Civil Service Effectiveness Inquiry

Introduction

The Public and Commercial Services Union (PCS) is the largest trade union in the civil service. The union has approximately 180,000 members in the civil service and related agencies, bodies and contractors, including members in every government department and across all related agencies.

PCS members work across the civil service, primarily in administrative and executive officer grades, including in areas greatly affected by Brexit, including for example within the Home Office (the Border Force, Immigration Enforcement, UK Visas and Immigration (UKVI) and HM Passport Office).

Our members are part of a highly dedicated workforce who consistently prove willing to go above and beyond their usual duties to keep vital public services running. However, with already stretched resources as a result of huge cuts to departmental funding and the loss of over 100,000 jobs since 2010, and no clarity of what will be expected due to Brexit, there is much uncertainty regarding their future roles.

The decision to leave the EU will have an impact across the civil service in all government departments, agencies and NDPBs, and the jobs our members carry out and services they deliver will be some of the most directly impacted. It was therefore concerning that government ministers had not prepared for the potential of a Leave vote at the time of the EU referendum. It is even more alarming that with just 16 months left until the Brexit-date there is still very little clarity and direction about what the government’s Brexit plans are and what preparations are needed to ensure the effectiveness of the civil service.

PCS already has serious concerns over civil service staffing levels. Our position on the staffing cuts since 2010 has always been that they were dangerous, unnecessary, and ideological. The cuts were swingeing, with no regard for the current or future need for resources and skills.

The added demands on staff that Brexit will inevitably bring only adds to that concern. Many departments, including the Home Office, which will be greatly affected by Brexit, are already suffering from a culture of excessive working hours caused by staffing levels that do not adequately reflect demand. In the Border Force for example, the lack of staffing has already meant members diverted from the secondary, customs work, to the primary immigration control point.

While we engage in the long, complex process of withdrawal from the EU, there will be no let-up in the demand for existing services. All cuts plans must be halted immediately to allow proper engagement with the trade unions on the staffing and resources that are needed.

PCS believes that a quick way of improving the efficiency and effectiveness of the civil service would be for the government to restore pay bargaining for the entire civil service at national level. PCS’ has proposed the eradication of the duplication inherent within a system that requires over 200 different bargaining units to conduct parallel sets of pay negotiations, engaging hundreds of officials in the civil service. The solution is to restore one set of negotiations for all civil servants at national level.

We recognise that there are major opportunities in delivering information services digitally. However, digitalisation should not be driven primarily by cost savings at the expense of inclusive services. Digital services are part of a modern civil service but they need to be balanced with adequate levels of skilled staffing to ensure that all citizens can access public services. Not all citizens that depend on public services are capable of operating digital systems. Without due care these citizens can become socially excluded. Services must be responsive to the needs of service users and communities.

The current public sector pay restraint policy must end. Civil service pay should be simplified, based on sound principles of equal pay, providing staff with a good standard of living and should rise at least in line with inflation. PCS is calling for an end to the pay cap, with pay increases above the rate of inflation to compensate members for the cut in their living standards, of 5% or £1200, whichever is the greater; a Living Wage of at least £10 per hour on all pay policies and contracts; and national bargaining at Cabinet Office level on pay for all staff in the Civil Service and its related bodies.

Civil Service capability

PCS believes the civil service is not adequately resourced to be fully effective. The civil service has seen over 100,000 jobs cut since 2010. Prior to this there was an additional period of reduction in headcount. As a result of years of cuts to both staffing numbers and funding, we believe that the civil service currently does not have the capacity that it needs to be fully effective, even before Brexit.

Civil service employment in 2010 was 527,500. It fell to its lowest point post-second world war in 2016, at 418,300, and the latest ONS figures show it to be 423,000. The fact that some departments are now being forced to employ more civil servants underlines the case that too many jobs have been cut since 2010. Instead of doing more to reverse the decline and provide the resources that trade unions, cross-party MPs, select committees, and civil servants say are necessary, the government has continued to slash ministerial budgets and continued with programmes of office closures and further job cuts.

The civil service does not have the resources to meet their public service obligations. This is having a very tangible effect on how the public engages with public services, particularly in terms of contact with HMRC call centres and Department for Work and Pensions contact centres.

The impact of the job cuts is not simply a lack of staff. It is also a loss of experience and skills. The DWP employs over 30,000 fewer staff than in 2010. Many highly experienced, fully benefit trained processors have left the Department, to be replaced by new staff given a few weeks of training, rather than the years of training and consolidation previously invested that allowed staff to deal effectively and timeously with claimant queries.

DWP is already experiencing considerable pressures as a result of the staffing and budget cuts. In Universal Credit, the initial tranches of new staff were brought in as Fixed Term Appointments (FTAs) of 12 to 18 months. Staff turnover amongst this group was extremely high – in one cohort, “in month” attrition reached 28%. Overall, attrition rates are 10% in Universal Credit. This is double what has been considered normal in a settled period and reflects the stress and strain being placed on staff to deliver a new benefit without adequate support and resources to do so.

The civil service has become increasingly top-heavy from 2010. Administrative responsibility level accounted for 47% of the civil service in 2010, but just 35.7% in March 2017 (a drop of more than 11%). As lower paid workers have borne the brunt of cuts, the proportion of senior staff has increased, leading to an increase in the official median wage that is not reflected in people’s pay packets as the 1% cap continues to hit living standards.

The government has not been clear what skills it is looking for in the current and future civil service. Changes to the Civil Service Compensation Scheme were aimed at reengineering the workforce, making it easier to sack employees, while also expanding the civil service apprenticeship programme. However the reality is that this process has been hugely costly in terms of investment and training. A lack of cross-departmental guidance and standards from the Cabinet Office has resulted in a lack of transferable skills and resources between departments. We believe that the Cabinet Office Workforce planning report does not provide holistic oversight or guidance on matching civil service workload to resources, leaving it instead to individual departments. Departments are poor at self-managing this.

Another inefficient effect of delegated status for civil service departments concerns banding. Departments are responsible for setting staff banding and there is no requirement for this to match other departments. Pay rates for the same or equivalent jobs vary between departments. This not only creates disparity between pay levels, it creates problems in terms of the responsiveness and adaptability of the civil service to demand and slows down and often prevents the effective transferral of resources.

PCS believes that the government must review the make-up of the civil service as part of an urgent review into the resources needed to meet current and future demands. Ministers must work with trade unions and develop improved bargaining and negotiating structures to harmonise grading structures and pay rates, which will in turn, improve and increase transferability of skills and the ability of the civil service to react quickly to need.

Implications of leaving the EU on Civil Service capacity

Departments have been asked to prepare for Brexit on top of pre-referendum manifesto commitments, as well as continuing to implement spending and headcount reductions. The government's Brexit white paper said nothing about the resources the civil service will need to cope with withdrawing from the EU. This reflects a broader refusal by government to plan ahead and anticipate future pressure points, resulting in a chaotic and unplanned approach which creates confusion and uncertainty.

The main issue facing our members across the civil service is the uncertainty about what the laws, processes and procedures will be following exiting the EU. As there is little detail emerging from negotiations between the UK government and the EU regarding what any deal might look like, the government and its departments of state are extremely vague about what will be required post March 2019.

While some of this is an inevitable consequence of the nature of negotiations, uncertainty has been created unnecessarily by the government failing to engage effectively with its own workforce via their elected representatives in the trade unions. No guidance has been issued by many departments, including the Home Office and HMRC, either to staff or to staff representatives. Any discussions relating to Brexit have been within general meetings about wider issues and no meetings have been convened specifically to address the issue. In the Home Office, our negotiators have only spoken to Directors about possible implications and staffing requirements in an informal manner. There has been no formal consultation or communication.

PCS wrote to the head of the civil service, and departmental permanent secretaries, one week after the referendum result to request information on work that would be affected by the vote and discussions on the resources needed, and to say all cuts plans should be suspended in the meantime. To date, no UK department has adequately responded, with HMRC – that has joint responsibility for customs work, yet which is planning to close all but a dozen of its 170 offices, with further job cuts planned – insisted in reply that nothing will change.

In 2005 HMRC employed approximately 105,000 FTE staff. In 2016 the figure stood at approximately 58,000, an almost 50% reduction. Giving evidence to the Public Accounts Committee, the Chief Executive of HMRC stated that HMRC may need to employ up to 5,000 extra staff and will need “considerably more” money to cope with Brexit next year. Government ministers have suggested an additional 5-8,000 staff could be recruited to cope with Brexit, yet refuse to pause or reassess the current programme of cuts. HMRC’s insistence that nothing will change as a result of Brexit is clearly at odds with its Chief Executive’s evidence and is indicative of the chaotic approach being adopted.

The Government’s insistence on cutting staff numbers in HMRC is also economically illiterate. Our studies show that one member of HMRC staff will typically pull in a taxation yield of at least £600,000 per year. At a time when the Government is pleading poverty, there is clearly no basis for making staff in HMRC redundant; instead, they should be recruiting them to improve the tax take and, in turn, the health of the nation’s finances.

HMRC’s Chief Executive also stated in evidence that “I do not believe it possible to take 250 existing programmes of change and simply add Brexit on. I think you reach the point of organisational capacity and capacity.” PCS believes the government should listen to civil servants and pause all existing cuts and closure programmes, reviewing what resources are needed, and where, with the trade unions.

The relationship between Ministers and officials

Around 70% of civil servants have public-facing jobs, for example paying pensions and other benefits, working in Jobcentres, processing visa and driving licence applications, checking passports, working in courts, managing prisoners and collecting taxes. Only an estimated few thousand civil servants are likely to have regular and frequent contact with government ministers (of which there are around 100). In respect of the grades that PCS represents, our members would see their primary loyalty being to the public because they are the front end of public service delivery.

When there is a change of Minister, it is important for that Minister to be clear about what their vision is for the civil service and what they want that public service to do. If that is communicated in a proper way to the workforce and it gets them engaged, they will buy into that delivery model. This has to run hand in hand with a dividend for the workforce. There has to be job security, good terms and conditions of employment and pay levels that enable a good standard of living. We are clear that this is the best way to ensure an effective, high performing civil service workforce that is focused on public service delivery.

Around thirty years ago there was perhaps a perception within the public sector that you would end up with a degree of job security and, on that basis, you didn’t look comparatively at the private sector. That job security has now been eroded and, after seven years of pay restraint, things have got acutely worse. Public sector pay fell below that of private sector pay in 2016, by 1%. In 2010, before pay restraint was introduced, it was 4% above that of the private sector.

Civil servants, the government’s own workforce, are suffering from the cumulative effect of years of pay restraint and cuts to take home pay. PCS commissioned research revealed that civil servants pay has been cut by £3000 on average since the policy was introduced, yet the government plans further years of real terms cuts in pay to come. PCS has just balloted its members on a nearly 50% turnout: 99% of them said the pay cap should be lifted and funding should be provided for an above inflation pay rise, and 80% of them said they were prepared to take industrial action if there is no change following the Budget.

PCS is calling for an end to the pay cap, with pay increases above the rate of inflation to compensate members for the cut in their living standards, of 5% or £1200, whichever is the greater; a Living Wage of at least £10 per hour on all pay policies and contracts; and national bargaining at Cabinet Office level on pay for all staff in the Civil Service and its related bodies

The relationship between ministers and civil service trade unions is poor. PCS believes the civil service should be a model employer. Ministers should respect and build on statutory and contractual employment rights, promote diversity, encourage trade union membership, and sustain good industrial relations through collective bargaining and trade union representation. There is a lack of understanding across government and by Ministers of the value and role of trade unions amounting to a refusal to engage effectively. The refusal to engage and work with trade unions has led to a significant rise in High Court cases and Judicial Reviews where departments have failed on their statutory duties, incurring considerable – avoidable – costs to the taxpayer. This is typified in the government’s approach to changes to CSCS which resulted in the High Court ruling against the government and in favour of PCS.

In conclusion, PCS believes the civil service is not adequately resourced to be fully effective. Our position on staffing cuts since 2010 has always been that they were dangerous, unnecessary, and ideological. The cuts were swingeing, with no regard for the current or future need for resources and skills. The added demands on staff that Brexit will inevitably bring only adds to that concern. We believe the government must pause all office closure and job cut programmes, work with civil service trade unions to establish what resources are needed, and where, and provide those resources needed. Public sector pay restraint must end and the government should reintroduce national pay bargaining for the civil service and its related bodies.

December 2017