Source · Select Committees · Public Accounts Committee
Recommendation 24
24
Rejected
Staff cuts will inevitably involve a quantity of associated costs, including redundancy costs, that the...
Recommendation
Staff cuts will inevitably involve a quantity of associated costs, including redundancy costs, that the government will have to pay out. We questioned the Treasury as to what the total cost of these payments was likely to be, and although it explained that the number of required redundancies could be minimised by the large number of people who leave the civil service or retire each year, it told us that it did not know what the expected level of exit costs was likely to be at this stage.73 The Treasury also acknowledged that it did not have an understanding of how redundancies would be allocated, or if they would be targeted towards staff for whom lower exit costs would be involved.74
Government Response Summary
The government disagrees with the recommendation to prepare a clearly articulated and costed plan based on proposed staffing reductions across government, because departments should look for the most effective ways to secure value and maximise efficiency within budgets.
Government Response
Rejected
HM Government
Rejected
6. PAC conclusion: Government has not yet set out the consequences of announced Civil Service staffing reductions. 6. PAC recommendation: HM Treasury and the Cabinet Office should prepare a clearly articulated and costed plan based on proposed staffing reductions across government, and ensure that reductions represent value for money, and tell us in its Treasury Minute response when that will be published. 6.1 The government disagrees with the Committee’s recommendation. 6.2 The Prime Minister has confirmed that, rather than a top-down headcount reduction target, department should look for the most effective ways to secure value and maximise efficiency within budgets, to ensure the best value for taxpayers both now and in the long term. As a result, the government has not set top-down targets for Civil Service headcount reductions through the Efficiency and Savings Review launched in the Autumn Statement and will not be publishing a full plan to deliver the previously proposed Civil Service staffing reductions. 6.3 At Spending Review 2021, departments already identified 5% RDEL savings against day-to-day central departmental budgets in 2024-25, and HM Treasury is monitoring the delivery of these. The focus of the forthcoming Efficiency and Savings Review will be to task every government department to look for the most effective ways to secure value and maximise efficiency within budgets to use taxpayers’ money sustainably in the long-term including, where appropriate, headcount reductions. Departments will develop plans with specific efficiency savings to ensure they can live within the budgets set at the last spending review including any plans for headcount reductions, which they will own and deliver. The outcome of the Efficiency and Savings Review will be reported next spring and monitored by HM Treasury for the remainder of the SR period. The Chancellor and Chief Secretary to the Treasury will oversee the delivery of these efficiency savings and are also holding regular meetings with Ministers to drive efficiency. 6.4 At the same time, the civil service needs to ensure it has the skills, tools and resources to be a modern civil service that reflects the people it serves, and provides value for money to the taxpayer. Government functions will work with departments to ensure overall workforce plans, including any appropriate reductions, deliver a skilled and increasingly profesionalised workforce to enable effective delivery in line with the government’s longer term strategy for Civil Service reform.