The Labour government faces the critical challenge of achieving growth and delivering a digital transformation to government while facing stretched public finances. The civil service is foundational to delivering any government’s mission. Its struggle to attract and retain digital experts threatens to derail Labour’s ambitions. While difficult amid overstretched budgets, the solution is clear: prioritise competitive pay for government data and digital professionals.
A salary deficit
The civil service's uncompetitive salaries for technology professionals have created a significant talent gap. With cyber specialists able to earn five-to-seven times more in the private sector, it is no surprise that roles remain unfilled for years. The nearly three-year-long struggle to appoint a chief digital and information officer underscores the extent of this talent vacuum.
A shortfall of digital professionals is particularly alarming given Labour’s ambitious digital projects, including NHS patient passports and the National Data Library. Without the appropriate number of skilled professionals to develop and maintain these systems, they risk being delayed, poorly implemented, or abandoned altogether. The current salary structure does not reflect the high level of expertise these roles demand.
The GDaD, a flawed approach?
While the Government Digital and Data (GDaD) framework provides some pay incentives, its voluntary nature and narrow scope render it flawed. Critical roles in cybersecurity and data protection remain outside its purview. Moreover, salary uplifts do not reflect inflation or evolving market rates, meaning the framework fails to address long-term retention challenges.
The government’s reliance on consultants to compensate for these shortages is also unsustainable. Between 2019 and 2023, spending on management consultants surged by 75%, with the majority of funds directed towards meeting technical needs. This practice is counterproductive. Former civil servants can return as consultants at higher salaries, effectively costing taxpayers more for the same expertise that could have been retained in-house.
The UK must learn from international best practices. The US Department of Defence introduced a competitive pay incentive scheme for technical roles and Singapore has gone even further, benchmarking government tech salaries against leading private firms. While the UK need not fully replicate these models, it must acknowledge that significantly undervaluing technical talent will continue to restrict digital transformation efforts.
A necessary investment for the future
Our recently published UK Day One report comprehensively explores these issues and offers a number of practical, realistic policy recommendations on steps that could be taken to address technical talent retention and the existing pay gap between civil service and private sector pay.
While increasing pay is a necessary condition and the primary focus of the UK Day One report, broader systemic factors will also need to be considered for successful implementation of salary reform. Differences in workplace culture between the private and public sectors, such as attitudes to flexible working, reflect the need for competitive salaries to be complemented by modernised work environments.
Additionally, implementing recommendations won’t yield immediate benefits. Rejigging approaches to personnel – and paying people more – may not be popular. While changes can leverage reductions in consultancy spending, there will still be increases in public expenditure. Creating a compelling political narrative to sell the changes on the promise of long term benefits will be key to ensuring a sustainable and effective digital transformation.
It is naive to think the government can match private sector salaries pound for pound. However, it is equally naive to believe that job security and a good pension alone will entice high-performing top-tier tech talent to the civil service. Without competitive pay, the government will remain dependent on consultants, delaying digital initiatives and increasing costs for taxpayers.
By adopting our recommendations, the government will attract and retain technical talent to ensure the success of its digital transformation agenda. If Labour truly wants to modernise public services, it must put its money where its mission is, by paying for the talent it needs.
Joseph Jarnecki is a research fellow at the Royal United Services Institute (Rusi).Natasha Buckley is a researched analyst at Rusi. The UK One Day report, Recruiting and Retaining Civil Service Technologists, was published on 22 January and can be read here