'This is no time for a novice.' Gordon Brown’s jibe at Davids Cameron and Miliband at last year’s Labour conference was surely one of the better lines of his premiership.
And yet his comment is equally pertinent to Whitehall’s civil servants grappling with this new age of austerity.
After ten years of spending growth, the public sector has suddenly been confronted by the fact that real fiscal pain is on the way – whichever party is in power after the next election.
Already, politicians and others are jostling for position in this debate. While the CBI has called for a drastic deepening of spending cuts, the Tories think they will be able to reduce Whitehall by up to a third and cut more than £1bn from NHS management costs. And Ed Balls’ recent pledge to slice £2bn from the costs of school mergers suggests that Labour, too, is ready to swing the axe.
But for Whitehall’s mandarins, preparing for purdah is one thing; preparing for spending cuts on a scale not seen in a generation is quite another.
Although we constantly hear that government must ‘do more with less’, whether Whitehall has the answer to this oft-repeated sound bite remains open to debate.
For starters, reduced spending requires a different mindset. The system is currently designed to drive forward policy agendas that involve consultative decision-making processes and the requirement to provide cash to make progress.
But civil servants must adopt a new approach; one that looks at each line-item of spending and asks what can be reduced, and questions how things can be done differently.
Government finance professionals – too long in the background of Whitehall departments – have a crucial new role. Much depends on their ability to drive through drastically reduced budgets, as well as their capacity to refuse requests to increase spending. Support from their permanent secretaries here will be vital.
And notwithstanding the Treasury’s plans to halve its capital grant to local government from £44bn to £22bn in 2013/2014, civil servants must redouble their efforts to become more collaborative. A greater sense of sharing across central government (including process, systems, capability and knowledge) will result in a simplified system that will free up resources – both across Whitehall and the wider public sector.
A storm is coming but rather than run for cover, civil servants must get ready to move to this new environment. This is no easy task, but there is no alternative.
James Close is a partner in Ernst & Young LLP’s government services practice
