Wednesday, March 22, 2006

Gershon Update

As already blogged, Gordo's latest Gershon tractor production statistics announced in the Budget were greeted with derision (for background see here, here and here).

He now reckons he's saved £6.4bn and cut 33,237 jobs (both to end-Dec). So supposedly he's about halfway to his 70,000 cut to staff numbers, but less than one-third the way to his £21.5bn cash savings target (both to 2007/08).

As usual, he's released very little detail on the calculations behind these figures. The recent NAO report told us the £2bn saving quoted in last year's Budget was simply made up, and it's quite likely the same applies this time. But just on the offchance the numbers might be real, we can note the following:

  • Job cuts at the Department for Work and Pensions are slowing right down. Their target is the biggest at 30,000, yet between September and December they only managed a further 483 to reach 14,698. John Hutton's face was a picture of grim resignation during Gordo's speech- he's wrestling with a massive dysfunctional department that now not only has to deliver a 25% staff cut under Gershon, but also is one of the four departments slated for a further 5% real cut after 2008. Completely undeliverable of course, and Hutton must be praying for Gordo to move next-door so he can be moved himself.
  • Job cuts at HM Revenue and Customs are also slowing drastically. In the final quarter of 2005, they managed only 425 extra to reach 3,671- way short of their 13,350 target. They too are doomed to deliver that additional 5% real cut post-2008. And they too are gently disintegrating, with loads of taxes already going uncollected. It's quite possible that the Gershon "savings" will be more than offset by a breakdown of tax collection.
  • 8,560 jobs have reportedly been cut at MOD. But as we know from the NAO report, at least 2,300 of these were not Civil Service jobs at all- they were just included to boost the numbers.

Overall, the Gershon "savings" remain on track to be the best Marx Brothers film never made.

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