17 November 2006
The Revenue and Customs department this week launched a £2.5bn review that will initiate thousands more civil service job cuts and close offices across the UK over the next five years.
Department officials were expected to announce the wide-ranging, two-year consultation on November 16, after Public Finance went to press.
Whitehall sources told PF that the consultation will outline how the R&C intends to meet the remaining 5,000 of its 12,500 head count reduction target by 2008. It will also assess staff appetite for voluntary redundancies and early retirement schemes.
The review will also identify efficiencies that the department must make to meet a separate target to reduce its annual operating budget by 5% annually between 2008 and 2011, imposed by Chancellor Gordon Brown following his 2006 Budget. Those efficiencies could also be linked to a government-wide target to sell £30bn worth of assets and buildings.
The R&C, which employs around 120,000 staff, said the consultation was 'merely a commitment to review' its current operating arrangements, so that it could 'improve its working practices and achieve better value for money for taxpayers' following the merger of the Inland Revenue and Customs and Excise departments.
But civil service trade unions claimed it was simply a cost-cutting exercise that would initiate damaging job cuts, particularly in 'fragile' local economies in Wales, Scotland and the north of England.
A R&C spokeswoman confirmed that the department was looking closely at the potential for office 'mergers' because there were 'many former C&E and IR offices close together.'
The R&C has already completed a review of its London offices and should complete assessments of its major urban offices by the end of 2007, starting with the Southeast region.
Mark Serwotka, general secretary of the Public and Commercial Services union, which represents 84,000 R&C staff, warned that the cuts would damage services to the public and businesses.
'The department is talking about consultation, but we all know this is going to lead to job losses and office closures, and deny access to vital services,' he said.
'Sir Peter Gershon, after his efficiency review, warned ministers that to go further than his suggested cuts “would risk damaging services.” But the department has planned more. We would warn officials not to go down this route.'
The PCS has already held strikes over Whitehall job cuts – and this latest move will herald calls for further walk-outs.
R&C sources confirmed that the department would set aside £500m per year, for the next five years, to undertake its restructuring.
Around £85m will be allocated for staff training, while £100m will be used to merge computer systems.
A PCS spokesman said the hefty restructuring budget was a 'heavy hint' that the department could be required to pay-off substantial numbers of staff.
PFnov2006
