Senior civil servants must find cuts in their Whitehall budgets or risk losing their jobs under new rules, ministers will announce on Thursday.
Pat McFadden, the Cabinet Office minister, will unveil a set of performance standards intended to ensure value for money in Whitehall.
Under the new policy, senior civil servants will have to demonstrate they have made budget cuts, met collective performance standards and managed their staff effectively. The Cabinet Office will introduce government-wide checks at the end of each year.
The measures are intended to reward good performance in Whitehall and identify areas for improvement. Those who fail will be put on a performance development plan and potentially face being made redundant.
Rachel Reeves, the chancellor, has ordered government departments to make 5% efficiency cuts to their budgets as part of the spending review process, which determines how much money different parts of government get over the coming years.
There are concerns Reeves will have to either raise taxes again or cut spending when the Office of Budgetary Responsibility delivers its verdict on the state of the economy next month.
“Taxpayer money is at the heart of all decisions made in government, and the public must be confident we are spending every pound of their money well,” McFadden said. “It is vital that senior leaders are not just encouraged, but held responsible for this.”
“We need them to build productive and high-performing teams, to deliver on our plan to put more money in people’s pockets, get the NHS back on its feet and rebuild Britain.
“We will introduce new checks to identify and tackle poor performance where we find it, and to recognise the good work of senior leaders across the civil service.”
McFadden added that the Labour government needed “to reform the state to make it more agile and modern” and ultimately “make the civil service a world leader, equipped with the tools to tackle some of the biggest challenges we face today.”
The Guardian reported last year that ministers were planning to cut more than 10,000 civil service jobs under a new government efficiency drive. There is an acceptance internally that the civil service has become too big and unwieldy after expanding during Brexit and the Covid pandemic.
In a speech in December, McFadden said ministers wanted to rewire the state to function “more like a startup”. He announced plans to simplify Whitehall’s recruitment process for external candidates and to offer tech workers year-long secondments in Whitehall to tackle some of the public sector’s biggest challenges.
