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The UK government has announced reforms to make it easier to force out underachieving civil servants along with stronger performance-related pay for senior officials as part of plans to shake up Whitehall.
Pat McFadden, the Cabinet Office minister, said that Whitehall was “not match fit” and vowed that ministers would “fundamentally reshape how the state delivers for people”.
The highest-paid mandarins at the top of the civil service will face stricter performance monitoring, with those deemed to be falling short given six months to improve or face dismissal under the plans.
McFadden is also overseeing the creation of “mutually agreed exits” in departments, a process to incentivise underperforming officials to leave their jobs that Labour hopes will make it easier to push officials out.
The reforms will come with a new performance-related pay system to reward outstanding officials who are responsible for delivering the government’s five missions.
McFadden is driving the overhaul of civil service employment rules at a time when the US federal bureaucracy has come under attack by Donald Trump’s administration, particularly through his so-called Department of Government Efficiency spearheaded by Elon Musk.
Labour’s “radical” reforms were “about getting bang for our buck in terms of the outcomes for the public,” McFadden told the BBC’s Sunday with Laura Kuenssberg, adding: “It isn’t an ideological approach to stripping back the state.”
He also signalled there would be a significant reduction in headcount across Whitehall, as the Cabinet Office said that 15,000 extra staff had joined the civil service since the end of 2023 without driving concurrent improvements in public services.
McFadden has not set a concrete target for the number of job cuts, but the Financial Times first revealed in December that the government was eyeing up cuts of more than 10,000 jobs across the civil service.
“I think the central civil service would and can become smaller,” McFadden told the BBC. “I want to see more civil servants working outside London, where I think the state can get better value for money.”
McFadden is also introducing a new target for one in 10 civil servants to work in data or digital roles by 2030, bringing the public sector in line with private sector benchmarks.
The shift will be delivered through apprenticeships and retraining of existing civil servants, according to the Cabinet Office.
McFadden’s comments came ahead of a speech on Thursday by Prime Minister Sir Keir Starmer about efficiency in the public sector. Starmer has called for an overhaul of the state in order to deliver his five missions, which are economic growth, improving the NHS, tackling crime, removing “barriers to opportunity” and turbocharging the green energy transition.
Trade unions representing civil servants reacted angrily to the package of reforms. Dave Penman, general secretary of the FDA union that represents senior officials, said Labour was repeating previous Conservative governments’ narrative that “public services are being held back by a handful of poor performers in the senior civil service”.
He said the government should address “uncompetitive pay rates that see senior civil servants earn salaries half that of their private sector equivalents” instead of seeking to “tinker around the edges of a performance pay system that’s been around for over two decades”.
Ministers must set out “realistic priorities” for government, rather than issue soundbites about “delivering more for less”, Penman said.
