17 June 2005
Whitehall's largest department has been forced to suspend voluntary redundancy schemes in five regions because they are massively oversubscribed.
The Department for Work and Pensions this week confirmed to Public Finance that it has 'put on hold' early release schemes across the Northeast, Northwest, Southeast, Yorkshire and Wales, because it does not have the budget to meet staff requests.
A DWP spokeswoman said: 'Our expenditure budgets are tight and we are currently reviewing the requirement for further schemes, including those where, as part of early planning, we had already sought expressions of interest.'
The DWP, which employs more than 140,000 staff nationally, plans to shed 30,000 posts by 2008 as part of the government's £40bn efficiency savings plan outlined in Sir Peter Gershon's 2004 report.
Most of the head count reduction will be achieved through natural wastage, and senior managers have said they want to avoid compulsory redundancies across benefits offices, pension centres and central government. The DWP claims it released 1,300 staff through early exit schemes last year and reduced staffing levels by 11,000.
Department officials had expected a large number of new requests for voluntary redundancy from staff and had warned that not all applications would be granted. But DWP sources told PF that they were still surprised by the numbers applying.
One said: 'The sheer volume of applicants reflects the uncertainty surrounding civil service jobs across all departments, but particularly the DWP. The more voluntary packages the DWP can agree the better, but the message from inside the department is that resources are scarce.'
Senior DWP officials have now asked regional managers to review their business cases to identify 'critical exits' for redundancy packages.
However, civil service trade unions representing DWP staff said they have not been told what criteria will be used to determine 'critical' cases and have called for swift clarification.
Mapeley Steps PFI deal still costing the Revenue
The Inland Revenue's infamous Mapeley Steps deal is still dogged by problems four years after the department sold many of its buildings to a company based in an offshore tax haven.
A critical report on the deal by the Commons' Public Accounts Committee, published on June 14, warns that 'matters are still not straight' and reveals that a method of assessing the performance of the company managing the buildings 'has yet to be fully implemented'.
The Inland Revenue and Customs and Excise departments received heavy criticism for entering into a Private Finance Initiative deal with property company Mapeley in 2001.
Embarrassingly for the tax agencies, Mapeley quickly moved its profits from the deal offshore, to Bermuda, so that the Exchequer would not receive any capital gains tax receipts.
Mapeley also encountered financial problems after signing the deal. The firm had undercut competitors for the contract by £500m to get a foothold in the lucrative government property market, but it quickly ran short of cash because other expected revenue streams did not materialise.
The government refused appeals to help the company, but Mapeley's financial health has since improved, the report states.
PAC chair Edward Leigh said: 'Faced with Mapeley's financial difficulties in 2001/02, the departments found that they had not looked at possible termination scenarios or developed a fallback position to ensure business continuity.'
Leigh criticised the government for taking the lowest priced option for the deal without checking how robust Mapeley's proposal was. 'There were significant weaknesses in the way the deal was negotiated, which should be avoided in future PFI arrangements,' he concluded.
Cuts target on course as number of staff falls
The number of civil servants employed across Whitehall has fallen for the first time since the Labour government came to power, the Cabinet Office has reported.
Figures published on June 10, and independently assessed by the Office for National Statistics, show that civil service numbers in the UK fell by 5,000 between April and December 2004.
Including part-timers, the government employed 532,000 staff at the end of 2004.
Cabinet Office officials claimed that put the government on course to meet its planned reduction of 84,000 civil service posts by 2008.
There had been widespread scepticism about the government's target after recent estimates suggested that staff numbers were rising.
'The new figures, however, are more accurate because they are based on formal department head counts,' a Cabinet Office spokesman said.
The Department for Work and Pensions, earmarked for the largest number of job losses under the government's efficiency plan, shed the most staff last year, followed by the Inland Revenue.
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