https://civilservice.blog.gov.uk/2016/03/17/the-budget-and-the-civil-service/

The Budget and the Civil Service

Sir Jeremy at the Civil Service Board meeting, January 2015
Sir Jeremy Heywood

I’ve written here before about the fiscal and economic path set out by the Chancellor last November at the Spending Review, and what this means for civil servants.

Since then, every department has published its Single Departmental Plan. These have sharpened the focus on how we are delivering the Government’s manifesto commitments, as well as ‘business as usual’, using our resources where they can be most effective.

Yesterday’s Budget underlines the need for the Civil Service to work more efficiently and collaboratively, and concentrate on the quality of the services we provide.

On track

The most significant change in context is the independent Office for Budget Responsibility’s revised economic forecasts. In the light of weaker growth prospects across the global economy, the OBR has reduced its forecast for productivity growth and hence the long-term rate of the UK’s economic growth.

The Budget responds to this by leaving spending on public services largely unchanged from previous plans for the next three years, but announces that a further £3.5 billion of reductions to public spending will be found in 2019-20, keeping the Chancellor on track to return the public finances to a surplus in that year. To help identify these savings, which amount to 0.5% of total public spending, the Chief Secretary to the Treasury and the Minister for the Cabinet Office will lead an efficiency review, reporting in 2018.

By the end of the Parliament, departments, particularly those where spending is not protected, will therefore need to achieve these further reductions and absorb other pressures, such as an increase in the cost of servicing public sector pensions.

Creativity and adaptability

For civil servants, this is now familiar territory. During the last Parliament, you led by example as we began the process of strengthening the Civil Service to meet the pressures we face. You showed how you could adapt to the challenges of modernisation, work in new ways and take advantage of new technologies to bring public services directly to the citizen - and do all of this while still delivering the day job. I am very proud of what we all achieved together.

Now, we must tap even further into your creativity and adaptability, which make this organisation such a formidable force for change.

As usual, the Budget announces a host of changes in specific areas, from infrastructure investment to business tax reform, and from increased funding for schools to tackling obesity through a levy on sugar in soft drinks. I won’t attempt to duplicate here the commentary that you will be able to watch on the news and read in the  papers. Many of you will, of course, be working over the coming months to put these measures into effect.

A modern service

However, I am also pleased that the Budget includes support for several reforms that probably won’t hit the headlines but help take us further towards a modern, digital Civil Service. To take a few examples:

  • following on from Charlie Bean’s review of the Office of National Statistics published last week, there is over £10 million of funding for a new ONS data science centre and centre of excellence, to bring the power of cutting-edge techniques to bear on measuring society and the economy;
  • in keeping with recent measures to support flexibility in working, such as Shared Parental Leave, the Behavioural Insights Team will be working with the Treasury to look at new ways to support parents in choosing when and how to return to work;
  • and HMRC will enable businesses to use their digital tax accounts to make pay-as-you-go payments, helping them to keep on top of their taxes – part of HMRC's drive to become one of the most digitally advanced tax administrations in the world.

These specific ideas chime well with the priorities the Civil Service Board have set out for this Parliament: to create a more commercially effective, digital, and diverse and inclusive Civil Service.

The task we face remains as tough as ever, and the Budget has underlined once again how strong the economic headwinds are. But given the huge progress we have made, I am more confident than ever that the Civil Service can rise to the challenge.

Follow Sir Jeremy on Twitter: @HeadUKCivServ

10 comments

  1. syl

    In regard to announcements in early February Department's were advised that there would be dramatic cuts and that there would inevitably be redundancies. When reading the documentation and timelines, it became apparent that the SCS would be the first to begin to leave followed by the grade staff. From other announcements that followed regarding changes to redundancy packages, it looked like the SCS departure timetables would allow them to leave on the package currently in place but the grade staff would depart under the potential new terms which would reduce their redundancy package.

    Confirmation was requested from the SCS to clarify this situation at the beginning of February and now more than mid-way through March we have heard nothing further.

    The above is not acceptable and certainly does not conform to the "We are all in this together" mentality that we are expected to believe.

    Anyone able to thrown any light on why higher paid colleagues would receive a different package to the grade staff?

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  2. Paul Harcombe

    'spending on public services largely unchanged' and then another £3.5bn cut in public spending (on top of all that has gone before), how is that 'largely unchanged' please?

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  3. Stephen

    "By the end of the Parliament, departments, particularly those where spending is not protected, will therefore need to achieve these further reductions and absorb other pressures, such as an increase in the cost of servicing public sector pensions."

    Does this mean a further reduction in our pension is planned?

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  4. L Hammond

    Sorry? Why is there an increase in the cost of servicing Public Sector Pensions?

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  5. David Rennie

    "but announces that a further £3.5 billion of reductions to public spending will be found in 2019-20, keeping the Chancellor on track to return the public finances to a surplus in that year"
    This is not true. All indications are that this will not be achieved (and bear in mind that the current government has doubled the national debt since gaining office)
    Sir Jeremy is stepping over the boundary between Civil Servant and politician.

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  6. AA

    To be honest as a person who has clocked up a 30 years service today but on an AO grade it is quite frankly a disgrace!

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  7. Caroline

    "Now, we must tap even further into your creativity and adaptability, which make this organisation such a formidable force for change."

    How to downsize even further? More for less? Less offices, less staff - but more (different) kind of work.

    How to teleport (beam me up Scotty), so that staff can travel further than the London Marathon (in both directions, one direction alone is over 26 miles and then you have the return journey) each day without getting stressed?

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  8. john

    Syl, think you've got that all wrong. My understanding was the speed of release was wholly dependent on the importance of their respective roles in their various areas of employment. That is why 'sharp end' lower grade staff really cannot leave.

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  9. William (MoD)

    Sir Jeremy,
    I notince that you did not mention anything about pay in your article.
    Can I assume that Civil Servants will be taking home less in 2020 than we did in 2010 with all the increases in deductions?

    As I am now.

    With all these downward influences, how will the Civil Service hold onto any staff capable of doing the chnages?
    Or is the fact that this MoD site has 52% consultants an indicator on the future?

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  10. Charlotte Smith

    I dont want to sound negative but the facts speak for themselves. First point. You have already cut back to the very foundations. Is there anything left in the barrel to scrape. I think not. Second point, i realise pay negoiations are ongoing but i know i shall already be facing a pay cut in April when i have to pay more into my pension scheme. How is one expected to keep on paying household bills? It has come to the point that i am now left without food in the last week before i get paid. A travesty.

    How about a novel idea. Cut back on the waste in Parliament in expenses and pay rises that those in parliament can afford to forgo. Oh and consultants. We are after all, in it together, are we not?!!

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