5 reasons why Whitehall is being cut back

The Westminster bubble is predictably outraged this morning by Boris Johnson’s suggestion that the civil service will need to reduce in size by around 90,000 roles over the next two or three years. 


Putting aside the pearl-clutching, the TaxPayers’ Alliance has been pointing out for a while that this was needed. So why has the PM announced the crackdown? Here’s 5 things you need to know.


1. A wider savings programme is underway 

Once the chancellor announced the new Efficiency and Value for Money Committee, the writing was on the wall. Chief secretary Simon Clarke said as much in a recent speech to the Institute of Economic Affairs, pointing out “civil service headcount is up 23 per cent from 2015/16, and by almost 7 per cent in 2021 alone … something that’s impossible to justify long-term, and something we’re determined to reverse.” Note the reference to 2015 levels, which mark the beginning of an “extraordinary period for government finances” and seem an obvious yardstick. Clarke spelled out these intentions, even calling it a “quiet revolution”. HM Treasury and government efficiency minister Jacob Rees-Mogg - and now the PM himself - seem determined to see them realised.   


2. Real savings can’t be made without headcount reductions 

No one likes to cut back a workforce, least of all politicians (who are generally pretty sensitive to the political dangers of increasing unemployment). But payroll is such a big chunk of Whitehall budgets that it can’t remain untouched. We’re talking about 484,880 people in 2021, an increase of eight per cent since 2019. By way of comparison, the Singapore Civil Service comprises about 87,000 mandarins and there’s 246,000 workers in Core Public Administration in Canada. Make no mistake, ministers do not share their mandarins’ view that the British civil service can continue to balloon. 


3. There are too many civil servants 

Increases in the Whitehall workforce have been simply unsustainable. Let’s take the Cabinet Office, for example. According to its 2015 annual report, it employed 2,154 people. Of this, 19 worked on quangos (Civil Service Commission and the Office of the Registrar of Consultant Lobbyists) and 721 provided ‘support to the Cabinet, the PM & the Deputy PM’. A lot’s happened since then, not least Cabinet Office absorbing Brexit and covid functions. But fast forward to the 2021 annual report and it now employs 9,225 people - four times as many. With the addition of the Equality and Human Rights Commission, it now has 218 people working on quangos - 11 times as many. 


4. Each position costs more than just the salary

Whole staff costs in the public sector are generally higher. Again, let’s look at the Cabinet Office by way of example. The 2021 annual report has its core wage bill (or ‘Wages, salaries and fees’) at £452 million. But social security costs are another £51 million and other pension costs £108 million. Civil service pensions remain some of the most generous available with, for example, current cabinet secretary Simon Case’s pension costs coming in at £67,000 on top of his £200,000 salary. Public sector pensions overall represent a £1.8 trillion commitment from the taxpayer, and reducing headcount is the simplest way to get this under control.


5. There’s plenty more to do 

Taxpayers need to see serious efforts to trim Britain’s bloated bureaucracy, going far beyond the core civil service. The recently announced Public Bodies Review Programme will have licence to “assess whether a function should be delivered by the State, or whether an alternative is more fitting”, meaning efforts can be made to tackle the £220 billion British quango blob. Here estimates have the total headcount increasing from 299,171 (2018-19) to 318,714 (2019-20) - with 4,345 people sitting on quango boards alone - so expect to see further efforts to close or merge bodies. Ministers can’t leave any stone unturned if they are going to be able find the billions in savings that they’ve promised.

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