Keir Starmer has pledged to use AI and automation to cut "flab" from the civil service and to reduce the reach of arm’s-length bodies.
Starmer's strongly worded speech in Hull this morning – which included the shock announcement that NHS England is to be abolished – was expected to put meat on the bones of an announcement this weekend promising "radical" reform of the civil service.
Cabinet Office minister Pat McFadden said the changes would include performance-related pay for senior civil servants and a "mutually agreed exits" programme to make it easier to get rid of underperforming staff – neither of which the prime minister mentioned this morning. He also said ministers would introduce a target for one in 10 civil servants to be in digital roles by 2030.
Instead, the prime minister focused on his drive to reduce regulation and plans to digitise and automate more services to cut civil service costs.
In a speech that focused heavily on the war in Ukraine and the role of the state in ensuring national security, Starmer said the public wants to see “active government” not a “weak state”.
He said the state cannot be a strong one "if you lose control of your public finances".
"If we push forward with digital reform of government, and we are going to do that, we can make massive savings, £45bn in efficiency. And AI is a golden opportunity for efficiency," he said.
He also pledged to "send teams into every government department with a clear mission from me to make the state more innovative and more efficient".
While his speech was light on the specifics of reform, Starmer did highlight how the civil service has grown in recent years.
“The state employs more people than we’ve employed for decades, yet look around the country. Do you see good value? Because I don’t. I actually think it’s weaker: overstretched, unfocused, trying to do too much, doing it badly, unable to deliver the security that people need,” he said.
"We don't want a bigger state, a more intrusive state, an over-expanding state, a state that demands more and more of people as it itself fails to deliver on core purposes, so we've got to change things."
Ahead of the speech this morning, technology secretary Peter Kyle said it was “almost certain that the [civil service] headcount will go down” as more public services are digitised and automated.
However, he said ministers will not set an “artificial… arbitrary, overall figure” – showing this administration has no plans to emulate the Johnson-era plans to cut 91,000 civil service jobs.
Instead, he highlighted examples of inefficiencies – saying DVLA officials open 45,000 envelopes every single day, while HM Revenue and Customs staff answer 100,000 phone calls a day.
“This is not the way we should be doing government. This is not the way we should be running a country in the 2020s,” he said.
Speaking to The Times, Kyle said that while the public sector will not be able to pay the “megabucks” of the private sector, it will aim to entice specialists with higher pay to help meet Starmer's aim to get the “best of the best on AI working in government”.
Last year, CSW reported that government's specialised pay scale for critical technology roles was being recalculated to ensure departmental recruitment teams can keep up with “market trends”.
Kyle said new pay scales will focus on software developers and machine-learning engineers to build AI programmes.
“We can offer bucks. And the balance of working in the private sector and public sector has always been uneven when it comes to remuneration, but when you get the public sector right – with a clear vision, with good leadership and resources, that show respect for their experience and talents, then you can have a magnetism that attracts great talent from all sectors into the public sector," he said.
Starmer also took aim at arm’s-length bodies in his speech, building on comments he made to cabinet earlier in the week, when he told ministers to stop "outsourcing" decisions to quangos.
Alongside the unexpected announcement that NHS England will be scrapped in a bid to cut bureaucracy and bring management of the health service "back into democratic control", Starmer said he wanted to ensure “every pound spent, every regulation, every decision must deliver for working people”.
“Over a number of years politicians have decided to hide behind vast arrays of quangos, arm’s-length bodies, regulators reviews, you name it. A sort of cottage industry of checkers and blockers, using taxpayer money to stop the government dealing on taxpayer priorities.”
He took aim at the proliferation of regulators in particular, saying government has “created a watchdog state completely out of whack with the priorities of the British people”.
He said he has set a target to cut the cost to businesses of compliance with regulations by 25%.
Starmer 'not questioning civil servants' dedication'
In a clear change of tone since his controversial Plan for Change speech last year in which he said “too many people in Whitehall are comfortable in the tepid bath of managed decline”, Starmer said his reforms are “not about questioning the effort or the dedication of civil servants”.
“It is about the system we have got in place and that system was created by politicians. The buck stops with us,” he said.
Unions were outraged at the “tepid bath” comments, with FDA general secretary Dave Penman saying civil service leaders felt a "sense of betrayal".
And this week, unions have pushed back against Pat McFadden’s comments trailing the reforms – with Penman saying Starmer was “denigrating civil servants” by vowing to cut the state’s “flab” and Prospect chief Mike Clancy calling for an end to “the tradition of treating the civil service as a political punchbag”.
Responding to this morning''s speech, Clancy said Starmer is "right that the civil service is full of talented people who want to serve their country, and that reform is needed to make the best use of their skills".
“An essential part of this reform needs to be ensuring that the pay framework enables the civil service to recruit and retain ‘the brightest and the best’ in areas like science and digital, and it is good to see that the government accepts this problem," he said.
“But the government must recognise that there is a fine line between cutting back bureaucracy and undermining the essential functions of the state. Civil servants in agencies such as HSE and the Environment Agency are at the frontline of delivering on the government’s missions – writing them off as ‘blockers’ is a profound mistake. Prospect will be making the case that good regulation is the foundation of economic success, not a barrier to it.”