National Audit Office warns over civil service cuts

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Whitehall has failed to plan properly for the implications of past and future cuts to civil service staffing, the public spending watchdog has warned.

The National Audit Office said 90,000 jobs were cut from 2010 to 2014, saving £2.29bn from the annual wage bill.

But it said the recruitment freeze had created a "generational gap" which could cause a serious skills shortage.

The government said it was working to ensure the civil service was "more skilled and diverse".

The NAO report published on Friday examined government departments' progress in reducing staff numbers and costs.

Its analysis - centred on HM Revenue and Customs and the transport, international development and defence departments - found that there was a mixed picture of success.

And it warned that proper strategies were not in place to implement future cuts to civil service staffing levels, driven by government plans to cut the financial deficit.

'Generational gap'

NAO head Amyas Morse said: "Not enough planning has gone into making sure that, over the longer term, the reductions already made and any required in future are sustainable and do not damage the delivery of public service."

He added: "The centre of government must do more to help departments meet these challenges, including managing the heightened risk of a shortage of vital skills."

The report said that the significant reduction in civil service jobs since 2010 - from 492,000 to 405,000 - had substantially reduced the annual wage bill by £2.29bn, to £11.13bn.

But it said this was achieved mainly by restricting recruitment, which had created a "generational gap".

Over a period of four years, the proportion of staff members in their 20s reduced from 14% to 9%, while those aged 50-59 rose from 26% to 31%, it said.

"We consider it fair to assume that low levels of recruitment and the creation of a generational gap potentially heighten the risk that the civil service will not have the talent and skills needed for future challenges," the report warned.

The NAO also concluded that Whitehall had not done enough to prepare for the consequences of having an even smaller civil service, with further staffing cuts planned between now and 2020.

Government departments are being asked to find a combined £132bn of further spending cuts to help eliminate the deficit by 2017-18.

'Good progress'

The NAO said departments would need to manage staff cuts "strategically" in order to "reduce the risk of damaging public service delivery".

However, its analysis found "weaknesses in their approaches to developing strategic workforce plans" which it said could "hinder staff cost reductions".

"Departments' progress in developing and implementing long-term operating models is not advanced enough to sustain existing reductions and to be well placed to make the expected reductions during the 2015-2020 Parliament," it concluded.

A Cabinet Office spokesman said the government had noted the report and would review its recommendations.

The spokesman said the civil service was at its smallest since the Second World War "while continuing to deliver leading public services".

"We are working to ensure that the civil service is more skilled and diverse, and have made good progress in building strong commercial, digital and project delivery skills. We will continue to focus on these areas," the spokesman added.