Inside Whitehall: We have to start the cuts now for next period of austerity

Some departments have been better than others at restructuring and reducing costs

Share

This is a bit simplistic – but it makes a simple point. If you knew that over the next five years you had to cut your spending by a quarter you would probably start worrying now about where to find the savings.

Equally if you ran a business whose revenues were falling by 5 per cent a year you would be negligent in your corporate responsibilities if you were not actively developing a restructuring plan.

That, in essence, is the prospect facing large swathes of Whitehall after the next election regardless of who wins power.

But worryingly – and extraordinarily – no one in the civil service seems to thinking about what to do or is planning how to cope.

The figures are stark. Departmental budgets have been cut by only 8.9 per cent on average in this parliament and by 17 per cent when you take out protected areas of spending such as health, aid and schools.

By contrast, independent estimates by the Institute for Fiscal Studies suggest that unless the next Government significantly put up taxes or cut benefits in the next four years there will need to be further cuts of 11.9 per cent or 22 per cent if you again protect the same areas of spending.

A report today by the Institute for Government (IFG) think tank makes depressing reading. It points out that budget cuts so far have mainly consisted of “salami slicing” done on a department-by-department basis.

Some have been better than others at restructuring and reducing costs without cutting into their core capabilities.  But others – as the West Coast mainline debacle and the problems at the Department of Work and Pensions have shown – have not.

And the IFG argues that, in the next round of cuts, unless there is fundamental reform of the way in which Whitehall allocates resources there is a real danger that the civil service across the board will no longer be able deliver competent and effective public services.

Given we are a year out from an election,  senior officials should be drawing up options now.

This should concentrate on two areas. The first ought to be a radical examination of the federal structure of Whitehall because policy and public services today don’t neatly fit within departmental boundaries.

For example the departments of Health, Education and Local Government all have some responsibility for public health. Equally the Business and Work and Pensions departments both have a role to play getting people into work. But at the moment civil servants in individual departments do not have an incentive to co-operate with one another.

Government should look at reducing the number of departments and allocating money on the basis of projects rather than departments. Apart from the politics of it, why do we need a Department for International Development, Culture, Communities or frankly Scotland, Wales and Northern Ireland?

Secondly, as the IFG recommend, leadership at the top must be strengthened. The Treasury should take on an enhanced role – not just forcing departments to reduce their budgets – but making them work together to get money in the first place. Permanent Secretaries need to know that their obligation is to the Government as a whole, not their individual ministers.

The Cabinet Secretary, Jeremy Heywood, is fond of talking about the civil service doing “more with less”. He should really add “and differently”.

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Tradewind Recruitment: Geography Teacher

£90 - £140 per day: Tradewind Recruitment: On behalf of a successful academy i...

Investigo: Finance Business Partner

£45000 - £50000 per annum: Investigo: My client, a global leader in providing ...

Austen Lloyd: Commercial Property Solicitor - West London

Excellent Salary: Austen Lloyd: WEST LONDON - An excellent new opportunity wit...

Recruitment Genius: Florist Shop Manager

£8 - £10 per hour: Recruitment Genius: A Florist Shop Manager is required to m...

Day In a Page

Read Next
A solar energy farm in France  

Nature Studies: For all the attractions of solar power, it shouldn’t blight the countryside

Michael McCarthy
Supporters of New Democracy wave Greek flags during Antonis Samaras pre-election speech.  

Greece elections: Where does power lie? This is the question that ties the UK to Athens

Steve Richards
Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore
'I'm gay, and plan to fight military homophobia'

'I'm gay, and plan to fight military homophobia'

Army general planning to come out
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea
America: Land of the free, home of the political dynasty

America: Land of the free, home of the political dynasty

These days in the US things are pretty much stuck where they are, both in politics and society at large, says Rupert Cornwell
A graphic history of US civil rights – in comic book form

A graphic history of US civil rights – in comic book form

A veteran of the Fifties campaigns is inspiring a new generation of activists
Winston Churchill: the enigma of a British hero

Winston Churchill: the enigma of a British hero

A C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
Growing mussels: Precious freshwater shellfish are thriving in a unique green project

Growing mussels

Precious freshwater shellfish are thriving in a unique green project