The government’s most senior non-executive director has warned that civil service departments are “in the fog of war” as they try and work out how to cut their budgets ahead of the chancellor’s public spending review on 25 November.
Sir Ian Cheshire, previously chief executive of Kingfisher, is now running the government’s programme to put more non-executive directors on the boards of Whitehall departments, and told the Public Chairs’ Forum (PCF) annual conference on Wednesday that Whitehall was at a unique turning point as senior civil servants try to produce business plans for their departmentsat a time of of significant spending challenges. “Departments survived the last spending review with a lot of pushing and shoving, but the cuts were not life-changing,” he said. “But with another 25% to be cut – more in unprotected departments – this is a game-changer. This is a critical juncture for public services, right now and over the next three months.”
Cheshire said the run-up to 25 November would be critical for public sector spending. He said trade-offs would have to be made that would “not be politically great” but there was no clear process for working out the trade-offs within or between departments to see which services could be cut. “The exact process for how the spending review and the single business plans are going to come together is, frankly, pretty opaque, ” Cheshire said.
Departments have been asked by the chancellor, George Osborne, to model cuts of 25% and 40% ahead of the spending review. There have already been reports that some ministers are resisting the cuts, including f oreign secretary Philip Hammond and work and pensions secretary Iain Duncan Smith .
Cheshire said non-executive directors, who were introduced to Whitehall boards by Francis Maude when he was cabinet office minister, were now more confident in challenging ministers and forcing them to prioritise. Austerity and spending cuts had provided, he said, a very compelling way to focus on key priorities.
Cheshire said he was optimistic that the cuts would generate opportunities for departments to work together better and he called for the chairs and boards of public bodies to work more closely with their Whitehall departments. There have already been moves to make closer connections between public bodies and their Whitehall departments: the chairs of Natural England and the Environment Agency, which between them represent about 80% of the work of the Department for the Environment, Food and Rural Affairs, are now going to sit on the main departmental board, said Cheshire.
Marcus Agius, chair of Royal Botanic Gardens, Kew , said that having non-executive directors sit on the board of more than a single department could help with more integrated working across Whitehall, while Judith Hackitt, chair of the Health and Safety Executive , said goodwill would not be enough on its own to ensure greater integration between public bodies and their sponsor departments. “The idea of picking up the phone and having a chat won’t get you there,” she said. “We require a formal means of communication.”
The coalition government began a cull of public bodies in 2010 and the number has been cut from more than 900 to about 500, with some previous functions brought back into departments. Public bodies employ more than 220,000 staff and are responsible for spending £135bn. They carry out a huge range of functions, including, among many other things, running one of the world’s largest seed banks, with more than 2bn seeds in storage at Kew’s millennium seed bank; managing fishing quotas; policing Britain’s railways; running the country’s civil space programme; and regulating many different UK industries, including nuclear, water and media.
“Chairs of public bodies and their boards have a vital role to play in helping government implement reforms in public services,” said Chris Banks, chair of the PCF. “They bring to the table a degree of objectivity, challenge and support.” He said the conference had focused on what public bodies could do to rise to the challenge of increasing demand for public services and reducing funds available to pay for them.
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