Government departments ‘do not know how many underperforming staff they have’

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Almost one in five Government departments do not know how many underperforming workers they have – and most are unable to say how much it costs to hire new staff, the public spending watchdog has found.

Some 11 out of 16 also failed to identify how long it takes for new recruits to pass security vetting, according to a report by the National Audit Office (NAO).

It comes against a backdrop of promised cuts to the civil service and increased workload pressures in Whitehall posed by the aftermath of the Covid-19 pandemic, Brexit and the cost-of-living crisis, the watchdog said.

Head of the NAO Gareth Davies said that the Cabinet Office and departments “need to work together more effectively to drive efficiency” to help the civil service meet the challenges it faces.

The report, published on Wednesday, looked at how departments recruit, pay and manage the performance of staff below senior level.

There are “substantial challenges” to attracting and retaining workers amid “declining morale” among civil servants and more frequent industrial action, the NAO said.

Civil service salary costs stood at £16.6 billion in 2022 – up from £11.4 billion in 2013 – but across almost all grades, median salaries have fallen over time, the NAO said.

Staff costs are an area of key concern, the report said, often representing the largest part of overall departmental spending at a time when efficiency savings are being pushed for.

Out of 16 main departments, three could not say how many underperforming staff they had and almost two-thirds of departments do not know what happens to workers after they are classed as such, the report said.

The NAO recommended the Cabinet Office should work with departments to help them gauge how well their own performance management systems work, including line manager to employee relations and approach to performance-related pay.

Some 14 out of 16 departments were unable to provide full recruitment data, meaning most departments do not know how much it costs them to recruit staff, the report found.

The Ministry of Defence could not give any recruitment costs at all, the NAO said.

The time it takes for security vetting of new recruits to be completed was cited as a major blocker to getting employees into post quickly, but 11 out of 16 departments could not provide accurate data on the process, the report found.

Out of the five who supplied comparable figures, the average time taken for developed vetting – the most advanced kind of vetting – to be completed was 171 days.

Mr Davies said: “Some variation in how departments organise and manage their workforces is to be expected given the different functions and services they deliver. However, our analysis indicates that there is scope to improve efficiencies in crucial areas such as recruitment costs and managing underperformance.

“The Cabinet Office has a fundamental role to play in requiring departments to collect consistent HR data and helping them understand where and how efficiency could be improved. It also has a responsibility to minimise unintended effects such as departments competing against each other for staff.

“The Cabinet Office and departments need to work together more effectively to drive efficiency and help the civil service meet the challenges and pressures it faces.”

Chairwoman of Parliament’s Public Accounts Committee, Dame Meg Hillier, said: “Today’s NAO report says that some departments do not know how much it costs them to recruit staff or how many employees are underperforming.

“It also identifies differences in pay, recruitment and performance management across departments.

“Departments need to better understand how they recruit, manage and motivate people.

“Some variation is expected but can also mean departments’ HR processes are less efficient than they should be. The Cabinet Office must also support departments to share learning and increase efficiency across Government.”

A Government spokesperson said: “We are focused on driving productivity and efficiency in the civil service, and are supporting it to be a leaner and more effective workforce.

“We are capping headcount at its current level, which could save up to £1 billion, and government departments will submit long-term productivity plans that will help to modernise the civil service – delivering high-quality public services at a lower cost.

“We have implemented a central recruitment service for the civil service – cutting spend and time, including through using automation which is 70% faster. Between August and October 2023, the average time taken to hire decreased by around 12%, and is on track to meet service targets by December 2023.”