Whitehall HR ‘could do better’ says government report

Whitehall HR functions are still not going far enough to make the necessary efficiencies and improve performance, a government report has admitted.

The Benchmarking the Back Office: Central Government report found “there is still a gap between current and desired HR performance” and has published benchmark data to help central government HR make efficiencies and improve performance in line with leading Whitehall organisations.

The report has been published as part of the Putting the frontline first: smarter government policy document released today by the Cabinet Office.

Ahead of Wednesday’s pre-budget report, expected to outline £10bn of public sector efficiency savings, the report called for more shared services within HR and for functions to produce better data so efficiencies could be made more effectively and across government departments.

The report said: “Some departments have made good progress in improving HR performance through applying lean processes and increased sharing, but there is still a gap between current and desired HR performance.

“To deliver significant cost reductions and improve HR professionalism, service and efficiency, HR operating models will need to be rationalised and there will need to be some sharing of HR services and expertise across the Civil Service.”

However, cutting jobs across HR functions could damage frontline services, the report warned. HR functions should instead measure three core areas to check that they are running efficiently. These include: the cost of HR as a percentage of the organisation’s running costs, the ratio of HR to full-time employees; and the average number of working days lost to sickness.

The Smarter Government benchmark data revealed that:

• Whitehall HR accounts for 1.8% of an organisation’s overall running costs. The median cost of HR in ministerial departments was 1.4%, but in agencies this rose to 1.8%.
• The median ratio of HR staff to full-time employees was 1:44.
• The median number of days lost to sickness was 7:1.

The smarter government report outlined how the public deficit – thought to have reached £175bn – would be halved in four years through measures including reducing the Whitehall pay bill by £100m and scrapping 123 of the 752 quangos.

But the government has already investigated the efficiency and performance of Whitehall HR functions through the capability reviews, which began in 2007 and highlighted HR issues like poor leadership and management in government departments.