Two in three public sector managers say their teams are operating at full capacity with little or no room for efficiency savings, according to an Institute of Leadership & Management (ILM) survey.

It comes as Office for National Statistics data out yesterday revealed spiralling UK debt of £848.5bn, equivalent to 59.9% of gross domestic product.

The ILM survey of 1,554 managers shows that two in three managers have already experienced budget cuts in the past year, while 89% predict further major cuts in the next 12-18 months in the form of headcount reduction (49%), streamlining processes (49%) and reduced training and development budgets (48%).
 
The anticipated impact of these cuts will be higher workloads (73%), lower morale (69%), increased stress (67%) and reduced quality of service for customers (52%), the survey says.

Penny de Valk, ILM chief executive, says: “The research dispels many of the myths about the public sector and its managers, including the belief that it has remained untouched by the economic downturn. The fallout from the recession has already affected budgets and resourcing levels and will continue to do so, potentially at the expense of crucial public services and staff wellbeing.”

But David Kern, chief economist at the British Chambers of Commerce, says cuts are inevitable: “As well as explicitly spelling out its medium-term spending plans, it is now necessary for the government to announce a freeze in the public sector wage bill, and an immediate review into the cost of public sector pensions.  This would persuade the markets, and the rating agencies, that the government is serious about cutting the unsustainable deficit, and enabling the private sector to drive Britain’s recovery.”