Major government HR jobs cull could save £4bn-per-year

The HR jobs cull across government departments and quangos came closer to fruition yesterday when a Treasury report revealed that £4bn-per-year could be wiped off HR and finance functions by 2013.

In proposals that will be considered in today’s Budget, the Operational Efficiency Programme advised government that considerable restructuring of back-office functions would save billions of pounds of year.

Unions are furious that the Land Registry has already been told it will need to slash its 8,000-strong workforce in half to help the government achieve savings of £5bn annually rising to £15bn-per-year in just four years time.

The report said: “The public sector should be able to achieve a reduction in annual back office costs of around 20 to 25% by the end of the next three years. This is equivalent to a reduction of around £4bn from the estimated £18bn annual UK spend on back office operations.”

The report confirmed threats in a leaked letter from the Treasury to all government departments in February that indirectly warned thousands of back office jobs, including HR, would be slashed as the government looked to claw back the initial £5bn-a-year in efficiency savings.

Mark Serwotka, PCS general secretary, said: “It is increasingly apparent that these so called efficiency savings are spending cuts which we fear will result in real people with bills to pay and mouths to feed loosing their jobs. We would urge the chancellor to recognise today, as Harriet Harman [deputy Labour leader] has already, that you cannot cut your way out of a recession.”

Yet the report called for the government to speed up the introduction of central shared services departments, which would ultimately result in duplicated jobs and more redundancies. “[The government should] accelerate progress in central government shared services by consolidating existing shared back office centres… A similar drive towards greater use of shared services should be encouraged across the wider public sector,” the report said.

Chancellor Alistair Darling is expected to confirm which other departments will bear the brunt of the jobs cull in today’s Budget.

The Operational Efficiency Programme was commissioned by the Treasury last July to help the government achieve £30bn in savings by the end of 2011. After the interim conclusions of the report, the government added a further £5bn to the target.

The government said it has already cut 75,000 jobs and saved £26.5bn since the initial Gershon 2004 Spending Review.

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