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.