Liberal Democrat plans for Civil Service modernisation

Written by Dr. Vincent Cable MP, Liberal Democrat Shadow Chancellor of the Exchequer and published in Liberal Democrats In Business on Tue 30th Mar 2004

What the announcements made by the Chancellor earlier this month on the Civil Service gained in headlines and publicity it lacked in coherence and critical thinking. There is a broad consensus that the Civil Service needs radical reform; government cannot afford to be wasteful with taxpayers' money and should seek the highest standards of efficiency as seen in private enterprise in our public services. The problem is the Chancellor's proposals following the Lyons review and the widely spoken of (though not yet released) Gershon report while useful in themselves do not add up to a coherent view of administrative reform and are decidedly timid.

The 40,000 headcount cuts have caught the headlines, but a substantial number relate to cuts already announced by the DWP. There is little detail as to where the cuts will be made and there is a suspicion that they will involve front line junior staff work in benefit offices rather the senior managers.

I believe that there is a need to reform and modernise the Civil Service but it must be done with both rigor and sensitivity, not announcing cuts to the media in the hope of a positive headline, but in the process further undermining morale in the Civil Service. Any private company caught making this sort of announcement would have been attacked from all quarters. Indeed it will soon become illegal to make such decisions without prior consultations.

Relocation of the civil service is a well established success story. Government agencies have already successfully relocated without loss of efficiency such as the cases of DVLA, the Passport agency or the contributions agency. This process should be taken much further. Electronic communication and teleconferencing make it straight forward to work at a physical distance from Whitehall. Surely the only grounds there should be for civil servants needing to work in London are if they are in regular face to face contact with ministers or are directly involved in delivering policy to the London population? I find it extremely hard to believe that this is the case for all but 18 workers out of 1152 in the Treasury, as the Lyons report would have us believe.

There is an unnecessary phobia about leaving London. Over 85% of the UK population does not live in Greater London, so why are the vast majority of the senior jobs in the Civil Service based in the Capital? Those who are not in regular contact with minister's can easily be moved to the major provincial cities and towns of the UK, harnessing modern technology so that these departments can work easily with colleagues from distance. This is not some pie in the sky idea but merely following the example of private countries. For example ESSO appreciating the benefits of relocation have recently moved out of London all together.

The most immediate and tangible benefit of relocation is the savings it makes of public money. Liberal Democrat research shows that moving the Treasury and its non departmental bodies to Liverpool for example would save £500 million over the lifetime of a parliament. As a result of differentials in rent and savings from London weighting in total over £2.5 billion could be saved over the life time of a parliament through a comprehensive relocation of Civil Service departments throughout the provincial cities of the United Kingdom.

Relocation of large numbers of Civil Servants out of the capital will also have the benefit of taking away some of the strain placed on the services of an overpopulated capital as well as helping stabilise the asset bubble in the housing market. Moving staff to provincial cities such as Liverpool, Leeds or Glasgow will also help to foster increased economic growth outside of the South-East. For Civil Servants themselves who have moved there will be in many cases a better quality of life with more space, greater spending power, shorter commuting times and more affordable accommodation.

Modernisation of the Civil Service will be difficult and it must be done with consultation, it can though, as we know from past experience be successful. Tough choices must be made if we are to get value for money from public administration. The government must decide on its priorities and then as I have proposed change the system of the Civil Service to ensure that these priorities can be delivered in the most efficient way possible.