Whitehall's management should become less hierarchical and more focused on encouraging individual initiative, the Reform think tank has said, as it published a new report predicting that more than 130,000 administrative-level civil service jobs could be automated over the next decade.
"Work in Progress", published on Monday by the right-leaning think tank, says that while the public sector workforce is now 20% smaller than at its 1979 peak, managers still lack the "freedom to reshape their workforces", which remain "bottom-heavy" and reliant on administrative roles that could soon face the prospect of automation.
The report's authors suggest that over the next 10 to 15 years, automation could see central government departments cut headcount by a further 131,962, a move the think tank says would shear £2.6bn from the 2016-17 wage bill.
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But Reform's paper argues that, even with these radical workforce changes looming, many departments still follow "an old-fashioned management model involving multiple layers of hierarchy".
"Interviewees for this paper spoke of a 'frozen middle', that is managers in middle layers who are unwilling to execute ideas without guidance from above," the report says. "All Whitehall departments have more than the eight levels of employee grades, seen as the maximum for well-functioning public sector organisations."
The report says that as departments shift to more "diamond-shaped" structures, with fewer administrative staff and a greater focus on "strategic, 'cognitive' roles", the civil service will need to move "from hierarchy to 'self-management'" with teams instead "organising themselves around tasks that need to be done", often on a short-term basis.
"The Government Digital Service (GDS) has done this to great effect, such as when a 16-person team designed GOV.UK in 12 weeks," the think tanks says. "Other departments and arm’s-lengths bodies – from the Crown Commercial Service to the National Crime Agency – could follow."
Any headcount reductions stemming from automation will, Reform argues, need to be done "strategically" rather than for short-term efficiencies, and the paper urges departments to resist "salami slicing roles to make savings".
Instead, the paper calls on leaders to consider how they can automate "repetitive and predictable activities" including "desk-based administrative roles, or physical roles such as cleaners", and gear their organisations around encouraging "skilled practitioners to focus on activities that require currently non-automatable skills".
Among its practical recommendations, the report calls for an end to "cumbersome annual appraisals" for civil servants, and makes the case for more flexibility over pay to allow managers "to build successful workforces" and attract highly-skilled recruits.
"HMRC and the Ministry of Defence have both created new 'government companies' which have some freedoms from public sector pay limits," the report says.
"Academies and foundation trusts have theoretical freedoms to vary pay, although these are rarely used in practice. True flexibility will come when public-sector organisations can manage their pay within a given envelope."
Civil service managers should, it says, be able to "motivate employees as they see fit, unencumbered by rigid pay and performance management structures and role definitions".
Reform also calls for the civil service to make use of "new recruitment patterns", arguing that traditional graduate programmes that place an emphasis on academic qualifications may no longer be the best way to secure specialist skills.
And it urges Whitehall to prepare itself for the rise of the so-called "gig economy", arguing that the public sector "is not keeping up with the potential benefits of flexible employment methods, with very few examples of implementation so far".
Launching the report, Reform senior researcher Alexander Hitchcock said ministers had "too often taken tactical approaches to workforce change by freezing wages or removing jobs to save money, only to rehire staff", and instead called on departments to do more to "build a workforce around people’s needs".
He added: "A new approach should be underpinned by a new mentality: a culture of innovation. Public sector workers are more highly educated than their private sector counterparts. Freeing talented staff to meet citizens’ needs through team-based, self-management models can allow public servants to design policies that meet under needs in innovative ways."
But the Public and Commercial Services (PCS) union, which represents many civil servants at the administrative grades, said Reform's proposals were "the exact opposite of what is needed to improve our public services".
General secretary Mark Serwotka added: "Since 2010, more than 110,000 civil service jobs have gone and, to cope, some departments are now having to re-hire staff they'd cut.
"Technology can help enhance the delivery of public services, but human knowledge, skills and input remain crucial."