Thursday, July 20, 2006

Is This How Gordon Brown is Fiddling the Gershon Figures?

Two years ago Gordon Brown announced that the governnment intended to £21 billion of public money by getting rid of 80,000 civil servants. No government department, quango or local authority would escape the Gershon axe, we were told. Regular updates were given by the Chancellor trumpeting first of all £2 billion of savings, then £6 billion and most recent of all £9.5 billion. The trouble is, no one, least of all the National Audit Office can work out where he is getting these figures from. Radio 4's PM programme highlighted the issue yesterday.

This report prompted a reader to email me with some very interesting information regarding Camden Council in London. I have spent much of the day trying to get to the bottom of it, and being passed from pillar to post within Camden Council. This is what my correspondent said...

A few months ago, I was chatting to a senior IT work contact at Camden Council, who told me everyone was having to re-apply for their jobs, and undertake interviews. I'm not sure if this was council-wide, or just the IT department. Of course, all we're 'successful applicants' and were re-hired under a new job-title/contract. When I asked why, I was told it was to meet Gershon targets, as by firing/re-hiring the 'lost' jobs counted towards Brown's job cuts.

If indeed it is true what Camden are doing you can bet your bottom dollar that it is happening in other Councils and quangos. Sadly I can't spend any more time trying to find out the truth, so I post this in the hope that someone out there can shed more light on it and dig a bit further than I have been able to.

NOTE TO CAMDEN COUNCIL PRESS OFFICE: Are you always this useless?

UPDATE: 5.35pm At last Camden Press Office has got back to me. They are looking into it and will ring me back.



17 comments:

Anonymous said...

I believe at Southend Council all the senior managers and Directors are having to reapply for their jobs! These are the managers who earn bucketfuls of cash - now I know why!

David Boothroyd said...

Would that be "Lib Dem/Tory coalition controlled Camden council" or some other bunch of shysters?

Ed said...

Forgive my ignorance, but why would Camden, which is (I think?) a Lib-Con coalition be going so far to fiddle the government's targets? Wouldn't it be in their interest to trumpet this directive, if one exists, from the rooftops? What am I missing?

Bob Piper said...

Well, isn't it a Lib Dem Tory administration? Don't expect efficiencies then, they'll be rarer than policies.

Iain Dale said...

Ed, I think this predates the May elections, but I hope Camden will be able to shed some light on it when they eventuall get back to me.

William Norton said...

Can't confirm your informant's story but it wouldn't surprise me. There's a number of "issues" with Gershon, which will be explained to an unsuspecting world if I ever get round to writing it.

(1) Gershon didn't cover all public expenditure, only the part of it called DEL (about 60% of total) which is the part linked to Gordon's three year spending reviews. On top of that, the Gershon Review didn't really exist, it just collected pre-existing anti-waste measures into one place. They found savings of only 5% of total expenditure, which is about what you'd expect of any half-decent annual budget process.

(2) On jobs, the figures Gordon is fond of shouting about (84,000) are spoof. This is a gross reduction in central govmt posts, and it is the gross figure which has been converted into targets for each dept. The net figure is about 70,000, but even then that is only central government posts, not actual jobs. Your contact could well be right: abolish x old posts and meet the target, rehire them as self-employed consultants or move their employment into an arm's length service entity ("Camden Local Govmt Services plc"?) and it would count as abolishing x council posts. I'd expect Labour will redesignate a lot of civil servants as being non-civil service quango employees; that would meet the target, too.

(3) The biggest problem with the Gershon figures is that they are "non-cashable productivity savings" - i.e. they don't actually exist. They undertook a form of time and motion study, concluded that with different procedures they could deliver more output and hey presto announced the difference as a saving. You'll never actually see any cash back from it, and probably won't actually cut expenditure - but on the cock-eyed method they have for counting output they'll announce a massive improvement in service.

(4) Structurally, Gershon was given the wrong remit - it works on setting efficiency totals for whole departments and then sharing out the targets. It ought to start from bottom-up and work out what the service really needs to be like and build the depts around that. Top-down analyses are always difficult to deliver.

Gershon isn't even clever accountancy, but it does achieve the rare feat of simultaneously under-estimating the level of waste and over-stating its ability to deliver savings. Brilliant.

Graham E said...

I bet david boothroyd,ed and bob piper are really glad they jumped in with both feet. Lets see if they have the conviction to stand by their comments when it's confirmed that these measures pre-date the May elections.

ed said...

graham - I wasn't 'jumping in with both feet', I was seeking an answer to something that wasn't made totally clear in the article, and which Iain kindly gave me. My post did not contain any convictions on which to stand, simply a question.

Bob Piper said...

graham e... What... you mean Iain has been trying to get through to the useless Press Office since MAY! They are worse than I thought!

No2CanveyLink said...

Iain - use the Freedom of Information Act - there must be records somewhere of the reasons for this decision - it would have gone before a Cabinet meeting for rubber stamping.

Bishop Hill said...

Someone from the Home Office was on the BBC this afternoon saying that there had been 19,000 new prison places created since 1997. This is presumably basically the same trick - count only places created in new prisons but ignore those lost when the old gaols were shut.

You can't believe a word they say.

Anonymous said...

All the head office wonks at the Post Office had to reapply for their jobs last month. Some did go but most remain - and believe me there is a lot of them!

FishFork said...

I'm not sure your contact's situation is entirely true of all authorities. I work for a large East Midlands CC and Gershon is hitting hard with several hundred jobs going - no instant re-hire either.

With that said, Gershon IS about efficiency rather than head-count. We're going through a recentralisation of IT resources and despite obvious areas of duplication and waste, very few jobs will actually go, despite many of us having to re-apply (sometimes competitivly) for our own jobs. Those of us who do not secure our 'own' job will be subject to pay-protection for at least two years. So much for the 3 year plan, this has already taken over a year to organise and many, many thousands of pounds in consultancy fees.

William Norton's comment about the inherent flaws in Gershon was enlightening and penny-droppingly insightful. I am grateful and plan to bombard my superiors with the facts!

FF

Taxidermist said...

Not to do with councils but talking to my accounts office today I foubnd the manager extremely downbeat because he'd lost 5 staff because of Gershon cuts. From his depressed demeanour they were real cuts too. I don't think the fact that another HMRC had sent out reminders 2 weeks AFTER a deadline helped his mood as his number was on the reminder!

Vienna Woods said...

Ah yes, clever accounting! Going back to the early 70's there was the usual round of Local Authority cutbacks when the county authority for Wiltshire were told to reduce costs. Police vehicles at that time were serviced at small workshops located at Divisional HQ's in Swindon, Salisbury and Chippenham, which employed 2 mechanics at each to undertake small repairs and oil changes etc. The main workshop employing about 12 mechanics was located in Devizes. Enter stage left the accountants who closed the three divisional workshops. They saved money on salaries and depreciation etc., but still needed to service the vehicles. So it was decided that two vehicles should be serviced from each division per day.. but how to do it! What they did was that each night two policemen from each division (who would otherwise be patrolling the streets) were ferrying cars to the central workshop in Devizes and bringing serviced cars back to division. Bearing in mind that the distance from Devizes to Swindon, Salisbury, or Chippenham was a minimum of 40 miles return, one can estimate that this option was not economic at all. On paper however, the petrol was allocated to police duties and the police time wasted was never accounted for... so it was a cost saving...my arse!

David Webster said...

redesignating jobs and dressing people up as non-council workers - sounds like the yes minister episode when Humphrey is trying not to cut the amount of civil servants, but appear like he is!

Adrian Yalland said...

Iain.

Yes he is! Ever seen Yes Minister???