Government marketing freeze saves £6.5m – but costs 287 jobs

COI, the government’s marketing and communications arm, announced this morning that all 737 of its employees had received letters warning them that their jobs are ‘at risk’.

With marketing and advertising spend down 52% in the first month of the freeze, the COI says it needs to restructure “to reflect the reduced volume of work”.

It is looking to cut head count by 40%, bringing employee numbers down to 450. Voluntary redundancy is being offered at first, but compulsory redundancies will follow if the voluntary scheme does not produce the necessary numbers.

A 90-day consultation period begins today, during which time COI leadership will be considering the structure of the business going forward and what capabilities are needed to meet the priorities of the coalition government.

With this work still to do, a spokesman was unable to say exactly how the COI’s research team would be affected by the cuts.

It’s possible the COI will look to maintain a sizeable research team and budget given government interest in behavioural theory, which requires negative behaviour to be identified and change influencers pinned down – and a substantial amount of post-campaign research to measure whether communications activity has had the desired impact.

Research spend by the COI fell 7% to £27.4m in the last financial year.

CEO Mark Lund said: “COI has always adapted to meet the requirements of government and the changing media landscape. A leaner COI is in line with new government priorities. Our future will be grounded in continuing to deliver excellent communications to achieve government aims, in the most cost efficient and effective way possible.”

The Conservative-Liberal Democrat coalition government has set a target to reduce annual government spending by £83bn by 2014-15, some of which will come from cuts in advertising and marketing campaigns.

Cabinet Office minister Francis Maude, who is overseeing the marketing spend freeze, said: “I know that tough decisions like this one have difficult consequences and the COI’s restructuring announcement today is evidence of that. But it is incredibly important that we keep pushing to make government as efficient as possible. As we go forward, we will continue to look for more cost effective ways of delivering key government communications in the future.”