Civil service jobs cull is false economy that could obstruct real reform, says TUC

The proposed 71,000 cut in civil service jobs is likely to deliver less than six per cent of the 22 billion the government expects to save through a its public sector efficiency reforms. The job cuts, which would save the public purse less than 1 billion, could have such a negative effect on staff and resources that the reforms expected to deliver the lionís share of the savings are jeopardised, according to a TUC report out today (Saturday).

Brendan Barber, TUC General Secretary, said:

The governmentís big boost to public spending is now showing results. Public services are improving but looking for simple savings through job cuts at this stage could be a false economy. They may shoot a Tory fox, but cutting thousands of civil service jobs will hit the morale and capabilities of the public servants expected to implement government reforms. The costs could easily outweigh the benefits.

The governmentís efficiency review (launched by Sir Peter Gershon in 2003 and published as part of the 2004 Spending review) proposed the loss of 70,600 jobs from the central civil service and the shifting of 13,500 jobs into ífront-lineí services, as well as the relocation of 20,000 posts out of London and the south east. Around 20,000 jobs will also be lost in local government and in Scotland, Wales and Northern Ireland. Based on the average civil service salary the 70,600 job cuts would reduce the 10 billion civil service pay bill by 1.3 billion, six per cent of the governmentís 22 billion savings target. But as many of the jobs to be lost are low paid - and the calculations ignore the cost of filling jobs with casual and agency staff - the TUC estimates that direct savings from job cuts will be less than 1 billion.

At least 95 per cent of the efficiency savings identified will therefore have to come from sources such as work-reorganisation, new technology and reform of public procurement practices. Reducing and demoralising the civil service will make these reforms even more difficult to implement and it would make more sense to freeze the service at its current level, according to the TUC report.

Other key findings in the TUC assessment of the government efficiency review

The public sector is not inherently inefficient. A recent independent study prepared for the government showed that in the private sector (market services) UK productivity, measured by worker output per hour, dragged 30 per cent behind the US and France and 17 per cent behind Germany. Public sector (non-market services) productivity in the UK was 19 per cent higher than in the US (despite the role of the private sector in delivering equivalent services), 15 per cent higher than in Germany and only seven per cent behind France.

The civil service is a small part of the public sector. It makes up only 10 per cent of the public sector workforce and has gained only seven per cent of the new jobs created in the sector between 1997-2003 (37,000 of 500,000). Almost all the civil service growth in the last five years has been in departments delivering a reformed benefits system and back to work programmes (Department for Work and Pensions), tax credits (Inland Revenue) and reforms to the asylum and prison service (Home Office).

The civil service is the right size. Throughout numerous efficiency reviews over the past thirty years governments have felt they needed to retain a civil service of around 10 -12 per cent of total government employment. Reducing this to 8 per cent as the current review proposes increases the danger of service under-delivery and the re-emergence of jobs elsewhere in the public sector, or the use of casual or temporary staff on private contracts.

The planned relocation of 20,000 civil service jobs to regions outside of London fails to address regional gaps in labour market performance because the capital has the highest unemployment rate and lowest employment rate of all the English regions. Also, it is unlikely that 20,000 jobs over three years is going to have much effect on, for example, unemployment rates between the north east and south east. The government should consider moving jobs from Whitehall to less prosperous part of London.