Mike Kerr, head of public sector at Deloitte, said Brown’s approach in the spending review was right, but warned it would fail unless Whitehall gained the support of middle-ranking civil servants.
‘We think it is a good plan, but making this spending review work will require a much tougher management approach. While the plans have the support of ministers, the challenge will be to win over those responsible for implementing the strategy,’ said Kerr.
Workers at Customs and the Inland Revenue suffered another blow this week when the chancellor announced a further 2,000 jobs would go from the tax collectors as part of his spending review.
The total number of jobs to be culled from the two departments now stands at 16,000 – a large slice of the 104,000 civil service posts Gordon Brown hopes to cut.
The exact number of jobs to go will be 16,850. Of these, 3,500 will be moved to front-line activities.The chancellor intends to save £21.5bn in total from the job cuts. He is also hoping that the sale of departmental land and property will add to the savings.
Paymaster general Dawn Primarolo caused a stir just days before the spending review by laying into tax advisers, after the Treasury was forced to rush a series of last-minute, anti-avoidance measures into the finance bill.
Primarolo spoke at length of her ‘frustration’ over ‘the creativity of some accountants, tax planners, and legal professionals’ who devised ways round the anti-avoidance provisions before it had even become law.
She protested: ‘If they are not held in check, they are capable of ensuring that the Treasury loses vast amounts of revenue. That is the bind we are in: the government consults and publishes a bill, and while it is making progress through the various stages, other people are planning how to negate it.’
One of the clauses will bolster a clampdown on ‘aggressive new avoidance schemes’ using sale and leaseback finance. Another measure places a bar on manipulating gifts of shares to charities to gain tax relief for the donor.
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