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.
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