Civil Service Job Cuts Likely to be around 40,000
I have been trying to understand the figures underlying the recent announcement of civil service job cuts. But I have been distracted by some travel and by the extraordinary events elsewhere in the world. Additions and corrections to the following would therefore be welcome.
The Chancellor's Spring Statement included the following:
My Right Honourable Friend the Chancellor of the Duchy of Lancaster is taking forward work to significantly reduce the costs of running government by 15%, worth £2bn, by the end of the decade.
The accompanying Treasury document said the following at para 2.45:
Government departments will reduce their administrative budgets by 15% by the end of the decade. Savings on back-office functions will total £2.2 billion in 2029-30.
And the press were briefed that:
The first step of this is to reduce the size of the civil service by opening a voluntary exit scheme. About 10,000 civil service jobs are expected to go, including staff working in HR, policy advice, communications and office management
I have emphasised the word 'first' because it is hard to see how the government could save £2bn a year without losing many more than 10,000 staff.
There is of course a lot of wriggle room in the phrases 'costs of running government', 'administrative budgets' and 'back-office functions'. And the government (perhaps deliberately) does not publish the annual cost of the civil service. Giles Wilkes has however drawn attention to Table 1.7 of the annual Public Expenditure Statistical analyses (PESA) which record the 2024-25 planned 'Administration budget' as £14.0bn within which the paybill was estimated to be £9.4bn.
(This whole administration budget is around 1.1% of Total Managed Expenditure.)
If the government were to reduce these administration costs by 15% (of £14.0bn) then the saving could indeed by of the order of £2.2bn.
We also know that, as of August 2024, the median salary for civil servants was c.£34,000. As there were approximately 510,000 full time equivalent (fte) civil servants, this suggests a total paybill of around £17 billion. And it suggests that around 250-300,000 are employed in administration so as to account for the £9.4bn paybill.
15% of these would suggest a reduction in the size of the civil service of 37,500-45,000 by 2030. This number would need to be higher if the administrative cost savings are achieved, in part, by replacing staff with AI and other technology.
More Detail
The above analysis focuses on the difference between those officials employed in 'administration' and those employed elsewhere. I do not, however, know how that boundary is defined. Can anyone help?
The annual Civil Service Statistics contain two other analyses.
Table D2 divides the civil service into 'Core' and 'non-Core'. As of 31 March 2024 there were 198,000 fte employed in core (back-office?) activities which are listed as:
Analysis, commercial, communications, counter fraud, debt, digital, data and technology, finance, grants management, human resources, internal audit, legal, project delivery, property, security, unreported
A further 312k were 'non-core bringing the fte total to 510,000.
Table 8 of the same statistics analyses the civil service by profession. The fte figures were ('000s):
Operational delivery 271
Policy 34
Digital etc. 24 (HMG aims to double this by 2030.)
Tax 14 (HMRC also employ 27k in operational delivery)
Science, Engineering 14
HR 11
Legal 10
Finance 10
Twenty-three other professions (and a few unreported) 122
[Total 510]
Comment
This chart shows how civil service numbers have increased since 2016 so there is no reason to think that the number could not, with care, be brought back down to around that level.
As Former Cabinet Secretary Lord (Richard) Wilson put it in the Lords:
There have been successful drives to reduce the size of the civil service: Francis Maude’s was one, as Alice Thomson writes. Indeed, between 1980 and 1996 the size dropped from roughly three quarters of a million people to half a million under prime ministers Margaret Thatcher and John Major. Scarcely anyone noticed. The secret lies not in aggressive public statements – they put people’s backs up and create resistance – but in quiet good management by permanent secretaries and senior officials sustained over a period of years, drawing on experience. One thing is, however, essential. The drive needs clear ministerial support in private, and above all political will from No 10. If civil servants see that the political backing is there the reduction will happen. If ministers say one thing in public but privately resist, it won’t.
Martin Stanley
The move to part time and job share is a factor here. Typically a post taken by a job share pairing has each person working 3 days a week - so covering the week between them and allowing a day of overlap for coordination and coherence. So the job becomes 1.2 FTE. The same effect happens en masse in a team with many part-timers : what would have been say 10 people and 10 FTE becomes say 15 people and 12 FTE. Not saying this is a bad thing - it has much to commend it. But it’s an important factor in how the CS has grown and become less efficient, at least in terms of staff per post.
The dramatic cut in civil service numbers during the 1980s was of course made easier for those concerned by the huge retirement bulge deriving from the large scale recruitment of civil servants during the war and the Attlee government. By contrast, presumably it is the smaller cohort recruited during that period, when civil servant numbers fell by a third, who are retiring now. Tony Metcalfe