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Thursday, Aug 11, 2022

Liz Truss plan to cut £11bn in Whitehall waste ‘ludicrous’

Liz Truss plan to cut £11bn in Whitehall waste ‘ludicrous’

Unions and experts attack Tory leadership candidate’s proposals for civil service savings

Liz Truss has been accused of making “ludicrous” claims as she vowed to cut civil service salaries and reduce expenditure to recoup £11bn a year in a “war on Whitehall waste” if she becomes prime minister.

But the Conservative leadership hopeful’s campaign, which received another boost with the backing of Penny Mordaunt on Monday, was forced to redo some of its sums within hours of releasing a series of proposals to reduce the cost of the civil service.

These included paying staff less outside London and cutting annual holiday allowance. Truss also promised to “tackle left-wing groupthink in government” and to scrap diversity and inclusion jobs, saying they “distract from delivering on the British people’s priorities”.

“As prime minister I will run a leaner, more efficient, more focused Whitehall that prioritises the things that really matter to people and is laser-focused on frontline services,” she said. “There is too much bureaucracy and stale groupthink in Whitehall.”

Trade unions and policy experts condemned the plans as unworkable and said Truss had dramatically exaggerated the potential savings that she claimed would amount to £11bn a year.

The most significant element of the plan is the introduction of regional pay boards, which she said would “tailor pay to the cost of living where civil servants actually work”. She claimed this would save up to £8.8bn.

Experts questioned whether the savings were feasible. Alex Thomas, programme director at the Institute for Government, said: “If you’re just talking about civil servants, that is ludicrous; it doesn’t add up at all. The whole [annual] civil service pay bill is around £9bn.”

He suggested regional pay boards might be a reasonable plan but would only generate anything like the savings mooted by Truss if applied across the public sector, including the NHS, schools and local government, which would be likely to involve a lengthy bargaining process.

“It’s not a bad thing for the public sector to be matching its salary scales to the part of the country it’s operating in. But you only get to these sorts of numbers if you’re talking about a doctor or a nurse or a school administrator, who already works outside London, receiving a lower salary,” he said.

The £8.8bn savings policy echoes a report by the Taxpayers’ Alliance published over the weekend, but the paper said it could be achieved by regional pay bargaining for the entire public sector of about 5.7 million people.

Government statistics show there are 478,090 civil servants on a median salary of £30,110. Boris Johnson had already pledged to cull a fifth of civil service numbers, or about 90,000 jobs.

Truss’s team claimed that relocating civil servants out of London would save £557m a year by avoiding the need to pay them a special weighting for working in the capital. However, they overestimated the saving by around £400m and were forced to correct it to £153m on Monday afternoon.

Addressing Truss’s suggestion that civil servants’ salaries outside London can distort the labour market if they are higher than the going rate locally, Dave Penman, general secretary of the FDA union, compared it to the approach of P&O Ferries, which was criticised for driving down staff pay and conditions.

“Instead of taking a page out of the P&O Ferries playbook, Liz Truss should be focused on ensuring that the civil service has the right people with the right skills to deliver high-quality public services and tackle the challenges the government faces right now, including the recovery from Covid backlogs and the new war on mainland Europe,” he said.

Other aspects of Truss’s plan include saving £2bn by cutting civil servants’ annual holiday allowance by two days. She also said she would ban civil service trades union representatives from using taxpayer-funded “facility time” to plan strike action.

Truss’s team said this would save up to £137m a year but unions insist there are already firm restrictions on how facility time can be used. Oliver Dowden, then a Cabinet Office minister, told MPs in 2019 that facility time accounted for 0.06% of the public sector wage bill, and the government was already reducing it.

Truss also announced that she would halt a proposed ban on “buy one get one free” deals on junk food, in an interview with the Daily Mail where she attacked “nanny state levies”.

Angela Rayner, Labour’s deputy leader, said Truss was “declaring war on herself with her fantasy recipe for levelling down”. She said that the Conservative government had overseen “epic waste” including during the pandemic.

“Her ‘tailored’ pay plans would level down the pay of northerners, worsening the divide which already exists. This out-of-touch government’s commitment to levelling up is dead.

“Now Liz Truss is pledging yet more cuts which will only worsen the backlogs we already have in courts, airports and GPs, leaving people waiting for passports, driving licences, and vital appointments.”

In her final message to Tory members as ballots were posted out, Truss vowed to “be bold” and “work relentlessly to deliver on our promises” to win at the next election, which she said would be in 2024.

In a final swipe at Rishi Sunak, her leadership rival, she said: “We cannot continue to have business-as-usual, and I have a bold plan to get our economy back on track.”

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