The government plans to reduce 'non-frontline' civil service headcount to pre-pandemic levels as part of plans to reinvest 5% of departmental budgets into “priority areas” by 2024-25, Budget documents have revealed.
In documents published following a Spending Review and Budget statement by chancellor Rishi Sunak, the Treasury revealed the headcount reductions were planned “to drive out inefficient spend to ensure taxpayers’ money is focused on priorities” as part of the Spending Review, which has set departmental budgets up to 2024-25.
According to the Treasury, every department’s overall spending will increase in real terms in the settlement, with Sunak highlighting that total departmental spending is set to grow in real terms at 3.8% a year on average, estimated at a cash increase of £150bn
“That’s the largest increase this century, with spending growing by 3.8% a year in real terms,” Sunak said.
“As a result of this Spending Review, and contrary to speculation, there will be a real terms rise in overall spending for every single department.”
Among the major settlements is a 4.1% average annual real terms increase in the budget at the Department of Health and Social Care, with funding from the previously-announced increase in national insurance being used to provide “significant further funding for the NHS”, government said.
Department for Education funding increases by 2.0% in real terms year on year, and the Treasury says that the £4.7bn increase in core schools budget in England, “will restore per pupil funding to 2010 levels in real terms”, according to Sunak.
The 1.9% annual real terms increase in the Home Office budget will meet the government’s commitment to recruit 20,000 additional police officers by 2023, and the 3.3% increase at the Ministry of Justice will “expand capacity across the criminal justice system to meet increased demand from the recruitment of 20,000 extra police officers”.
Other measures in the statement include a reduction in the Universal Credit taper rate – the extent to which benefits are withdrawn as people work more hours – from 63% to 55%, and major changes to the business rates regime that include a 50% rates discount for retail, hospitality, and leisure sectors in England next year. A £11.5bn affordable homes programme to build 180,000 new residences was also announced.
The document revealed the likely reduction in civil service headcount as part of an “efficiency and savings review to interrogate departmental spending and consider how to capitalise on any productivity gains from the Covid-19 response”.
This has led to plans to save 5% from departments’ day to day budgets by 2024-25 that would then be “reinvested into priority areas”.
The document added: “These efficiencies will mean that the government can reduce non-frontline civil service headcount to 2019-20 levels by 2024-25, helping to fund increases to frontline roles.
“This will mean a more productive and agile civil service, taking advantage of new ways of working to continue to reduce inefficiencies and deliver better outcomes for the public.”
According to the Office for National Statistics, the civil service headcount at the end of 2020-21 was 484,880, up from 456,410 at the end of 2019-20. When calculated on a full-time equivalent basis, employment was 452,830, up from 423,770 in 2019-20. CSW has asked the Treasury for more information on the definition of “non-frontline civil servants”, and what level of reductions would be needed to return it to 2019-20 levels.
The Budget and Spending Review also continued funding for the Places for Growth programme, which aims to move 22,000 civil service roles outside London by 2030, “to bring policymakers closer to the communities they serve”.