Whitehall job cuts 'short-sighted'
Whitehall has rushed through waves of job cuts without putting plans in place to carry out its work with fewer staff, it has been warned.
Analysis shows the civil service has spent £600 million axing 17,800 staff since December 2010. Although that will eventually dramatically reduce the annual total paybill by £400 million, there was a "risk" many departments would have to increase their workforce again unless they redesigned the way they worked, according to the National Audit Office (NAO).
It also warned that the actual savings enjoyed by the taxpayer would be lower if workers leaving failed to find new jobs and ended up on benefits.
Margaret Hodge, who chairs the public accounts committee, claimed the report showed staff cuts had been carried out in a "short-sighted" way. She said: "Big payouts have encouraged older, more senior staff to leave - we will want to be assured that departments have not been left without the skills and experience to deliver services.
"The evidence suggests that departments have been short-sighted in cutting numbers without plans to change the way they do business. We hope that departments haven't cut numbers in haste only to be left regretting it later.
"It's worrying that they didn't know enough about skills or performance to make good decisions. At its heart, the programme lacked central co-ordination and strategic oversight was woefully lacking."
The NAO warned how quickly the £400 million annual savings kick-in depended on the time it took departments to eliminate headcount-related costs, such as IT and property. Immediate action would realise net savings within 11 months of the departures.
It estimated the net value of the early departures to the taxpayer would be between £750 and £1,400 million by 2015. There had been "minimal" co-ordination of departures from the centre of government and "most" departments had no plans for transforming their business in light of staffing reductions.
Amyas Morse, head of the NAO, said: "Departments have acted quickly to reduce staff numbers and this should bring significant savings, after compensation and early pension payments are paid.
"In order to sustain these savings, and deliver long-term value for money improvements, staff numbers must stay at these reduced levels and departments must develop new ways of working, so that they can cope with greater demand without increasing staff numbers again."