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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The writer is a non-executive director at the UK Department of Health and Social Care
It’s not a chainsaw. Even as Sir Keir Starmer was promising to reshape the state this week, his science secretary was promising to hire 2,000 data specialists. The government will be taking a more genteel approach to UK public service reform than either the Argentine President Javier Milei or Donald Trump’s consigliere, Elon Musk.
That’s good. In Washington, moving fast and breaking things has exposed some egregious examples of federal waste. But it has also forced out swaths of talented people from systems that will eventually have to be repaired. For the late Ronald Reagan, the nine most terrifying words in the English language were “I’m from the government and I’m here to help”. In today’s America, they might be: “Don’t call the government for help: no one’s there.”
The prime minister and Pat McFadden, his Cabinet Office enforcer, envisage taking more of a scalpel to what Starmer has called the “flabby” and “unfocused” state. They want to make the civil service more responsive, remove some quangos and reduce the costs of compliance for business. But they shouldn’t underestimate the battle ahead.
Starmer’s words echoed those of his predecessor Tony Blair in 2004, former Tory ministers Francis Maude in 2010 and Michael Gove in 2020. All three, in turn, were channelling the Fulton report of 1968, which criticised the dominance of generalists, the churn of officials from post to post and an excessively closed culture. None of these have changed.
The current system suits no one. The past two decades have seen a brain drain of talent from Whitehall. Brilliant, talented officials leave in frustration at their inability to get things done. They all say the same thing: that the civil service should be much smaller but better paid; that it should focus more on delivery than process; that performance management is abysmal; and that opportunities are being missed to improve procurement, use data and help investors. Yes, some ministers are awful, and the post-Brexit chaos hasn’t helped. But the fundamental issue is that the system has become bigger than the people within it.
Duplication and inertia have grown, while staff numbers have hit record highs. Maude, in his 2023 review, described the absurd situation in which the central body set up to maximise government purchasing power is involved in less than half of the £42bn spent on common goods and services. It now has a sales force of 60 people, trying to persuade government entities to use it.
Things are not helped by the tendency to outsource, described by Starmer as “a knee-jerk response to difficult questions . . . [You] create an agency, start a consultation . . . have a review . . . Almost by stealth, democratic accountability is swept under the regulatory carpet.” The decision to abolish NHS England will return functions to the Department of Health and Social Care that were hived off from it in 2012, in a botched attempt to depoliticise the health service.
One big problem is that when it comes to the day-to-day functioning of Whitehall, no one has the authority to drive through reform. As Lord David Sainsbury, founder of the Institute for Government (IfG), has said: “the reason the activities of government often appear not to be joined up is that it is not the job of anyone to join it up”. A permanent, politically impartial civil service that can challenge ministers is hugely valuable. But the unspoken belief that only the mandarin caste has the national interest at heart has become a way to avoid reform. Canada, Australia and New Zealand demonstrate that it is perfectly possible to maintain independence while giving ministers more say in appointments.
Part of the answer, recommended by most experts and by the IfG,
is to recruit, externally, a head of the civil service to oversee reform, overhaul appraisals and manage talent. While this might sound straightforward, successive cabinet secretaries — including the late Sir Jeremy Heywood — have fought attempts to separate their role from this personnel function. No cabinet secretary has the time or desire actually to manage the civil service. But they don’t want a rival either. The IfG also recommends regular compulsive redundancy rounds, to move on poor performers while retaining talent.
Starmer claims that Labour can achieve what the Tories didn’t, partly because he wants “active government” not “a weak state”. It’s possible that a Labour government may find unions more willing to co-operate. But it remains to be seen what the prime minister really means when he talks about the state being “overstretched” and doing too much. He has abolished one quango, but has plans to create more than 20 others. At the same time, many of the actual proposals going through parliament seek to expand the state’s reach, not limit it.
This government continues to be a push-me-pull-you: talking eloquently about simplification and business, while legislating for more complexity. The renters’ rights bill, as drafted, will load so many complications on to landlords that those who don’t sell up in despair will probably have to pay a managing agent just to be compliant. The employment rights bill will turn Britain’s hiring downturn into a freeze, by making it even harder to remove poor performers.
Maybe Starmer hasn’t had a chance to read the legislation that proposes yet more of the kind of suffocating regulation he claims to hate. But there’s still time.
