End to Civil Service expansion and review of equality and diversity spending announced in productivity drive

The Chancellor has today, 2 October 2023, announced an immediate cap on civil servant headcount across Whitehall to stop any further expansion, increase efficiencies and boost productivity

  • Chancellor announces Civil Service Numbers Cap, capping headcount at current level, which could save up to £1 billion, with focus on a leaner and more effective workforce
  • government departments to submit long-term productivity plans that modernise the Civil Service and reduce the size of the state – delivering high-quality public services at a lower cost
  • equality, diversity and inclusion (EDI) spending in the Civil Service to be reviewed to ensure it represents value for money for the taxpayer

The Civil Service workforce has grown year on year since 2016, with headcount as of June 2023 around 488,000. While this has enabled an effective response to the challenges of the Covid-19 pandemic, further unabated growth would not be fair to taxpayers or promote the efficiency they expect.

A cap on headcount at its current level will be introduced with immediate effect – a decision that will help cut the cost of government and could save up to £1 billion by March 2025 compared to the current trajectory.   

The cap - which will be in place for the duration of the current Spending Review period - does not equate to a recruitment freeze, and current recruitment campaigns will remain ongoing.

To go further after the current Spending Review period, government departments will be asked to produce plans on driving down headcount over the long-term to pre-pandemic levels, as part of the Public Sector Productivity Programme being carried out by the Chief Secretary to the Treasury.

A first-time value for money audit of EDI spending in the Civil Service will also separately inform the productivity review, with the findings and actions to be announced by the Chancellor in the Autumn.

Through tackling unnecessary bureaucracy and improved use of technology, it is expected that the Civil Service will become more productive and act as a lean, agile, and cost-effective organisation, in line with the people’s priorities.

Departmental plans are expected to include detail on how departments will utilise modern technology to drive efficiencies and deliver better services for the public at lower costs – across both the Civil Service and the wider public sector. This process will also prioritise the protection of critical frontline services.  

Further information

  • Estimated savings are based on the latest available headcount for full-time employee numbers (457,000 as of June 2023) from the ONS (excluding devolved administrations), as well as a projection of 490,000 in March 2025 based on the current trend in headcount growth since 2016.
  • The figure is based on a median wage of £32k reported in the latest Civil Service Statistics and additional non-wage costs of £13k per FTE. The figure is subject to change based on departmental negotiations and a later retrospective update to headcount data.
  • The cap will apply to all government departments and their arm’s length bodies. Public servants and crown servants will also be included where they are normally in scope of the Civil Service Pay Remit.
  • The Civil Service Fast Stream will continue as planned in recognition of the importance of the talent pipeline.
  • The Cabinet Office has written to over 100 organisations in the Civil Service, including government departments and executive agencies, to confirm how many staff work on EDI and how that work supports government priorities.
  • The Chancellor, Minister for the Cabinet Office and Minister for Women and Equalities will jointly scrutinise whether EDI spending offers taxpayers value for money.

HM Treasury