The Chancellor in his speech to conference last week stated that he is now onto the productivity problem in the public sector I have been highlighting:
“We need a more productive state not a bigger state.
If we increase public sector productivity growth by just half a percent, we can stabilise public spending as a proportion of GDP. Increase it by more and we can bring the tax burden down.
Half a percent.
For those of us with private sector backgrounds that doesn’t seem too much, does it? In the public sector, I’m telling you, it’s harder – but we are up for the challenge.
So I’ve commissioned my deputy, John Glen, to restart the process of public service reform.
He wants to know why teachers say more than half of their time is not actually teaching.
…why police officers complain they spend longer filling out forms than catching criminals.
…and why doctors and nurses say they spend up to half their time not with patients but on admin.
Of course we need modern working practices and better IT. But the Treasury too needs to change its focus from short term cost control to long term cost reduction.
And we’re going to start with the Civil Service.
We have the best civil servants in the world – and they saved many lives in the pandemic by working night and day.
But even after that pandemic is over, we still have 66,000 more civil servants than before.
New policies should not always mean new people.
So today I’m freezing the expansion of the civil service and putting in place a plan to reduce its numbers to pre-pandemic levels.
This will save £1 billion next year.
And I won’t lift the freeze until we have a proper plan not just for the civil service but for all public sector productivity improvements.
That means, amongst other things, changing our approach to equality and diversity initiatives. Smashing glass ceilings is everyone’s job – not a box to be ticked by hiring a diversity manager.
But I’m going to surprise you with one equality and diversity initiative of my own, trust me you’ll like this one: nobody should have their bank account closed because someone else decides they’re not politically correct. We’ll tighten the law to stop people being debanked for the wrong political views.”
The government should aim to recoup the lost 7.5% of productivity since 2020 as quickly as possible. Freezing civil service posts will both help raise productivity as natural wastage brings numbers down, and will act as a stimulus to the senior managers of public services to hasten the restoration of the levels of productiv9ity hit in the last decade and lost so far this. There is a £30 bn saving to be won from just doing things as well as the government did in 2019.