Low hanging fruit

This is how Francis Maude, the Cabinet Minister, described the £3.75 billion of savings the government claims it has made in the civil service

The Cabinet office say the savings included:

  • £870m from cutting consultancy spending
  • Nearly £500m from reducing spend on temporary agency staff
  • £400m from cutting marketing spending
  • £360m from centralising spend on common goods and services
  • £800m from renegotiating deals with some of the largest suppliers to government, equivalent to 6% of a full year of spend with those suppliers
  • £150m from 2010-11 budgets for government’s major projects, by halting or curtailing spending
  • £300m by “applying greater scrutiny” to Information and Communication Technology (ICT) expenditure
  • £90m reduction on property expenses by “exerting better control” over lease renewals
  • the equivalent of £300m saved on 2010-2011 salary costs by reducing the size of the civil service by more than 17,000 posts

The Union has long argued that the civil service was, and indeed is, over reliant on consultants and temporary staff (it would be cheaper to hire permanent staff). Not only have we said that they were unnecessary but we have hammered home how much they cost. So we knew that much could be saved on these fronts.

It is claimed that £360m has been saved from centralising spend on common goods and services and £90m reduction on property expenses by “exerting better control” over lease renewals

There is deep irony here as it was Margret Thatcher’s government which abolished the centralised purchase of many goods and services by shutting down the Crown Suppliers. They also abolished the Property Service Agency which had centralised control of the government estate. Read more about them here.

So Francis Maude is partly undoing Mrs Thatcher’s “modernisation”. At the time that the Crown Suppliers and the PSA were abolished we said it would lead to greater costs as the civil service abandoned bulk buying and let departments and agencies lease and buy properties; even if this put them into competition with other departments and agencies who may have wanted to acquire buildings in the same area.

The £150m “saving” from 2010-11 budgets for government’s major projects, by halting or curtailing spending is not a saving if the projects being worked on are needed; it just puts off the evil day when you have to recommence spending on those major projects.

The £800m saving from renegotiating deals. In a slow economy it is always possible to reduce costs as companies are desperate to keep what work they have; the trick is to reduce or contain costs in a boom. Of course the companies who are squeezed, squeeze their workers or shed them (the DWP then picks up the bill for their benefits) and they squeeze their sub contactors.

Reducing the size of the civil service by more than 17,000 posts. Leave aside the fact that many of the 17,000 probably no longer pay tax but get benefits from the DWP hence it maybe cheaper to keep them employed.

Leaving aside the American experience that cutting civil service numbers make matters worse such cuts in the civil service either leads to chaos or lost of income for the government. In other words the 17,000 cut is self defeating.

Of course this brings us to what these “savings” are supposed to achieve. Mr Maude sates that these cuts are “equivalent to the salaries of 200,000 junior nurses, or 150,000 secondary school teachers”. The possible implication being that money saved will be ploughed back into hiring nurses and teachers. In fact, both nurses and teachers are losing jobs under this government.

So this is not saving money to spend it better; it is part of a package of reducing public services.

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