Treasury permanent secretary Tom Scholar’s departure is the beginning of "an ideological purge of permanent secretaries", the FDA has warned.
Scholar left his position last week, saying new chancellor Kwasi Kwarteng had ”decided it was time for new leadership at the Treasury”.
FDA general secretary Dave Penman said new prime minister Liz Truss had missed a "chance to reset the relationship between ministers and civil servants", referring to ministers' increasing attacks on the civil service during Johnson's premiership.
"Even before she was officially elected her team were briefing against the Treasury permanent secretary Tom Scholar," Penman said.
Truss vowed to take on the “Treasury orthodoxy” during the Conservative Party leadership campaign, with the Times reporting in mid-August that she wanted to remove Scholar.
“Now, on the very afternoon that she wrote to civil servants saying that ‘our world leading civil service is the ace up the sleeve of any prime minister’, an ideological purge of permanent secretaries has begun," Penman said, referring to an all-staff email sent out by the new PM following her appointment.
“Civil servants weary of the endless attacks from within the Johnson government would already be judging the new administration by their deeds not words. Ironically, they only needed to wait a few minutes after the message from the new prime minister had dropped in to their inbox to do so.”
Former top civil servants Gus O’Donnell and Nick Macpherson, who were Scholar’s two most recent predecessors as Treasury perm sec, have also slammed Kwarteng’s decision, which comes amid the intertwined cost-of-living and energy crises.
“Tom Scholar is the best civil servant of his generation. Sacking him makes no sense,” Lord Macpherson wrote on Twitter.
Macpherson, who was perm sec at the Treasury from 2005-2016, said Scholar’s “experience would have been invaluable in the coming months as government policy places massive upward pressure on the cost of funding”.
During his time in the civil service, Scholar advised three chancellors, and also served as the UK representative at the International Monetary Fund and the World Bank, played a leading role in dealing with the 2007-2009 financial crisis. He also led the Treasury through the Covid pandemic.
Former cabinet secretary Lord O’Donnell, who Treasury perm sec from 2002-2005, said Scholar's departure is “a massive loss at a time when we need his wisdom more than ever”.
Former Treasury ministers have also criticised the decision.
David Gauke, who held roles under David Cameron and Theresa May including chief secretary to the Treasury, said: "If I was an inexperienced chancellor facing economically tumultuous circumstances, I’d want Tom Scholar on my team."
Gavin Barwell, a former lord commissioner of the Treasury, warned against trying to change things through uprooting senior civil servants.
"Ministers don't need to sack senior civil servants if they want to change policy, nor is it wise to do so both in terms of the impact on the morale of the civil service and when they themselves are in need of experience".
The Institute for Government’s Alex Thomas, who leads the think tank’s work on policymaking and the civil service, said it was “bold to do this when HMT has a big, short-term job to do”, referring to the current economic crisis.
"HMT has a bit of a job on its hands. Why now? What about the markets?” he said.
Thomas, a former civil servant, said the decision sends a signal that top officials are vulnerable and warned it could discourage them from holding truth to power.
On the other hand, he said the decision “makes some sense” if the new political leadership is “serious about big structural reforms to HMT and Scholar was an obstacle”.
He added that now would be the PM's “moment of maximum authority” to make decisions like this.
No.10, approached for comment, referred CSW to the Treasury's press release on recruiting for Scholar's successor given the current circumstances.