26 June 2013

Despite cuts of between a third and a half in the last Spending Review, the basic Whitehall model is still standing. Further cuts will require looking at more radical options.

Whitehall has undergone huge changes since 2010 - both introducing major reforms and making big cuts to its own cost base. Sir Humphrey would be appalled.

It is hard to overstate the reforming ambition of this Government. It has introduced Universal Credit, reforms to welfare, schools, the NHS, police, prisons and probation. And all of this while trying to get some growth in the economy, closing out a war in Afghanistan and preparing to block Scottish independence.

And the Civil Service has made unprecedented savings itself following the Spending Review in 2010. Departments were tasked with making cuts of at least 33%. Some have gone further aiming for up to 50%. These are big round numbers with a minimum of analysis and a healthy dose of politics attached, yet so far departments are on course and head count has already gone down by over 64,000 or about 13%.

Some departments are making transformational changes. The Ministry of Defence, for example, is fundamentally changing its operating model following the Levene Report and is now considering some of the most radical options in Whitehall for partnering with the private sector on procurement, infrastructure and business services.

Other departments, especially the classic policy focused departments, have taken more conventional approaches to savings but have still reduced and reshaped arm's-length bodies, cut headcount and moved to much greater flexible resourcing.

The West Coast Mainline fiasco aside, this has been remarkably quiet and efficient. Indeed, some Secretaries of State understandably feel a strong sense of validation and that further cuts would produce more of the same politically pain free savings.

Even though Whitehall has proved to be extremely resilient so far, the more likely scenario is that demands to make more substantial savings will at some point push a number of departments beyond a sustainable threshold. As we heard in our research for Transforming Whitehall "there's really nothing left to cut".

This isn't an argument for protecting the Civil Service from any further cuts, however. Rather, if the Civil Service does need to make more large savings in this and future Spending Rounds, it will also require the political support and permission to go beyond departmental changes and tackle the underlying ways of working head on. A year on from the Civil Service Reform Plan, some progress has been made but the bold vision it describes has not been realised. At some point cuts will force much bigger changes towards a more integrated Civil Service with the current silos a luxury that can no longer be afforded.