Conclusions and recommendations
1.Skills shortages in the civil service are responsible for delays, inefficiencies and increased costs in government projects. We repeatedly see evidence of this in the projects and programmes we scrutinise—some of which continue to be plagued by the same issues year after year. For example, a lack of skills in the Home Office was at least partly responsible for the 3-year delay now facing the Emergency Services Network programme. The Cabinet Office acknowledges that the civil service has major skills gaps in the science, commercial and digital sectors, as well as in the management of large projects. These gaps impede progress and can necessitate the use of high-cost consultants, as has been the case for High Speed 2 and Crossrail. Despite us repeatedly highlighting the root cause of these issues, government has consistently failed to adequately address the lack of skills, meaning delays, inefficiencies and budgetary overruns have continued to proliferate. This lack of progress undermines repeated assurances by government that they are committed to tackling the issue. In our recent report on Whitehall preparations for EU Exit we drew attention to how government can also be too quick to spend money on consultants to undertake work that could actually be better done by existing civil servants. The Cabinet Office estimates the current cost of using consultants across government is £980m. This amount is likely to increase in 2020–21 because of the need to fill gaps in capacity and skills as a result of covid-19 and EU exit. The Cabinet Office plans to minimise this cost in future by making the upskilling of the civil service a key focus of its current civil service reform process.
Recommendation: The Cabinet Office should work with functions and departments to identify skills gaps and should prioritise resolving these as part of the Civil Service Modernisation and Reform process.
The current cost of using consultants to fill these gaps should be considered as part of this work. The Cabinet Office should outline in its Treasury Minute response how it plans to reduce reliance on external consultants and mitigate these costs in future.
2.The civil service struggles to attract and retain specialist staff. Since 2010 the civil service has been subject to pay restrictions, which have limited its ability to offer progressive pay packages to staff. Areas such as Digital and Commercial have struggled to recruit and retain specialists because there is strong external competition for these skills. Functions have introduced their own pay flexibility measures to attract external talent and increase skills retention. However, pay flexibility creates pay disparities between departments and an internal market for specialists which risks some government departments and projects missing out on the skills they need. Some functions, such as Digital, have introduced measures to ensure that pay is consistent for similar roles across all departments.
Recommendation: The Cabinet Office, HM Treasury and functions should outline in the Treasury Minute response how, and by when, they will review pay exception case processes across the functions to address current pay disparities and avoid creating an internal market for specialists.
3.There is still a long way to go to ensure the civil service retains and promotes those from different backgrounds. The more diverse an organisation, the better decisions it makes. The civil service has made a commitment to be more diverse at all levels across both departments and functions. To achieve this the Cabinet Office says it has made its recruitment processes fairer. This includes changes to how and where jobs are advertised, and to how interviews and selections are conducted. Functions are also now setting clear standards in relation to recruitment in order to try and address inconsistencies in the process. The Cabinet Office believes these changes will help to ensure that people from different backgrounds are encouraged into the civil service. Alongside this, the Cabinet Office is aware of the need to improve the retention and progression of minority groups. Whilst we welcome the Cabinet Office’s commitment to diversifying the civil service, more needs to be done to improve the intake and retention of minority groups and those with different socio-economic backgrounds.
Recommendation: The Cabinet Office should write to us within three months setting out detailed and broken-down information on the retention and progression of staff from different backgrounds and its plans for further reform in this area.
4.Departmental data is not good enough to support functions’ development of comprehensive workforce plans. The Cabinet Office acknowledges it does not have the data it needs across all functions to accurately assess what skills the civil service has and where these should be deployed to maximise impact. Departments each have their own systems for collecting data on their staff, and as a result departmental workforce data quality and content vary. Some functions have undertaken their own data collection exercises with departments to get around the problem of workforce data quality. Dealing with dynamic challenges such as EU Exit and covid-19 has forced the Cabinet Office to improve its workforce planning and improve the quality of data available to functions. This exercise would see even greater improvement if the Cabinet Office had access to more granular workforce data.
Recommendation: The Cabinet Office should set out how it will work with departments to make sure workforce data is collected at the right level, to better address skills gaps and shortages.
5.Seven years on from their introduction, functions still have not developed clear plans to help maximise their impact, and lack strategic direction. The Department requires all functions to put in place their own ‘capability blueprint’. Blueprints should include a clear operating model and set out the organisational capacity for each function. They are also an important tool in managing coordination between functions and departments. So far, only the Commercial function has a blueprint, with the HR, Finance and Communications functions currently developing theirs. The Department believes that the Commercial function’s blueprint has made great inroads in improving commercial capability across government. Without clear plans, it is difficult for departments to fully exploit functional expertise.
Recommendation: The Cabinet Office and functions should work together urgently to complete capability blueprints. The Cabinet Office should write to us by April 2021 at the latest to confirm that these have been finalised.
6.Only a few of the fourteen functions have been able to demonstrate the benefits of their activities. Most functions have not been able to quantify their costs and benefits. The Cabinet Office admits there are difficulties measuring the impact of some functions, such as the HR function. Progress has been made in some areas: the Commercial function regularly collects data on the cost and benefits of its work and has a mature process for evidencing benefits; and the Digital function has undertaken analysis of the cost savings of moving to inhouse specialists rather than relying on external contractors. The Government Internal Audit Agency is currently working on compiling comparative data on costs and benefits for the functions. When complete this will allow the Cabinet Office to better benchmark functions’ performance and identify best practice. However, the quantification of costs and benefits and the measurement of impact is not yet common practice across the functions.
Recommendation: The Cabinet Office, HM Treasury and functions should agree a consistent methodology for measuring costs, benefits and impacts across all functions by July 2021 and report to the Committee on functions’ performance.
Published: 11 December 2020 Site information Accessibility statement