In the debate on thursday on Public Spending Labour pressed home an attack on the question of how many people will lose their jobs in the public sector as a result of the cuts Everyone seemed to accept the Office of Budget Responsibility’s figures that over the next four years there will be 490,000 fewer jobs than today, which may or may not be true.
I pointed out that you could reduce the numbers by 490,000 without a single redundancy. According to government statements, natural wastage runs at much higher levels than 490,000 over four years. Labour asserted that all the jobs would be redundancies. Ministers did not immediately latch on to my suggestion and deny the Labour figures.
I was surprised by this. After the debate I asked Ministers what the true figure of redundancies will be and why they are so coy about it. After all, it is a perfectly reasonable Labour question to know how many such job losses taxpayers may be funding.
The answer I was assured is they do not know. Ministers do not know because they have apparently asked civil servants to review the spending figures and then to recommend to them how they will meet them, including recommending the balance of job losses between natural wastage and redundancy. Parliament will be told after Ministers have been told.
I think Ministers should tell civil servants they wish to maximise the amount of the adjustment undertaken by natural wastage. They should want a special case to be made where redundancies are thought to be necessary. Redundancies are not pleasant for staff, and Ministers need to get their officials onside for the task of delivering more for less. Redundancies are costly for taxpayers. Why do we want to pick up the bill for the payments, if we can achieve the same result for less cost by using natural wastage? Transferring more people onto early retirement is also far from being a cost free option, given the state of public sector pension funds. Voluntary redundancy schemes often result in the loss of some of the best people, taking a large cheque with them to go into a different job elsewhere.
The government needs to control the costs of slimming as well as the costs of everything else. Ministers need to keep control of the job loss programme. If they let civil servants control it it may turn out to have substantial up front cash costs we cannot afford.