Lord Adonis, Ben Lucas, Jonathan Baume, and James Allen give their views on the challenges faced by the civil service following the spending review

Lord Adonis, director, Institute for Government

The change sweeping through Whitehall and public services is on a scale and speed not seen since the Second World War. The critical question for the civil service after the spending review is whether this transformation will drive fundamental improvement – in particular, to decentralise the civil service and improve its skills and operations.

Worryingly, at least so far, civil service managers appear to have a limited game-plan for managing the transformation they are being asked to undertake: setting targets, simplifying their organisational charts, and starting redundancies as soon as possible does not add up to a positive agenda of transformation. The leaders of the civil service need to quickly produce a credible vision and plan, or risk seeing vital talent depart at a time when it’s urgently required to bring about the change the coalition government talks about.

As the spending review unveils significant cuts in areas such as welfare and local government, the coalition’s Big Society agenda envisages charities, communities and individuals doing more. But devolving power and budgets to academy schools and GP practices requires intensive Whitehall support, essentially replacing one local delivery system with another. In welfare, it will be a huge job for civil servants to carry through reforms to benefits and allowances. The role and skills of the SCS will be critical.

Rapid progress is needed on the agenda set out by Sir Philip Green for centralising procurement and asset management. Whitehall leadership needs to be strengthened; for example, by making a reality of proposed new management boards for each department, engaging ministers, senior officials and non-executive directors from the private sector, able to provide clear strategic direction.

One of the biggest single obstacles I faced when a minister was the weakness of the Whitehall machine in recruiting, retaining and developing those in the top jobs who were vital to the effective running of major programmes. Identifying the talents and skills of the future is all the more important now, especially while there are recruitment freezes.

Ben Lucas, Director, 2020 Public Services Trust

The spending review was driven by the need to cut costs. But public services also need to be reformed. The old way of doing things is no longer sustainable; not only because of the current fiscal squeeze, but also because the challenges of an ageing society, climate change and entrenched inequality call for a new approach. The citizen must be at the heart of public services in the future. And the objective should be to improve social productivity, creating social value – both through the quality of the relationship between the service and the citizen, and through mobilising citizen and social resources. 

Despite George Osborne’s claim in the summer that he wanted to stimulate a public debate about the spending review, this has been a traditional exercise shaped by government, not by citizens. But faced with the need to make massive cuts, there is still an opportunity for local government to go where central government has feared to tread.  

First, councils can ensure that local citizens genuinely shape the budgetary decision-making process. This means generating proper local debate about the hard choices and using deliberative decision-making mechanisms – ranging from citizen juries to town hall meetings and participatory budgeting – to determine local priorities. 

Second, they can enlist citizens in redesigning and running many of their services most at risk of closure. The traditional budgetary cuts process is one in which the local state assumes it only has two choices: to fund services and keep them open, or to cut them and allow them to close. The new way is to work with local communities and staff to look at how non-state resource can be catalysed to run services – such as parks, leisure and community services and libraries – which will otherwise be cut.

Jonathan Baume, general secretary, FDA

There is no doubt that the much-anticipated spending review presents a critical challenge. The Office for Budget Responsibility’s estimate – endorsed by the chancellor – of a public sector head count reduction of 490,000 over four years, together with the administrative budgets of the main government departments being cut by one third, creates a major resources issue. In those areas facing considerable restructuring and re-engineering, such as the NHS, there will be massive upheaval with no guarantee of success, whilst other sectors face more subtle changes – perhaps office amalgamations.

Even handling the process of job run-downs will be difficult; making redundancies is quite time-consuming and stressful in itself. And the extra resources required to run this process whilst maintaining effective service delivery will not be easily found. 

All of this work in ‘downsizing’ and re-engineering takes time and energy. It will be extremely difficult, and people are going to have to accept that the country is looking at a future of slimmed-down services – both nationally and locally – and that the nature of services will change. Public services and benefits will look different – quantitatively and qualitatively – by 2020. Where the current plan is to continue the delivery of services on a consistent and effective basis without any apparent change, politicians and managers face significant challenges, because even here resources will almost inevitably have to be squeezed.

Every area of government is under the microscope. Should a service continue to be delivered? And if so, will government continue to provide it directly? Should it be outsourced? Can the voluntary sector fill the void? These are the big policy questions.

Is it a question of ‘keeping the show on the road’ in the civil service, or do you move parts of what government has traditionally delivered out into the wider world?
It is vital in these tough times that investment in training and skills is maintained, in spite of shrinking budgets. A smaller civil service will need to be more professional and more highly skilled in order to continue to deliver the government’s programme and the services the public rely upon.

Behind the figures announced by the chancellor is the impact on individual civil servants. Senior staff will be managing people facing uncertain futures, while their own career paths may also be unclear. In these difficult circumstances, maintaining levels of morale and motivation – both of senior staff, and of those public servants they manage – will be key. No-one has yet provided any easy answers.

James Allen, senior policy officer, National Council for Voluntary Organisations

Now that the eagerly awaited spending review has been published, NCVO is analysing the potential impact on the voluntary and community sector (VCS). Whilst the overall picture is one of reduced spending, a commitment to public services reform and to supporting communities to have a real say about services should bring opportunities for the sector.

In our submission to the review, we argued that the government should find ways to mitigate the impact of reduced funding on the sector. At a challenging time, with increased demand and falling income, we are calling on the government to ensure that the net effect of the changes is at least neutral.  

This can be brought about, in part, at both central and local government level through a commitment to good funding practice. Awarding longer-term funding where possible allows organisations to plan ahead; meanwhile, where funding changes must be made, early warning is essential. Phasing in spending reductions over the spending review period, rather than making quick, deep cuts to VCS contracts, will help to minimise service disruption.  

Changes to public service commissioning processes, with proportionate requirements attached to contracts and a thorough understanding of how the VCS adds value, should allow the sector to play an enhanced role in improving public services.  A thorough examination of the way the sector is regulated is welcome. Tax policy changes – including a simplification of gift aid, which continues to be a valuable source of income to the sector – would also help to mitigate the impacts of reduced spending. 

Partnership working will be essential, and we would urge civil servants at every government level to work with us to protect services in a period of fiscal retrenchment. The real focus now for many voluntary organisations is likely to be at local rather than central government level.  

The government’s transitional fund for the VCS will clearly help to target support to service-delivery organisations. NCVO’s research shows that areas of the sector, particularly those which deliver public services, have low levels of free reserves. Without assistance in the form of the transitional fund, they will clearly see their potential to deliver services diminished.