Treasury axe poised to fall on junior staff

Treasury managers are drawing up plans for redundancies at junior levels within the next couple of weeks following the loss of a quarter of the senior jobs in Whitehall's most powerful department.

The first stage in restructuring the Treasury, announced by the Permanent Secretary Sir Terry Burns last October, came into effect earlier this month. Seven new directorates are now in place.

Managers must now submit proposals for the lower echelons, depending on the budgets they have won for their own directorate, which will be consolidated into a department-wide plan. They have been told to act as soon as possible in order to bring to an end months of morale-sapping uncertainty over job prospects.

So far the management restructuring at the Treasury has been less painful than expected. Out of 100 senior jobs, 23 have been trimmed by voluntary redundancy. Payoffs have depended on salary and length of service - taking them into six figures in some cases. Some officials have been found niches in other departments or eased out through secondments.

Even so, the process has created bitterness and insecurity. Morale at the Treasury has been low ever since the ERM crisis in 1992, which was blamed on faulty Treasury economic forecasts and poor policy advice.

Sir Terry has subsequently introduced a wide range of changes, including opening the department to more outside advisors - such as its panel of independent forecasters - and sending officials on industry visits.

Some junior officials have taken pleasure in seeing the axe fall on their seniors. The majority, however, have spent the past six months worried about their own future.

The restructuring is the outcome of the Fundamental Expenditure Review launched by Michael Portillo when he was Chief Secretary to the Treasury. It concluded that some of the Treasury's functions could be transferred to other departments.

Critics argue that the cuts will leave the Treasury unable to fulfil its functions properly, and will load even more work onto officials who are already stressed and overburdened.

The scale of the Treasury's likely losses is small compared with the rest of Whitehall, however.

The Government envisages the loss of 43,000 civil service jobs between the last financial year and 1997-98.