05/06/2015 00:01 BST | Updated 04/06/2016 06:12 BST

Civil Service Cuts 'Leave Risks'

Whitehall has failed to plan properly for the potentially-damaging consequences of dramatic cuts to the civil service or the implications of reductions to come, the public spending watchdog has warned.

The National Audit Office (NAO) said squeezing recruitment as part of an austerity drive that has seen staff numbers slashed by 18% sine 2010 had created a "generational gap" that could result in a serious skills shortage.

And it warned that Government departments had failed to implement proper strategies in preparation for the next round of public spending cuts being demanded by Chancellor George Osborne.

Axing almost 90,000 civil service jobs between 2010 and 2014 has successfully reduced the wage bill by £2.29 billion a year - despite a rise in the proportion of civil servants at the upper end of pay bands due to a reduction in clerical work and need for better IT skills, the NAO report said.

But it was achieved in large part by freezing recruitment, meaning the workforce was older and storing up trouble for the future, it said.

In four years the proportion of staff in their 20s has slumped from 14% to just 9% while those in their 50s now make up 31% compared with 26%, the NAO said, leaving a "generational gap that may be difficult to address in the medium term".

"It is fair to assume that low levels of recruitment and the creation of a generational gap potentially heightens the ongoing risk that the civil service will not have the talent and skills needed for future challenges," the report concluded.

"For example, we consider it likely that increased use of technology will be a key component in future operating models of departments. Without the right type and level of recruitment, departments may not have the skills needed to adapt to new information-led ways of working.

"Although there is a growing awareness within departments of this risk, they do not yet have a clear understanding of either the potential consequences or any necessary management action."

NAO head Amyas Morse said: "Departments have significantly cut their staff numbers and costs in the last five years but not enough planning has gone into making sure that, over the longer term, the reductions already made and any required in future are sustainable and do not damage the delivery of public services.

"The centre of government must do more to help departments meet these challenges, including managing the heightened risk of a shortage of vital skills."

With the Treasury seeking another £13 billion of spending cuts to eliminate the deficit by 2017/18, the NAO cautioned that not enough has been done to prepare for the impact of even smaller staff numbers.

Strategic management was essential "to reduce the risk of damaging public service delivery", its report said, but "transformation in departments is not as widespread or advanced as we expected".

A detailed analysis - centred on HM Revenue and Customs, the Department for Transport, the Department for International Development and the Ministry of Defence - found "weaknesses in their approaches to developing strategic workforce plans, which could hinder staff cost reductions".

"Departments' progress in developing and implementing long-term operating models is not advanced enough to sustain existing reductions and to be well placed to make the expected reductions during the 2015–2020 Parliament," it concluded.

They "continue to lack comprehensive and reliable information on the skills their workforce possesses and their needs" and ascribe deficiencies to pre-general election "uncertainties over a future government's priorities and whether their departmental responsibilities will change".

Mr Morse said: "Not enough planning has gone into making sure that, over the longer term, the reductions already made and any required in future are sustainable and do not damage the delivery of public services."

A Cabinet Office spokesman said: "We note the report from the NAO and will review its recommendations.

"The Civil Service is the smallest it's ever been since the Second World War, saving taxpayers £2.4 billion last year, while continuing to deliver leading public services.

"We are working to ensure that the Civil Service is more skilled and diverse, and have made good progress in building strong commercial, digital and project delivery skills. We will continue to focus on these areas."