The watchdog says government departments have made significant reductions in their staff numbers and salary bill since 2010, achieving nearly £2.5bn of staff savings.

Analysis shows this has been achieved mainly by keeping a tight rein on recruitment, which the NAO says is  a cheaper option in the short term thanmaking staff redundant, effectively paying them to leave, but has resulted in older staff making up a greater proportion of the workforce.

The report warns that this changing of the age profile in the civil service might increase the risk of a shortage of talent and skills in future.

The percentage of the civil service workforce aged 20-29 reduced from 14% to 9% from 2010 to 2014, while the percentage of 50-59 year-olds increased from 26% to 31%. The NAO says ‘there is not yet a clear understanding of the potential consequences or the necessary management actions’.

In its report, the NAO examined four departments as case studies including HMRC, which it said had reduced its workforce by 20% since 2010, along with the MoD, DfT and DfID.

 It found that in general they had not yet fully implemented strategic workforce plans across their groups.  They also lacked comprehensive information on workforce skills and some had not completed detailed plans for the period after 2015, which it said increased the risk of not being well-informed when they go into the next spending review.

The NAO report said HMRC has set out its vision of how it will deliver its services, including setting out its ambition of being a smaller organisation in fewer locations. It has also modelled the workforce impacts of natural wastage and identified staffing options for the consolidation of its estate, but has not yet completed the quantitative analysis for longer-term planning of the skills it will require.

The NAO said these departments, and others, need to prioritise the developing and strengthening of their long-term operating models and strategic workforce plans, and ensure they recruit or develop the critical skills needed.

Amyas Morse, NAO head, said: ‘Departments have significantly cut their staff numbers and costs in the last five years but not enough planning has gone into making sure that, over the longer term, the reductions already made and any required in future are sustainable and do not damage the delivery of public services.

'The centre of government must do more to help departments meet these challenges, including managing the heightened risk of a shortage of vital skills.’

The NAO Central Government Staff Costs [including HMRC] report, issued June 2015, is available here