Thousands of civil service jobs are to be axed by 2008 as a result of cuts in budget and the merger of Inland Revenue and Customs and Excise, the Chancellor, Gordon Brown, announced today.
The Department of Work and Pensions (DWP) is having to cut 40,000 staff posts and redeploy 10,000 posts over the next 4 years. The Chancellor believes the cuts will bring about a 2.5% annual efficiency saving from 2008.
CIPD Chief Economist, John Philpott said: “The CIPD accepts that efficiency savings can be made in Whitehall and throughout the public sector by way of improved technology, better procurement procedures and more effective management and HR practices” but he also cautioned against a crude war on waste, pointing out that a major cost cutting programme carries potential risks as well as benefits.
“Losing civil service jobs will take considerable HR effort given the necessary redundancies involved and the need to retrain redundant workers for new roles,” he said.
“If the process is not handled carefully, the war on waste could prove more difficult to pursue than the Chancellor and his waste warrior advisors suggest. Savings on the £20 billion scale mentioned in the budget – in line with those earmarked by Sir Peter Gershon – will only be possible in the context of an effective change management process.”
AccountingWEB, HR Zone’s sister community site, is on hand to guide you through Brown’s maze – examining the impact of new measures on small and medium-size businesses and drawing together all the budget announcements and analysis. See https://www.accountingweb.co.uk/budget for more information.
A full copy of Gordon Brown’s speech can be read by clicking here.
