centre left, centre right, the perception of Tories etc. People do not care. It is the common ground they should focus on. Not minority causes that are irrelevant to the plight of the country- they can wait. People from ordinary backgrounds, irrespective of ethnic origin, gender or class, expect sensible action to be taken so it pays to work, lower taxes to spend their money as they want, jobs for British people, public services for British people, laws made by the UK for the UK. In every key policy issue Cameron and Clegg have failed and are completely out of touch.

      And do you what John, it is not hard to achieve electoral success. Cameron and chums are stuck in the thoughts of a Westminster bubble that the people do not care about. A self serving system created by politicians, as you inadvertently highlight in your piece, where bonuses and pay offs are freely given to undeserving civil servants. The public have come to loathe Westminster for its corruption and the self-serving interest of MPs while the system does not make any difference to their lives, it only leaves them without a job or financially worse off.

      • Andy
        Posted August 27, 2012 at 4:24 pm | Permalink

        I think it was Nigel Farage who called Cameron, Clegg and Miliband ‘a bunch of college kids’. And that is the problem. None of them have done anything except be a damn politician (sorry John) or ‘researcher’. Well maybe if they had had proper jobs in the real world we wouldn’t be in this mess.

        What we need are business people drafted in to run government departments with a brief to go through the accounts line by line. Doing that you could save billions upon billions.

    • lifelogic
      Posted August 27, 2012 at 11:53 am | Permalink

      Why not just cap pay offs at say £10K (for the private sector too) and just get rid of the 50% who do nothing useful or are not needed.

      We cannot afford to wait for natural wastage.

      • Bazman
        Posted August 27, 2012 at 3:02 pm | Permalink

        Then rehire them all on expensive contracts via agencies when it is realised that they are actually needed.

        • lifelogic
          Posted August 27, 2012 at 4:46 pm | Permalink

          I was talking of the 50% who are clearly not needed at all or worse the ones who just do things that are positively harmful or merely inconvenience the productive.

          • uanime5
            Posted August 28, 2012 at 6:58 pm | Permalink

            There’s no Government organisation that can function just as well with half its staff. This was proved when cutting the Border Staff resulted in long delays until more staff were hired.

          • lifelogic
            Posted August 30, 2012 at 9:32 pm | Permalink

            Many government departments would be better with no staff at all after all many are just a nuisance.

        • Jerry
          Posted August 27, 2012 at 8:07 pm | Permalink

          No, if they really are needed again just (re) employ them on new -rolling- short term contracts, no need to involve agencies like Mr Blair’s Labour government did.

          • Bazman
            Posted August 28, 2012 at 5:27 pm | Permalink

            You expect them to be just sitting around waiting for the government to employ them whenever they feel like it? No skills involved? Right. You probably see no skill in anything though. The the 50% you pull out of the air has turned out to be not real as so many had to be rehired when no even a fraction was made redundant. Not to mention the cost of unemployment benefits and lack of tax and spending power of a reduced state workforce.

  2. Kevin R. Lohse
    Posted August 27, 2012 at 5:18 am | Permalink

    The Civil Service are once more running rings round an unpopular (to the CS) government policy, seeing the requirement for a reduced head-count off in the time-honoured fashion. I wonder how many of those who volunteered for redundancy have been re-employed elsewhere in the CS?

    • backofanenvelope
      Posted August 27, 2012 at 8:35 am | Permalink

      Roughly one third of the headcount reduction by our county council were redeployed to other areas of government service. I don’t see why it should be any different elsewhere.

      • lifelogic
        Posted August 28, 2012 at 6:59 am | Permalink

        Indeed large pay offs then re-employing them just look like large a pay increase and part tax free too. No double very popular with the civil servant involved.

  3. Adam5x5
    Posted August 27, 2012 at 6:25 am | Permalink

    The government departments will be behind on trimming their staff until they are forced to – the way it it going, it will be the IMF that forces the changes on the country as we spiral into a debt crisis.

    The reason for this is that, unlike in the private sector, the public sector has a culture of “How do we spend our budget?” instead of “How do we minimise our costs for maximum benefit?”
    All because the public sector budget comes in every year under the threat of prison.

    Get rid of the culture prevalent in the public sector of having to spend the entire budget or it gets cut – replace it with an incentive scheme of workers getting a share of any savings.

    Also, force the state sector to cut staff. As soon as any cuts are announced it’s a case of “It’ll impact services” because they cut services, never staff. Force them to lay off the crap staff instead.
    Not even going into the numerous services the state sector shouldn’t be providing.

    • Timaction
      Posted August 27, 2012 at 11:56 am | Permalink

      The current crop of Political leaders, Ministers and their respective “Sir Humphries” couldn’t and can’t run a whelk stall. We need politicians with backbone and extensive life experience outside of the Westminster bubble who can work out how to make appropriate cuts to meet their targets. Normal people who understand patriatism and national interest. How English people think and tick, their hopes and dreams and how they can be supported. This current crop are all in favour of the European Superstate, mass migration, green super taxes, the International Health, education, housing services and all the other things they provide having extorted this from us by direct and stealthy taxes. We need real change in this Country and soon. We are visably dying as a nation, deliberately engineered by our politicians at the behest of their masters in Europe who don’t want sovereign states but regions of their undemocratic superstate.

  4. Trevor
    Posted August 27, 2012 at 6:43 am | Permalink

    Thanks for labelling me and my family as an “overhead” and for ruining our lives. You must be very proud …. well done.

    • Adam5x5
      Posted August 27, 2012 at 8:58 am | Permalink

      Anyone who works in admin (HR for example) is an overhead.

      Only people making the products or services which the company sells are making money for the company.

      Indeed most people have some element of admin in their jobs – timesheets, admin e-mails, etc. these are overheads, but some are also necessary for the company to function. (I would dispute the necessity of a special diversity officer)

      the problem is the state sector is over-bloated with these types of jobs that do nothing but inconvenience the public and cost us money.

      Any business or state entity should minimise these overheads.

      • uanime5
        Posted August 27, 2012 at 6:52 pm | Permalink

        So since the senior executives don’t make the product or service they’re not making money for the company? If so then why are they always given bonuses?

        • Adam5x5
          Posted August 28, 2012 at 5:23 am | Permalink

          That depends on the nature of their role.

          If they are actively engaged in securing business for their company, then they are not an overhead.
          If their main function is to run the company e.g. to check the finances are being run correctly by the staff, then they are an overhead.

          It is not a question of how high you are in a company, it is a question of whether your job is one of those that is necessary to keep a company running, but not involved in producing a product/service.

          Obviously this is something of a simplification, but it gets the idea across.

    • alan jutson
      Posted August 27, 2012 at 9:29 am | Permalink

      Trevor

      No need to be upset Trevor, the vast majority of people are overheads.

      The only people who tend to be profitable are salesmen ,who get orders, and production/servicing workers, who add value.

      Every one else is a net cost to a business.

      Thought you would know that.

    • A different Simon
      Posted August 27, 2012 at 10:22 am | Permalink

      Trevor ,

      The scope for saving money by reductions in numbers if in-house staff would appear to be limited to me as so much of the budget goes on long-term contracts with consultancies and suppliers .

      I am concerned that in Westminster , Whitehall , Quango’s the BBC that there appears to be a massive fifth column with it’s own agenda to give away what remains of our sovereignty . I suspect that this fifth column is not specific to the UK but supranational .

      From your reply I gather you work in the civil service . Do you recognise such a fifth-column ? If so is it just at senior level or does it permeate every level of departments ?

      Thanks

    • outsider
      Posted August 27, 2012 at 11:21 am | Permalink

      Dear Trevor,
      All of us who are employed as permanent staff in the public or private sectors are overheads. It is not an insult. And if Mr Redwood’s advice had been followed from the start, redundancies would largely have been avoided and any vacancies that really had to be filled (apart from technical front-line “overheads” such as doctors) would have been filled by redeployment within the public sector. Minimal pain for maximum gain rather than the other way round.

    • lifelogic
      Posted August 27, 2012 at 12:01 pm | Permalink

      I (and I assume JR) do not know what you do. But there is no doubt whatsoeven that many in the state sector are pointless overheads that just destroys real jobs in the private sector by simply rendering them uncompetitive.

      Surely you personally are in the best position to decide if your activity is worthwhile and productive on balance or not. Are you on overhead or are you producing efficiently something worthwhile and essential, that is best provided by the state sector?

      • Bazman
        Posted August 27, 2012 at 3:05 pm | Permalink

        The private sector cannot fill the gap nor ever will be able to do this in a modern society. You have had this pointed out to you a large number of times, but still continue with the fantasy that they could. Care to explain?

        • lifelogic
          Posted August 27, 2012 at 4:54 pm | Permalink

          You point it out endlessly, but it is so clearly a complete nonsense. There would be no real gap to fill as so much of what government does is pointless or worse, actively damaging.

          The state just need to stop actively killing the private sector in order for it to grow hugely.

          • Bazman
            Posted August 28, 2012 at 5:37 pm | Permalink

            Like roads. hospitals, welfare, police and so on. As I said the private sector cannot fill this gap if the plug was pulled. The state uses many private companies to carry out these vital services too and often their only customer is the state, so you would also be cutting the private sector creating a downward spiral and a worse quality of life for millions. You seriously think the private sector would just fill in the gap. Fantasy they where not even able to fill in the housing gap during the boom and don’t just quote over regulation as the reason for the gaps being unable to be filled. You are in your right wing fantasy world if you believe this. Taking us back to the 1900’s and Robert Tressell’s Ragged-Trousered Philanthropists England. You could not afford to live in your version of the world and are to pasty to compete. Ram it.

        • outsider
          Posted August 27, 2012 at 7:02 pm | Permalink

          Dear Bazman,
          Yup. It is easier to see if we get rid of this complication of the public and private sector.
          Suppose that all businesses are nationalised like the Post Office, as in socialism or even that all goods and services are produced like the NHS, as (I think) in pure Communism.
          The people can only consume as much as society produces, less administrative costs. If output does not rise as fast as administrative costs, consumption must fall. And the only way that consumption can rise is if output of goods and services rises and/or administrative costs fall. I have simplified by leaving out productivity gains but you see the point.
          Put it another way. The higher the proportion of the people employed in non-production activities (eg the army or working out the distribution of wages and benefits) the lower consumption per head. The higher the proportion employed in output of goods and services, the higher consumption (or living standards) per head.

    • Max Dunbar
      Posted August 27, 2012 at 1:49 pm | Permalink

      How many “overheads” do you have in your family? Have they always been “overheads”?
      Do you have any potentially useful members of the family who could contribute to the economy in the Creative Sector?

    • Bazman
      Posted August 27, 2012 at 3:06 pm | Permalink

      Anyone who expects to be paid is seen as an overhead in many companies. It is their idea and because of this do not have to share.

  5. Public Servant
    Posted August 27, 2012 at 6:50 am | Permalink

    Mr Redwood, I do not recognise the rates of churn or natural wastage of which you write. I struggle to think of the last person who actually retired at their pension scheme retirement age. People seem to be taking the government’s advice that we must all work longer to heart and continuing to work beyond normal retirement age. The other point is that whilst voluntary or compulsory severance comes at a cost there is always a compensating saving due to the non payment of the salary and the actuarially reduced pension which is payable. Most people give back the severance payment in total to try to offset the effect of actuarial reduction. I dont disagree with your general point that there is variation between departments.

    Reply. A leading Sunday paper claimed the Treasury rate of staff turnover is now running at 28 per cent! In my experience is is comfortably above 5 per cent in the public sector, which means there is no need for redundancies for the Coalition programme.

    • Steven_L
      Posted August 27, 2012 at 6:39 pm | Permalink

      I’ve seen a good few local government officers retire early in the last couple of years. I don’t know on what terms, but they were happy with them.

  6. Mike Stallard
    Posted August 27, 2012 at 6:52 am | Permalink

    “You would have thought the obvious way to get numbers down would be using natural wastage.”
    As, I remember, you pointed out at the very beginning of the coalition government…….

    Well done for fossicking out these fascinating figures.

  7. A.Sedgwick
    Posted August 27, 2012 at 6:58 am | Permalink

    No surprises then, the writing was on the wall when Sir Philip Green’s expected critical report was punted into the long grass. Our political system is so dysfunctional that any chance of putting people of his background into a Department of State with power to economise is nil, but that is what is needed.

  8. Pete the Bike
    Posted August 27, 2012 at 7:22 am | Permalink

    I wouldn’t be interested in how ministers think they’re getting on as a whole. I’d be interested in actual figures. I suspect that overall there are more people working for the government, in fact I suspect that is true every year. Also I think that very many are employed through quangos and private contractors so that they don’t count as public sector (but really are). I detect absolutely no appetite for real, noticeable cuts in anything. Nobody seems to think it’s important to sort our finances out despite Britain being the second most highly indebted country on earth in percentage terms if you do proper accounts and not the blatant fraud that government specializes in. One day, maybe very soon, the fertilizer will hit the air conditioning and then we’ll see a little more action.

    • A different Simon
      Posted August 27, 2012 at 10:31 am | Permalink

      The people at the top seem to have a very high opinion of their own importance and think rules governing propriety do not apply to them .

      Just read an article in the paper about Tory councilors in Wokingham standing on the board of Council owned companies and claiming directors fees of £6,000+ each .

      There is a massive conflict of interest when the same people material to approval of planning are directors of a social housing building and operating company .

      They appear to be resisting on the grounds that directors fees are justified – which they of course are – but their arrogance has blinded them to the fact that they should leave directorships of those companies to other people .

  9. lifelogic
    Posted August 27, 2012 at 7:23 am | Permalink

    Rather a pathetic picture, most of the Energy and Climate Change department does positive harm anyway in just pushing up energy prices hugely and giving out pointless grants to encourage daft house bling and pointless wind farms for no sound reason. At international development, how many people does it take to hand some free money out? The pay offs are too large and no doubt the pensions are too (often augmented with the packages no doubt). Let us, at least, hope that these people do something more productive after leaving. Rather than just using their inside knowledge and contacts to exploit the mad grants handed out further.

  10. alan jutson
    Posted August 27, 2012 at 7:59 am | Permalink

    Ah yes.

    Get rid of people in the most expensive way about £50,000 each using your figures.

    But as you say where then are the reductions for those who were going via natural wastage. (illness, retirement, moving job, moving home to another area, etc)

    1. There is less natural wastage now that there is no fixed /default retirement age.

    2. I wonder if those paid off were near to their retirement anyway (what an encouragement to go), a large lump sum when you are thinking of retiring anyway, meaning natural wastage (through retirement) for those left is now further down the line as they have now effectively reduced the age of the work force by a fraction.

    3. Fixed employment may be down, but how about consultants and advisors, many of whom could be those already paid off, have they also decreased or increased.

    30% was an excellent target, but the truth shows failure to move towards it in the figures.

    A failure to progress cost saving seems to be a feature of this government, as it has for many governments before.

    The staff seem insulated from the real world.

    The three examples I give, are facts drawn from a family member where so called reorganisation has already taken place in a government (taxpayer funded) organisation.
    They now want to recruit additional labour because there are not enough people left to complete the work as before.

    The basic fact that you do not need to work exactly as before, seems to have escaped them for the moment !!!!!

    • Disaffected
      Posted August 27, 2012 at 10:25 am | Permalink

      Alan, they need to figure out which work does not need to be done ie a lot of the bean counting and compliance tick boxing. It strikes me that public service organisations are always keen to start a new squad or department without considering which one needs to be cancelled or altered to suite social, financial changes. This seems to emanate from the growth of ministerial departments

      For example, why was there a need for a huge increase in the amount diversity officers across all public sector bodies to fulfil the Government’s Race for Equality schemes (and targets) when the function and role could be conducted by the existing HR team?? Ministerial department could also be merged to save money. No need for a separate International Development, Department for Energy and climate Change, BiS etc etc. The mind set for public sector accounting has a lot of faults that could be radically overhauled and in so doing save a fortune to the taxpayer.

      Until politicians, and specifically ministers, are able to scratch below the surface of the detail and stop accepting what they are told by civil servants then this folly will continue at huge expense to the taxpayer. Cameron is so way off the mark it is difficult to see why he is fit for purpose as PM. Contrary to his own thoughts, he is not good at it.

  11. Rebecca Hanson
    Posted August 27, 2012 at 8:08 am | Permalink

    Any idea what’s happening at the DofE John? I heard they’d got around 250 people working on Free Schools….

    • Mark
      Posted August 27, 2012 at 12:49 pm | Permalink

      We thought you were the one who knew of all the sackings in that Department. Evidently, you have no facts to back your earlier assertions.

      • Rebecca Hanson
        Posted August 27, 2012 at 2:54 pm | Permalink

        When you get rid of people form your employment do you officially say that they were sacked Mark or do you agree with them that they are moving on for personal and professional reasons?

        If you stop employing people who are employed as associates and therefore employed on a job by job basis you don’t even need to discuss why they no longer work for you.

        I do accept your point and will in the future use the phrase ‘got rid of’ rather than sacked. Of course I do also accept that some of the people who left left not by force but through simply being unable to bear being in a department run by Gove.

        • Steven_L
          Posted August 27, 2012 at 6:50 pm | Permalink

          The thing with civil servic policy generalists, is that they should be able to work in any department under any Minister. They are there to consult stakeholders and experts as required and report back to Ministers. Then it is up to the Minister (and the Cabinet / Parliament) to decide what actually happens.

          No proper impartial civil servant should have a problem with this. It sounds like the people you are talking about are ‘quangocrats’. Let me guess, folk who moved on from actually teaching children into having meetings and writing glossy policy brochures on obscene salaries about how they think it should be done in quango-policy land?

          Maybe they should just go back to teaching kids if they care so much about it. As if they can’t work under red, blue and yellow governments they should not be civil service policy officers.

          • Rebecca Hanson
            Posted August 28, 2012 at 10:23 am | Permalink

            Civil servants who had enough knowledge of education to understand how consult policies until they would work and get them implemented were replaced with civil servants who did not have these skills Steven.

        • Mark
          Posted August 28, 2012 at 9:00 am | Permalink

          Well, I found some numbers here:

          http://media.education.gov.uk/assets/files/pdf/d/annual%20report%20and%20accounts%202010%2011.pdf

          on page 18 – needless to say, not explicit numbers, but they can be derived from the diversity statistics via the percentages. The accounts are more than a year out of date, but they do include some target staff numbers for 2013 as well as some history that goes back to 2009.

          They reveal that the Senior Civil Service numbers were 119 in March, 2010, but are projected to increase to 126 in 2013, while “feeder grade” numbers are planned to increase from 721 to 726.

          Overall numbers including the junior grades were 2,586 in March 2011.

          Not much evidence of a cull there, I suggest.

          • Rebecca Hanson
            Posted August 28, 2012 at 10:21 am | Permalink

            Thanks for your efforts Mark.

            Why was it so essential then that core provisions like Teacher TV (vital for sharing best practice and dissemination information about new policy – both of which are now a nightmare to do) and becta (understanding innovations in technology in education to help with balanced policy making) were instantly shut by Gove?

            Do you think it was nothing to do with Murdoch’s media interests and News Corp’s clear intention to dominate global technology in education?

          • Mark
            Posted August 28, 2012 at 2:12 pm | Permalink

            I would suggest that Pearson (publishers of the FT, and run by Marjorie Scardino) has a far stronger position in the UK education market than News Corp. They own examination provider Edexcel, who seem to have been a favourite of the previous government. Pearson have infiltrated via the BBC as well into BBCActive.

            http://uk.pearson.com/

            News Corp. appear to be looking first at the US market, with their “Amplify” pilot project. They are really a rather small force at present, with no UK education presence.

            http://online.wsj.com/article/SB10000872396390443437504577545330482818646.html

          • Rebecca Hanson
            Posted August 28, 2012 at 8:50 pm | Permalink

            I’m really interested in trying to map out this area if you’d like to help me Mark.

            So at the time Gove was chatting to Murdoch, Murdoch was doing this:
            http://www.ft.com/cms/s/0/f9260e1a-f6b7-11df-b434-00144feab49a.html#axzz24sL6dAtH
            – acquiring Wireless Generation and appointing Joel Klein to his board.

            Please do feel free to write about Pearson too.

            The

          • Rebecca Hanson
            Posted August 28, 2012 at 9:00 pm | Permalink

            🙂 Please excuse ‘The’!

            Joel Klein got a bit distracted from his Education brief after he joined News Corp – didn’t he? I knew I’d hear that name somewhere outside education……

  12. oldtimer
    Posted August 27, 2012 at 8:15 am | Permalink

    From your data, DEFRA has achieved the remarkable feat of paying for 2194 redundancies (correction: “exit packages”), at a cost of £89.3 million, yet only reduced its overall headcount by 1970. Clearly this is another master stroke by the “Rolls Royce” civil service.

    The results for DECC and DfID are a measure of the misplaced priorities and policies of this government. It is now looks beyond hope.

    • lifelogic
      Posted August 27, 2012 at 12:04 pm | Permalink

      Indeed a farce.

  13. Robert K
    Posted August 27, 2012 at 8:45 am | Permalink

    Thank you for lifting the blanket on this. Funny how this sort of story is never analysed in the mainstream media.

  14. MajorFrustration
    Posted August 27, 2012 at 9:06 am | Permalink

    Excellent policy (presume this was a Tory policy and not just words) but if you leave the implementation to the turkeys then dont expect them to vote for Christmas.

  15. Denis Cooper
    Posted August 27, 2012 at 9:16 am | Permalink

    If the aim is to reduce the total civil service establishment through natural wastage then clearly there should be a general ban on external recruitment, with necessary exceptions requiring high level authorisation on a case-by-case basis.

    The question is how high you’d have to go to find somebody who would take the policy seriously and implement it ruthlessly, and it may be that some departmental ministers need a kick up the backside from Osborne.

    A sharp reminder from Osborne that he is still having to borrow about a fifth of all the money the government is spending, and that at some point he will have to stop arranging for the Bank of England to help him out through QE.

    However a ban on external recruitment would not prevent internal redeployments within and between departments, so I think you have to be a bit careful about quoting numbers for particular departments rather than looking at the overall numbers.

    Incidentally it seems that we do have a Minister for the Civil Service, who might take an interest in this: his name is David Cameron.

  16. j goodchild
    Posted August 27, 2012 at 9:28 am | Permalink

    Disgusting behaviour at climate. Change and international.development depts. Not suprised one bit it is these two. They are both a waste of money. shut the departments down. that would save money. People with big redundency pay offs due should be offered jobs in important departments until retirement. what a waste!

  17. Brian Tomkinson
    Posted August 27, 2012 at 9:36 am | Permalink

    When politicians make their election pledges and produce their manifestos it is a form of mis-selling, as generally they don’t carry out what they promised. If this were a company or a bank those same politicians would have them fined and forced to pay compensation to their customers. Our only retribution is to not vote for them but as they are all the same we are effectively powerless.
    I see that that your ineffective immigration minister, Damian Green, says that your party must now pass the “Danny Boyle test”. There is confirmation, if any were needed, that yet more election pledges are being dumped. As you previously advised me, this may not be your government, but it is still your party and heading for the rocks.

    • forthurst
      Posted August 27, 2012 at 4:01 pm | Permalink

      The Conservative party has lost the plot completely. They stand for Cultural Marxism (multiculturalism, third world immigration, affirmative action, gay marriage etc etc), neoconservative wars, the Climate Warming Hoax, an ever expanding and controlling EU towards Global governance, the consequent destruction of England and the English people.

      Scratch the surface and the usual suspects will drop out with all these destructive ‘isms. If the Conservatives want to be judged by whether they can wreck the country faster than Labour managed, then so be it, but there aren’t many Conservative votes in it and there will be no votes from anywhere else.

  18. Ferdinand
    Posted August 27, 2012 at 9:37 am | Permalink

    What sort of response would a letter on these figures from you to the PM and the Chancellor receive ?

    • Brian Tomkinson
      Posted August 27, 2012 at 5:17 pm | Permalink

      A two word response, the second of which would be “off “!

  19. Leslie Singleton
    Posted August 27, 2012 at 9:38 am | Permalink

    How many redundancies walk right back in to the same or similar jobs but on a contract or consultancy basis? A good few I’ll warrant as they chase their tails achieving nothing at best.

    But I am sure my opinion doesn’t count for much because I must be very naive.

    1) Why do we need Climate Change (intrinsically ridiculous anyway) and Environment in different departments? Bonkers.
    2) (Especially ignorant, this) What does the Department for International Development do and if it does do something (unlikely) why cannot the Foreign Office do it? More bonkers.

    God help us.

    • Leslie Singleton
      Posted August 27, 2012 at 2:35 pm | Permalink

      Just to make clear, when I referred above to especial ignorance I was referring to myself for I really had never heard of “International Development” as such and cannot begin to imagine why we need a Government Department for it on any basis. Bonkers in spades.

  20. Duyfken
    Posted August 27, 2012 at 10:00 am | Permalink

    The lesson we have is that one should never resign from a job – wait until redundancy is offered. That seems a general rule to follow, and one which should be strictly adhered to for Civil Servants in the present climate of “cutting the costs of administrative overhead”. There will be precious little natural wastage.

    It’s a little like selling off the gold reserves and announcing the intention to all and sundry to ensure the lowest price.

  21. David John Wilson
    Posted August 27, 2012 at 10:02 am | Permalink

    Natural Wastage?

    A major improvement in staff costs in government agencies would be to ban the re-employment of retiring staff as consultants. In many agencies staff in middle management and above are virtually guaranteed a consultancy working about half their previous hours for approaching their previous salary. Now that there is no enforced retirement age they could continue to work reduced hours until they have successfully handed over their previous jobs.
    It is intreguing how many of these consultants manage to do their previous jobs working only a two or three day week.
    In my own case I was offered two days a week consultancy on almost full salary to help another external consultant pick up my previous job. I didn’t actually want to retire but this was forced by the need to reduce staff numbers.

  22. A different Simon
    Posted August 27, 2012 at 10:12 am | Permalink

    DECC need to recruit in order to regulate and monitor the much greater scale of onshore drilling and hydraulic fracturing which would accompany shale and tight rock hydrocarbon extraction .

    This would pay for itself with fees for inspections etc levied on the companies and passed on to their customers .

    • David John Wilson
      Posted August 27, 2012 at 9:38 pm | Permalink

      In doing so employing extra people to create more red tape and place more cost on the companies who are trying to profitably employ more people.

      It is this sort of attitude that is so wrong with current government and leads to its failure to reduce overheads. We need to find ways of decreasing regulation and monitoring not look for excuses to increase them.

      • A different Simon
        Posted August 28, 2012 at 9:45 am | Permalink

        David ,

        I’m invested in onshore O&G exploration companies and can assure you that the companies themselves have requested better regulation and monitoring .

        The last thing they want is an incompetent or unscrupulous operator ruining the whole thing for everyone .

        The Govt department does seem to be struggling to provide this regulation . This is hardly surprising considering that the juggernaut in Whitehall dismissed a fossil fuel future ten years ago .

        We must distinguish between red tape and good appropriate regulation which is beneficial . They are not the same .

  23. Andrew Johnson
    Posted August 27, 2012 at 11:17 am | Permalink

    Sums up the incompetence of this coalition government. Losses of many MP’s awaits it at the next General Election. Labour will win and pursue even worse financial policies. IMF will arrive and give Britain the surgery and medicine that is needed. This will be very painful for many people, and many people brought up in an entitlement culture will discover that the world does not own GB a living. History shows us that this is what happens when you elect politicians who have no vision, strategy or courage to do what needs to be done.
    Now, if only you were Chancellor of the Exchequer!

  24. Matthew
    Posted August 27, 2012 at 11:17 am | Permalink

    You highlighted this possibility two years ago- and pushed for natural wastage.
    Often, in small private industry redundancy payments are a luxury that can’t be afforded, they look for natural wastage, as far as in possible.

    In addition there is a constant move to reduce both direct costs and overhead through labour flexibility, new technologies – competition forces this process.
    With government the cash resources are there – so the easy option is taken and competition is missing from the equation.

    I wonder what became of the initiative two years ago involving Sir Phillip Green. At the governments instruction he looked at Whitehall spending. He concluded that ministers could cut £20bn from their budgets “without breaking sweat” and not axe one job.

  25. AlexBrod
    Posted August 27, 2012 at 11:56 am | Permalink

    Surely some of the headcount increase reflects employees coming off service contracts and back into full employment – e.g. Ed Lester of the Student Loans Company.

  26. Lindsay McDougall
    Posted August 27, 2012 at 11:57 am | Permalink

    There is a pattern:
    (1) It seems that politically correct ministries think they are exempt from the process.
    (2) Implementation has been in the manner that the civil service wants it to be.

    You could ask a Parliamentary Question asking when the Secretaries of State and their Ministers, at Climate Change and DFID, are going to be sacked for non-performance.

  27. Denis Cooper
    Posted August 27, 2012 at 12:17 pm | Permalink

    Off-topic and therefore brief.

    EUobserver reports today:

    http://euobserver.com/institutional/117333

    “Merkel wants EU treaty convention by end of year”

    I’ll let people read the article to find out what she wants this time, and will doubtless get one way or another without any resolute opposition from Cameron even if it’s against our national interests, and they can also try to work out how Hague will be able to prevent us having any say about it through a referendum.

    Which is what has happened with the EU treaty change that Merkel demanded in late 2010, as reported here on October 29th 2010:

    http://euobserver.com/institutional/31163

    “European leaders have given way to German demands for a change to the European treaties, but the procedure for the change and its size has been calculated explicitly to avoid the danger that it could provoke referendums in some EU states.”

    Next Monday the great majority of our MPs will bend the knee to the Empress Angela and vote to approve that radical EU treaty change which she demanded in 2010 and which was formally agreed by EU leaders on March 25th 2011; a small number might dissent and refuse to support the second reading of the Bill on a variety of grounds, including the absence of any provision for a referendum.

  28. Electro-Kevin
    Posted August 27, 2012 at 12:17 pm | Permalink

    I understand the need for cuts and will be exposed to them I’m sure.

    What we really need is the belief that our country is going to be turned around and its many problems (not just economic ones) are going to be addressed.

    Do that and you will have more supporters than opponents.

  29. Paul Danon
    Posted August 27, 2012 at 12:24 pm | Permalink

    The trouble with natural wastage is that the dead wood tends to stay. Better to have staff on three-monthly contracts. You can also vary pay by a wide margin to reflect management’s view of people’s performance. Ultimately, these departments must close.

    • Bazman
      Posted August 27, 2012 at 3:14 pm | Permalink

      Hardly promotes any loyalty and having three month contractors do the work of the ones who have left as well as their own is hardly going to go down well is it Paul? Once again you are relying on desperation. Not a good policy and if you found out that lazy guy next to you doing the same, but less work was on more money than you would you work harder? Like you Paul the bone idle management could ram it. Censor that or pretend the point has not been made.

      • Bazman
        Posted August 29, 2012 at 7:35 pm | Permalink

        This will be needing a reply.

  30. David Saunders
    Posted August 27, 2012 at 12:41 pm | Permalink

    One way to reduce the cost of government is to reduce the number of MPs as in the boundaries review. That the Lib Dems can sign up to reducing public costs and then torpedo the review is typical of their unjoined up thinking. Herding cats is simple compared to dealing with Cleggs lot.

    • uanime5
      Posted August 27, 2012 at 7:04 pm | Permalink

      One way to reduce the cost of government is to reduce the number of Lords as in the Lords review. That the Conservatives can sign up to reducing public costs and then torpedo the review is typical of their unjoined up thinking. Herding cats is simple compared to dealing with Cameron lot.

      You forget that the Conservatives killed the plans to reduce the number of Lords to 450, which would have save far more money than reducing the number of MPs to 600.

      • Disaffected
        Posted August 27, 2012 at 9:52 pm | Permalink

        No, the Tories killed an undemocratic proposal by Clegg to have AV through the back door to support Lib Dems remaining in politics. Mr Clegg then made claims that the Tories broke the coalition agreement, which they did not. AV was in exchange for Boundary reform. No surprises why no one believes a word Mr Clegg says.

        Is Mr Campbell as chancellor of a university still awarding degrees to EU students who have not paid any tuition fees in the UK while their English counter parts in their own country have their tuition fees increased to £9,000 per year giving them a life time of debt? This is contrary to everything the Lib Dems claimed they would do. Another reason not to believe a word a Lib Dem politician says.

        • uanime5
          Posted August 28, 2012 at 7:10 pm | Permalink

          Firstly the Lords was going to use PR, not AV. There is a big difference between them.

          Secondly the Coalition agreement says that both parties will reform the Lords, so the Conservatives broke the agreement when Cameron withdrew the bill despite overwhelming support for it in the Commons.

          Thirdly if the Conservatives refuse to obey the parts of the Coalition agreement they don’t like (Lord’s reform) why should the Lib Dems obey the parts they don’t like (boundary reforms)? As long as the Conservatives refuse to adhere to the Coalition agreement they’re in no position to criticise the Lib Dems for doing the same thing.

          Fourthly the Conservatives forced the Lib Dems to agree to the trebling of tuition fees, so don’t pretend that they weren’t involved.

          Reply: The Coalition agreement said they would look at possibilities for Lords reform. Mr Clegg was asked to produce proposals based on consensus, which he was unable to do.

  31. Sue Doughty
    Posted August 27, 2012 at 1:28 pm | Permalink

    Yes, John, this country just cannot afford these luxuries. Government and all who work in it has to get real. Get with the project and know, sorry, we cannot afford to keep all of you. But these payoff packages! What planet are they on?

  32. Jon
    Posted August 27, 2012 at 1:31 pm | Permalink

    I distinctly remember ministers saying the preferred option was natural wastage for many, I remember Theresa May a few times.

    I would assume that in practice that those departments not meeting the targets are not gifted more money by George Osborne. That would be rewards for failure and you don’t change behaviour that way.

    There should be a recruitment block for all but the most extreme of cases.
    Its the only way to force middle management to look at work that is no longer necessary and to re distribute resources. I expect there is a huge amount of efficiency savings in that area. Management consultants made no difference other than to drive costs up. The only way to get that part thinking and collaborating on how to do more for less is to put a block on recruitment.

    We have already heard of people with redundancy payoffs back working where they were. Natural wastage as said with a recruitment block so people or work is transferred. It will get the middle managers engaged into finding solutions and efficiencies and they may even find it rewarding to do.

  33. zorro
    Posted August 27, 2012 at 1:31 pm | Permalink

    Interesting policy indeed…! This must be one of the most depressing for people to look at. Natural wastage made eminent sense giving management the time to restructure and examine what work is done and what did not need to be done. Sensible predictions on staff attrition rates could have been made even if they were only 3%, it could have led to an almost 20% reduction over a five year term. However, as you say, leaving rates overall are higher (not necessarily a good thing if it is the better staff or a sign of demoralisation).

    Instead, we see these expensive voluntary redundancy packages with the potential for some people to come back in a few years. For example, at the Home Office, they got rid of just under a thousand experienced border staff in good time just before the busy Olympic period….and then realised that they had to train up other civil servants at short notice to deal with the queues……They are now asking for another 500+ border staff from scratch. What a waste of money when some sensible planning could have told them what was necessary.

    All very difficult to see the logic behind this…..

    zorro

  34. S Matthews
    Posted August 27, 2012 at 1:42 pm | Permalink

    If head of departments are paid performance bonuses, then the problem would be solved by making any bonus payments dependent of cutting costs by 5% annually as well as meeting other targets.

    • uanime5
      Posted August 27, 2012 at 7:06 pm | Permalink

      Once managers realise that the Government’s targets aren’t possible while constantly cutting staff don’t expect them to bother trying.

  35. Bob
    Posted August 27, 2012 at 1:43 pm | Permalink

    I heard on LBC this morning that responsibility for enforcing traffic regulations will be passing from the police to local authorities because the police are too busy (looking for escaped lions presumably).

    So, there will be no incentive to rectify poorly designed road layouts, as long as they keep catching unsuspecting motorists and raking in the fines, the more the merrier.

    • Bazman
      Posted August 27, 2012 at 3:16 pm | Permalink

      The same will happen as did with parking enforcement. When removed from the police. The system will not be about traffic regulation, but revenue.

  36. dominic miller
    Posted August 27, 2012 at 3:38 pm | Permalink

    Just cut the number of civil servants to 20% of current levels for each department. Take the immediate financial hit 9redundancy cost). Concentrate on key activities of importance to the country & at a stroke stop meddling by government in activities that are neither wanted or needed. Do the same for local government.

  37. Derek Emery
    Posted August 27, 2012 at 3:47 pm | Permalink

    The public sector is entitlement driven because in effect there is nobody in charge looking after the business as a whole and the accounts from the taxpayers point of view. They have got their hands on the money so are going to spend it.
    They are all on the same side so what else can you expect?

    Far far more of the public sector needs to be privatized as that is the only way of bringing costs under control. Much could be disposed of if criteria such as ‘value to money’ and ‘what difference there would be if this department did not exist’.

    The problem is the politicians themselves are from the public sector so are hardly likely to make the changes needed. They are far to soft and do not represent the taxpayers interests.

  38. Bert Young
    Posted August 27, 2012 at 4:36 pm | Permalink

    The only criteria to use is that of “Total Cost Per Department” . Reduction in headcount is devious and should not be used as an incentive . “S. Matthews” recommendation is the one I would support . I was involved many times in cost reduction exercises ; I cannot think of one that was successful unless it was based on “Total Cost” . Towards the end of the financial year , Government Departments would usually look at their costs to date , and , if there was an “underspend” , they would immediately institute a “speed-up” programme to make sure they were on target . If this practice still prevails , it should be banned forthwith . A 10% total cost reduction in each department is realistic and achievable – Sir Kenneth Sharpe and Sir John Banham would both agree to this recommendation .

  39. Bert Young
    Posted August 27, 2012 at 4:40 pm | Permalink

    I should have added that both Sir Kenneth Sharpe and Sir John Banham were heads of the Government’s Audit Department at one time .

  40. uanime5
    Posted August 27, 2012 at 6:48 pm | Permalink

    Given that privatising the NHS involves replacing over a hundred trusts with several hundred quangos that have a total budget of hundreds of billions of pounds I doubt the 30% target will be met.

    The problem with using natural wastage is that it’s slow, and prevents younger and brighter employees being hired. This problem is compounded if the brightest leave for better jobs because it can become impossible to replace the lost talent.

    Also Lansley isn’t taking a tough enough line against junk food manufactures, so expect the UK to have to spend more than the current £50 billion every year tackling this problem.

    http://www.independent.co.uk/news/uk/politics/lansley-has-caved-in-to-fastfood-industry-says-former-adviser-8082163.html

  41. David Langley
    Posted August 27, 2012 at 8:57 pm | Permalink

    What a waste of money and time. Disgusting. You have pointed out what is wrong with this government John. You have to get your pals together now and demand that the chancellor is sacked and Cameron toes the party line and really gets his act together. I expect big things from you guys or you are toast at the next election and everything in between.

  42. Max Dunbar
    Posted August 27, 2012 at 9:28 pm | Permalink

    Apparently 10% of NHS appointments are missed. No surprise there as it is assumed that it will always be as free as the air we breathe and treated accordingly.
    Charge patients for appointments – in advance. £10 per appointment (£50 if a translator is required for health tourists) The cost of a couple of pints or a few fags. GP surgeries also have to contend with time wasters in addition to those who don’t bother to turn up. Eliminating time-wasters and those who do not show up would mean fewer GPs and other health professionals would be required. Massive saving to the NHS in manpower costs but as this is stating the obvious it will never happen here.
    The socialist (Miliclegeron) solution? Pump more cash in to feed the bloated holy cow and its sagging udders.
    Perhaps a free lottery ticket with every appointment kept would be a realistic bribe and cheap at the price.

    • uanime5
      Posted August 28, 2012 at 7:12 pm | Permalink

      So you plan to punish the elderly and the those with chronic conditions by charging them until they’re bankrupt. Don’t expect any party that supports this to be re-elected.

  43. David Jarman
    Posted August 28, 2012 at 12:13 am | Permalink

    If this is not PROOF most politicians are on a different planet I dont know what does. The odd few decent politicians arent enough and now with technology we DONT NEED to be represented by someone else. If this generation doesnt demand it the next will. For a single person to “represent” 50,000 people in this day and age is way beyond a joke!

  44. Christopher Ekstrom
    Posted August 28, 2012 at 7:39 am | Permalink

    This whole exercise smacks of desperation.

  45. Ted Greenhalgh
    Posted August 28, 2012 at 8:32 am | Permalink

    A question for John. Does anyone in Government take any notice of what you write? From all the comments it would appear that they do not. So how do you get your voice heard?

    Reply: I regularly discuss policy issues with Ministers and colleagues. Sometimes ideas or improvements are taken on board. Sometimes general MP campaigns like the one to stop the government’s version of Lords reform are successful.

  46. REPay
    Posted August 28, 2012 at 11:03 am | Permalink

    The exit packages seem to be to reward senior people for securing employment in the private sector or to enable them to retire before their generous and largely unfunded pensions kick in. I recall a friend of mine having his Quango abolished under Mrs. Thatcher. He was given a huge payoff and started back in the Department he had come from the following Monday! The management of Civil service HR should be outsourced. They are not be trusted with their own remuneration and benefits.

    I am not surprised progress has been so feeble – and costly! Natural wastage is the way.

  47. John Orchard
    Posted August 28, 2012 at 4:14 pm | Permalink

    Lets face it how much money could be saved if this Government got some backbone. No more immigrants, no more wastage on Muslim radicals who have been found guilty in British Courts but are now appealing to the European Court of Human Rights costng us a fortune. No more overseas aid. I could go on for a lot longer but it becaomes boring as they haven’t the bottle to stop this outlandish waste. It’s a pity they the Cabinet hadn’t got the backbone of our Armed Services but there again why are they waisting there time in Afghanistan again not just the cost of Human life but billions in infastructure which the Taliban will take over in two years time.

  • 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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