Highly controversial plans to revolutionise Whitehall by introducing performance-related pay, an accelerated exit process for under-performing mandarins and more digitalisation will be announced this week in what ministers say is a programme to “reshape the state” so it can respond to a new “era of insecurity”.
The proposed changes, to be announced by Cabinet Office minister Pat McFadden, will inevitably provoke alarm and resistance from civil service unions, and be seen as the government using the current wave of global uncertainty as cover to drive through radical modernisation of civil service methods and culture.
They will also be seen as following Donald Trump’s decision to set up a Department of Government Efficiency (Doge) run by the billionaire X owner Elon Musk to reduce spending and increase performance.
McFadden will say that the public does not believe that the British state, as currently configured, is able to fully and efficiently respond to modern challenges and the new need for beefed-up national security. As a result he will say that civil servants’ performance and pay will be judged on the extent to which they deliver on key priorities such as national security and key government missions.
While Whitehall departments have substantially grown in recent years – increasing by more than 15,000 since the end of 2023 – McFadden is expected to say working people have not seen improvements in their job opportunities, the safety of their neighbourhoods or the length of time they have to wait for NHS treatment when they are sick.
Indicating the scale of potential reform being considered, sources stressed that “delivering national security” could only be done with a full “renewal of the state”.
Most controversially, McFadden will set out a new “pay-by-results system learning from the best civil services globally, making sure the most senior officials responsible for the missions have their wages linked to the outcomes they achieve”, a government spokesperson said.
McFadden will also outline plans to speed up the removal from the service of civil servants judged as unable to meet current needs. A system of “mutually agreed exits” will be introduced to bring the civil service “more in line with the private sector”.
“Civil servants who do not have the skills or can’t perform at the level required to deliver the government’s plans will be incentivised to leave their jobs, as an alternative to lengthy formal processes,” the spokesperson said, adding that the plans would also allow ministers to “quickly weed out underperformance among the highest paid civil servants – the senior civil service … those who do not meet the standards required will immediately be put on a personal development plan, with a view to dismiss them if they do not improve in six months”.
Echoing the language of Trump, McFadden said the government is willing to “disrupt the status quo as part of its pursuit of an active and productive modern state.
“The state is not match fit to rise to the moment our country faces,” he added. “It is a too common feeling in working people’s lives that the system doesn’t work for them. With our mandate for change, this government will fundamentally reshape how the state delivers for people.
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“Our plan for the civil service is one where every official is high performing and focused on delivery. To do this we must ensure we go further to ensure those brilliant people who can deliver are incentivised and rewarded, and those who can’t are able to move on.”
Late last year Dave Penman, the head of the senior civil servants’ union (the FDA), wrote to Keir Starmer urging him to rethink his “frankly insulting” criticism of Whitehall for being comfortable with falling standards. Penman suggested Starmer had invoked “Trumpian” language by saying that “too many people in Whitehall are comfortable in the tepid bath of managed decline”.
Responding to the government’s latest announcement on the reshaping and renewal of the state, Penman said: “If the government is serious about transforming public services they must set out what the substance of reform looks like, not just the retreading of failed ideas and narratives. In the absence of big ideas, we have seen previous governments peddle the narrative that public services are being held back by a handful of poor performers in the senior civil service.”
