March 13, 2025 - 1:00pm
A sitting government is taking on the permanent state — specifically its civil service. It is looking to cut costs and make it easier to dismiss staff. It wants to use technology to accomplish more with less, overcoming the inertia of the status quo.
Rather than the Trump administration or Argentina’s Javier Milei, however, the ideological zealots spearheading this drive against the “Deep State” come from the Labour Party. Prime Minister Keir Starmer last night announced his intention to trim Britain’s “overcautious and flabby” state, as well as an overhaul of the “overstretched, unfocused” Civil Service. True to his word, the Labour leader this morning abolished NHS England, returning control of the service to ministers.
Meanwhile, frontbencher Pat McFadden has vowed to introduce performance-related pay for civil servants and a “mutually agreed exits” scheme to remove underperformers. In other words, making it easier to fire people. Speaking to the BBC’s Laura Kuenssberg on Sunday, he also relayed how he wants to double the proportion of civil servants working in digital services “by the end of the decade”. To anyone familiar with industrial disputes, that sounds a lot like restructuring and compulsory redundancies. While Milei brandishes a chainsaw and makes much of his own radicalism, McFadden speaks softly and carries a large stick.
McFadden wouldn’t be drawn on specific numbers, highlighting how Civil Service hires rocketed during Boris Johnson’s premiership despite aims to the contrary. While promising to cut 90,000 jobs, the last government increased headcount by around 100,000.
Alongside vague promises of technological change — specifically the uses of AI — McFadden suggested moving more civil servants beyond London, a favourite of successive governments to not only reduce costs but mask economic decline. It’s also pragmatic clientelism in a time of austerity: offering a marginal constituency or region several hundred jobs makes sense when the public purse is tight. Does it lead to effective outcomes, though? The evidence suggests not. One example is the Office for National Statistics — where, after moving from London to Newport in the 2000s, 90% of senior staff left.
Besides the hackneyed language and well-worn path of moving jobs around, there is also the fact that Starmer’s government has created 27 new quangos since coming into office. Is that really the behaviour of an administration trying to reduce waste? Or perhaps the latest announcement by McFadden is the continuation of the norm over the last 25 years, with policy-making an extension of public communications rather than the other way round.
Despite the techno-managerial argot favoured by Labour ministers, the proposed changes are happening for a very simple reason: Britain is broke. The percentage of public spending which now services debt interest has doubled from 5% in 2019 to 10% today, and the public debt stands at roughly 100% of GDP. If the economy were growing at a clip, that wouldn’t be overwhelming. After all, a combination of growth and higher inflation helped reduce a far higher debt after the Second World War.
There’s one problem, though. Productivity has barely moved since 2007, meaning Britain’s per capita output has stagnated. On top of all that, the Government wants to fund the largest increase to defence spending since the Cold War. It’s no coincidence that McFadden mentioned his Civil Service reforms just as more than £6 billion of cuts to welfare spending was outlined.
But can it work? The Blairite trick of sprinkling jobs outside London is a giveaway, as is the default of referring to AI as a game-changer for public service delivery. Meanwhile, the real waste in public administration — outsourcing and privatisation — continues unabated. In the authority in which I live, where basic services are generally administered by private conglomerates, a new zebra crossing costs more than £100,000 to install. If the Government is serious about a dose of Milei-style politics, it would do well to start there.
That is unlikely, of course, because the veneration of outsourcing is a critical part of the post-Blair Labour project. Rather than admit that, it is easier to do the same thing as Boris Johnson, and target civil servants who have no right of reply.
Aaron Bastani is the co-founder of Novara Media, and the author of Fully Automated Luxury Communism.
AaronBastani
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SubscribeNo doubt some waste arises from outsourcing and privatisation. But anyone with experience in dealing with the public sector would find the assertion that it can routinely deliver services more cheaply and efficiently than “private conglomerates” very hard to accept.
The fact is that, as you say. private companies can deliver services more efficiently and almost certainly more cheaply, except that knowing the funding comes from the public purse by one means or another, they choose to “milk the cow” instead.
Possibly they do. But as public sector productivity is now lower than in 1997, it would appear that they are not the only ones.
Elon Musk: ‘I’m removing 10k bureaucrats’ – hysteria erupts in large sections of the commentariat
Wes Streeting: ‘I’m removing 10k bureaucrats’ – ‘Yes, yes, very sensible, necessary cut’
TBF, the last line is a prediction, so we’ll have to see.
I think its going to be where fhe 10k jobs are cut.
If it’s from “progressive” quangoes and NGOs who are pushing DEI and virtue signalling policies then absolutely expect outrage amongst the Guardian readers and such.
If it’s from the grunts in public facing roles then likely not.
In answer to the headline…No!
I have a horrible suspicion that cutting NHS England will lead to jobs simply shuffling across to existing and new quangos.
I would love to see the NHS rebuilt using the Dutch model, but with dental treatment covered within the base insurance plan (which it isn’t in NL.)
The NL health service saved my daughters life twice in respect to a injury which the NHS failed to investigate despite obvious symptoms for 6 years.