The government has outlined its first detailed plans for saving £6bn across the public sector - and has warned that its cuts will send a "shockwave" through Whitehall.
The biggest cut, by percentage, falls on the Department for Business, Innovation and Skills, which must lose a huge £863m from its budget - that's a 54.6% drop from its 2008-09 budget of £1.5bn, according to the Guardian's outline of the cuts.
It is perhaps ironic that one of the first acts of a government pledged to cut bureaucracy and quangos is the setting up of a new body.
The efficiency and reform group, chaired jointly by David Laws, the chief secretary to the Treasury, and Francis Maude, minister for the Cabinet Office, is the new government's cuts watchdog, which will, said Laws, impose a "draconian" regime, which would send a "shockwave" through Whitehall.
The group, which will comprise both civil servants and representatives from the private sector, and whose work will apply to both Whitehall departments and arms' length bodies, has outlined its priorities:
• conduct centralised procurement for commodity goods and services to drive down prices
• implement an immediate freeze on all new IT spend above £1 million
• review the government's biggest projects, including IT projects, to see where costs can be reduced or wasteful projects stopped altogether
• start renegotiating contracts with major suppliers across government to reduce costs
• freeze all new advertising and marketing spend. Only essential campaigns will be allowed
• freeze on all new consultancy spend unless it is an operational necessity. Where spend is proposed, ministerial sign-off will be required for £20,000 or above
• cut spend on civil service expenses, including a clampdown on first class travel and on the number of government cars
• freeze civil service recruitment, except in important frontline and business critical areas, and significantly cut the number of temporary staff
• conduct an immediate review to create a more simplified approach to civil service pay structures and terms and conditions
• implement a programme to simplify HR functions across Whitehall and, wherever possible, eradicate duplication; and
• stop the signing of any new property leases or lease extensions unless they are approved centrally
Whitehall departments have now begun to outline their individual spending cuts. Some commentators have warned that there may be little flexibility for permanent secretaries to protect their departmental priorities. "The headline numbers are clearly grabbing the attention, but departments need to be clear on what their focus will be in the next two or three years," comments John Howarth, public sector expert at management consultancy Hay Group.
"One lesson we have learned from working with private companies during the recession is that those that have done well have done so by re-affirming their sense of purpose. There is a risk of tying managers' hands."
Howarth also says the civil service recruitment freeze could have a similar effect. A blanket ban on replacing civil servants could run the risk of critical roles not being filled.
However, Professor Colin Talbot, professor of public policy and management at Manchester Business School, says Whitehall has done "rather well, so far".
He says that although measures such as the freeze on first class travel for civil servants are "meant to convey the idea of shared suffering", the figures show that most of the cuts will come from elsewhere, including nearly £3bn from consultancy, IT and property, where the burden will fall largely on private suppliers; £1.165bn from local government; £600m from quangos; and £704m from the devolved administrations in Scotland, Wales and Northern Ireland.
Talbot calculates that the proposals will result in almost 100,000 job cuts, across the public and private sectors, but says the job freeze in Whitehall will account for only about 2,400 of those posts.
There was some attempt to sugar the bad news pill for local government. Announcing the cut of £1.65bn from council budgets, the Chancellor, George Osborne, said ringfences would be removed from about £1.7bn of grants to local authorities this year, which he said would give councils greater flexibility to re-shape their budgets.
From Bubb's Blog
From Whitehall Watch
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