4 Staff reductions
35. The Chancellor announced in his budget statement
that the DfES would be reducing its staff numbers over the coming
years:
"…the Government have also decided that
in the spending review all Departments will cut their administration
budgets by at least 5% in real terms by 2008, and as part of his
efficiency programme, the Secretary of State for Education and
Skills is today announcing a 31% reduction
in headquarters staff by 2008, which will enable him to direct
more funds straight to schools and spend more cash per pupil in
the classroom."[27]
36. This means that staff at the DfES would be reduced
by 1,460 by April 2008, with a reduction of 850 to be achieved
by April 2006. The Department says that "Work is in train
to develop detailed plans for taking this forward".[28]
The Permanent Secretary told us:
"The Prime Minister and the Chancellor together
have been setting a challenge to government departments to think
about what the role of the centre of government is and how much
resource needs to be spent on it and that is something they have
done well before the Budget …we have been working on this
for about five or six months."[29]
He added that the saving on staff costs "[i]n
very crude terms …is about £70 million".
37. We asked the Secretary of State if he thought
the reduction in size of the Department would affect his role,
making him less accountable for operational activities and concentrating
on broad strategy. He replied:
"…I believe that one of the consequences
of reducing what we do is to reduce a lot of interactions that
take place which do not necessarily need to take place… Will
it reduce operational responsibility for any aspect of what is
happening? No, I think it will increase it because it will make
it much more transparent what we are doing and we will get greater
clarity… We have to say that the reduction in numbers of
people is not about making them work harder but about us being
more candid about what we can do and what we cannot do and sharing
our responsibilities with others more effectively".[30]
38. This theme is developed in the Five Year Strategy:
"The core role of the Department will be to?
support Ministers in providing
strategic leadership to the system. That means setting the overall
strategic direction and the outcomes that are being sought for
children, young people and adults; developing powerful and relevant
evidence-based policy; and having the capacity to engage with
those in the system so that they understand and share the direction
of travel… The corollary of this is that the Department itself
will do less direct management and direct service delivery. It
will increasingly be the 'system designer', setting in place the
framework of legislation, incentives, information and funding
to make change happen. It will use the guiding principles of this?
strategy - personalisation
and choice, diversity, freedom and autonomy and stronger partnerships
- to underpin its work."[31]
39. It is entirely right that every organisation
should review its way of working to ensure that it is operating
in the most efficient manner possible and that it is clear about
its purpose and functions. We asked David Normington how the reduction
in staff had been determined. He said that the sequence of events
had been that Departments were asked to examine their functions
and come up with proposals for change, which in the case of the
DfES resulted in the proposal for a 31% reduction in staff. When
we asked the Permanent Secretary to confirm that the figure had
come from him, he replied:
"Yes, but when the Prime Minister and the Chancellor
ask you to look at your organisation with some clear objective
in mind, but not a figure, you take it seriously, do you not,
and that is what I did."[32]
40. He told us that the changes would come about
through three main routes:
"firstly, through a major re-engineering of
the system…, so fewer funding streams, fewer planning arrangements,
fewer accountability systems, and fewer initiatives; secondly,
sorting out some of the overlaps between us and our NDPBs…;
and, thirdly, through what all organisations should do from time
to time, which is purely bearing down on your costs and looking
for efficiencies, particularly in your support functions and doing
that by benchmarking your HR and your finance functions against
external benchmarks."[33]
41. We received a memorandum from one of the unions
with members at the DfES which was critical of the staff reductions
and reorganisation. The Public and Commercial Service Union (PCS)
told us that:
"…our view is the reorganisation of the
DfES on the basis of large scale job cuts risks compromising the
translation of public expenditure on education and skills into
efficient and effective delivery of policy…PCS' view is that
the under-resourcing of the Department will result in a human
cost and increased workloads as well as an increased level of
inefficiency that combined will pose a high risk to the successful
working of the DfES."[34]
42. PCS expresses particular concerns that the staff
cuts have not been adequately justified and the reorganisation
has not been properly explained:
"PCS has not been able to elicit any answers
of substance about how the DfES will compensate for losing roughly
a third of its staff: the Department has made much of becoming
more 'strategic' in how it works, but it already occupies a highly
strategic role, and while PCS believes that such a role is appropriate
to the Department as the lead organisation within its sector,
it [is] still unclear how the organisation of work will be revised
and how stopping certain DfES functions will allow the Department
to take on a more strategic role…. Job cuts will not guarantee
that public expenditure is used more efficiently or effectively,
and we note that the Department has not, despite continual prompting
by PCS, produced a risk analysis of the effect of the cuts on
front line services."[35]
43. All of this is taking place against the background
of a number of Government initiatives to improve efficiency and
reduce cost. The Gershon review of efficiency[36]
was part of the process which led to the DfES announcement of
reductions in staffing, and has made wide-ranging recommendations
for the whole public sector, not just central Government, involving
matters such as procurement, payment systems and relocation of
staff away from London and the south-east. This last was also
the subject a separate review by Sir Michael Lyons.[37]
44. When we talked to the Permanent Secretary about
the Lyons review and the possibility of staff relocation he told
us that 70% of the staff of the Department and its NDPBs were
already based outside London, and that the DfES was regarded as
a department which took relocation seriously:
"I am not anticipating that there will be large
numbers of departmental staff relocated in the immediate future
because I cannot handle a run-down of the size that I am describing
and a relocation of any significant size as well; that is just
a management challenge too far really. However, a larger proportion
of the jobs which I am describing will be lost will be lost in
London".[38]
45. The DfES is currently subject to a huge amount
of change. It has just taken on responsibility for children's
services, with new and demanding plans for co-ordination of services.
As we discussed in the previous section of this report, it has
implemented two changes to the funding system for schools in the
last two to three years, the second of which may be regarded as
work in progress, and there is clearly a continuing and expanding
need for involvement by the Department in order to make sure that
the system operates efficiently and effectively. Given the
school funding problems encountered in the spring of 2003, the
risk to the Government of an ill-prepared or poorly-managed move
to central funding could be profound. In the midst of these
changes, it is being asked to restructure for reasons of efficiency
and economy to bring about savings of £70 million.
46. We accept the principle of the Gershon review's
proposals to increase efficiency in public services and to redistribute
resources to the front line. However, the 31% proposed cut
in DfES staffing has clearly not been effectively worked through.
It may or may not produce the strategic department that the Government
wishes to see. Under the Gershon proposals there is an overall
requirement to deliver £4.35 billion worth of efficiencies
within the DfES by 2007-08. Overwhelmingly, efficiencies will
have to be found within schools. The process of delivering such
major efficiencies will inevitably need some central oversight.
There is a risk that ill-thought-through changes to the DfES administration-especially
during a period when schools' funding is to be decoupled from
local government-could simply lead to demands for the creation
of a new arms-length regulator, which would negate the Gershon
efficiencies
47. It would be instructive to have greater insight
into the process that resulted in a staff reduction of 31% being
considered achievable. What analysis of the functions of the Department
was undertaken? What assessment of future workload? Was a risk
assessment undertaken once the plan was worked out in order to
see where the problems lay and whether the Department could cope
with them? In order for us to understand fully what is being
proposed, the Department should make public both the detailed
reasoning behind the headline 31% staff reduction and a comprehensive
assessment of the risks in making that reduction and the ways
in which they are to be managed. In particular, the Committee
needs to have evidence that schools' funding will in future be
overseen effectively without a large new bureaucracy.
27 HC Deb, 17 March 2004, cols. 331-2. Back
28
DfES annual report, page 101. Back
29
Q114 Back
30
Q 271 Back
31
DfES: Five Year Strategy for Children and Learners, p 102, paras
4 and 5. Back
32
Q 117 Back
33
Q 114 Back
34
Ev 51, paras4 and 7. Back
35
Ibid, para 9 and 10. Back
36
Releasing resources to the front line: Independent Review of
Public Sector Efficiency, Sir Peter Gershon, July 2004 Back
37
Well placed to deliver? Shaping the Pattern of Government Service,
Sir Michael Lyons, March 2004 Back
38
Q 131 Back
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