Gabriel Milland

The cuts start to bite

The cuts start to bite
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It must have been the toughest press release that anyone in the Central Office of Infomation has ever had to draft. A freeze on new campaigns and the abandonment of any regarded as “non-essential” mean staff numbers will drop by 40 percent – a loss of 287 jobs. Compulsory redundancies loom. The same press notice also revealed that the COI’s advertising spend was down by a 52% last month compared to June last year.

We are not talking about small sums here. Last year’s COI marketing  spend of an eye-watering £531 million – half of it going on advertising – was about 20 percent more than the next biggest spender, Procter & Gamble.

The huge reduction in the COI budget is the first real dividend from the Cabinet’s new Efficiency and Reform Group, chaired by Danny Alexander and Francis Maude and the cuts package announced by the coalition at the end of May.

But the COI’s turnover roughly quintupled from just £111 million in 1997. So a projected cut of £160 million in COI spending this year will still see the amount of cash it spends on its campaigns vastly outstrip historic levels. Even at the height of the downturn, the COI kept growing – adding 50 staff last year alone.

Given the previous Government’s obsession with spin, it is not surprising that spending on what can roughly be termed “communications” mushroomed over the last decade.

Communities Secretary Eric Pickles has made encouraging noises about stopping the scandal of council tax-funded free-sheets competing with traditional local papers. Council spin chiefs with salaries well above those of local newspaper editors should be another prime target.

And estimates put the total number of press office staff across Whitehall departments and associated quangos at over 3,200, costing £220 million a year.

But it is an exceedingly brave government that actually delivers a big reduction in spin spending just as it is about to embark on the most controversial set of measures in a generation. It is also exceedingly brave to risk annoying powerful media groups by removing roughly £100 million from what is still a very weak advertising market.

Gabriel Milland is Head of Press at Policy Exchange.