Most years, after the annual July rush to finalise policies and complete legislation before parliament rises and ministers head for their constituencies, Whitehall’s civil servants can relax a little. But this time, transfixed by the financial dust-storms looming on the horizon, many are finding it hard to enjoy the sunshine.
Since 2010, departments have got used to drought; their remaining optimists point out that, to date, the Conservative government has not slashed quite as fiercely as it had promised. The post-election raid on departmental budgets was fairly small; the budget’s cuts and pay caps were no worse than predicted; and George Osborne’s decision to again postpone the elimination of the deficit provides helpful breathing space. Meanwhile, the departure of uncompromising Cabinet Office minister Francis Maude – replaced by Matthew Hancock, who’s mounting a gentle charm offensive – has been a relief for many in Whitehall.
However, the continuing cash drought will hit a land already sucked dry; and when Osborne opened the comprehensive spending review process by requesting departmental plans for 25% and 40% cuts, shoulders slumped across Whitehall. With straightforward efficiency savings long since realised, only those departments with the scale, capabilities and portfolios to mount big transformation projects will be able to save a fraction of this through genuine efficiencies; and all must make tough decisions about cutting services, raising charges and shedding yet more staff.
Officials must now spend the summer crunching depressing numbers and producing horror stories to spook the Treasury: departments will compete to wave the most politically-poisonous ‘bleeding stump’ service cuts, in a bid to deflect the axe onto other parts of government. Everyone knows that the total cuts are unlikely to total 25%, let alone 40%; but some departments will indeed suffer that kind of evisceration, as the Department for Communities and Local Government did under the coalition. The challenge for each permanent secretary is to evade the worst of the cuts, as the Treasury plays its well-honed game of divide and conquer.
The officials engaged in this vast wrangle know that their own prospects are bleak. Thousands will lose their jobs – and under the government’s planned redundancy payments cap, many will receive less than previous waves of departing officials. Rubbing salt into this wound, departments – aware that no-one will get a real rise for years to come – are hiring new staff at the top of their pay bands. So many long-serving officials, having delivered the policies and savings to help foster Britain’s economic recovery, are to receive both less generous salaries than newer employees, and smaller redundancy payments than those who left before things got really tough.
Five years into the drought, civil servants face another half-decade of cutting spending as their own real incomes fall. So Whitehall’s leaders and managers won’t be spending this summer relaxing, but making agonising calculations and producing plans they’d hate to deliver – while, in rare quiet moments, polishing up their CVs.
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