Darling’s Budget cuts: a question of where, not if

An edited version of this post appears on Liberal Conspiracy.

It’s a targeted programme of efficiency savings that will free up cash for investment in frontline services. Or it’s a devastating round of cuts that will damage public services and prolong the recession.

Take your pick, but don’t be surprised. The seeds of the £15 billion savings in public sector bills announced in Alistair Darling’s 2009 Budget were sown in last year’s Budget, which launched the Operational Efficiency Programme. The OEP’s authors spent a year walking – literally, I’m told – round government departments looking for cost savings, before writing their report.

They must have shown Darling an advance copy, because on Budget Day – one day after the OEP report came out – Darling announced he agreed with everything it said.

With immediate effect, the state must now change the way it works. Back office functions will be benchmarked. Procurement will be collaborative. Commercial potential will be harnessed. All adding up, we are told, to £15 billion. What will it mean?

One civil service manager had little doubt recently. Noting that there were two people in his office whose sole function seemed to be refilling the laser printer, he suggested that in the circumstances, maybe they should go. Printer replenishment operatives aside, the OEP is the talk of Whitehall, even if it isn’t making civil servants quake in their boots just yet.

But it’s hard to see how a big chunk of the savings won’t come from a reduction in the head count. One saving the OEP report talks up is ‘shared services’, such as government departments using the same back office software. But assuming Alistair Darling isn’t going to be up all night BitTorrenting pirate copies of Sage, that will mean buying new software, or at least new licences. Some harmonisation has already been done: the Cabinet Office and Department for Work and Pensions, for instance, use the same payroll system. And of course, merging back offices means fewer staff: the OEP report approvingly cites the case study of a private firm that lost 70 per cent of its finance and HR staff.

So there must be job losses. There must also be privatisation – the Royal Mint, Land Registry and the Defence Storage and Distribution Agency (you learn something new every day) will be fully or partly sold off. Some of the jobless will go onto Jobseekers’ Allowance. At current rates, before any such redundancies, enough extra people will join JSA rolls in the next three months to staff every department, quango and executive agency in Whitehall.

Anyone who disagrees violently with the above will not perhaps be overwhelmed by the opposition. The only united campaign comes from the Trade Union Co-ordinating Group, a team of left-wing unions set up last year to provide an alternative forum for political action to the TUC and the Labour-affiliated unions. It includes the Public and Commercial Services Union, representing some 300,000 workers mostly in central government.

Contrary to a report in last week’s Guardian, the TUCG is not meeting MPs this week to discuss how to fight the Budget. It’s having a routine business meeting, which will cover the same issue, amongst others.

Even if the unions were lobbying MPs, they’d be up against massive odds. Because when Darling rubber-stamped the OEP report, he also endorsed the complex machinery of cost-cutting it will set up. The Treasury will establish a “value for money review group”; each department will have a minister responsible for “championing value for money”; there will be operational reviews, systems reviews and six-monthly asset management and sales reviews.

In short, unless the Finance Bill that passes the Budget into law is stopped in its tracks in Parliament – which it won’t – the wheels of efficiency savings will be grinding away before anything can be done about it. It looks like the argument will now shift to what gets the chop, and when.


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