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
No 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.
I can second that. I have to deal regularly with the public sector, without exception they are clueless, lazy and useless. If they were in the private sector they would be out of business within weeks.
In answer to the headline…No!
It’s one thing for a politician to propose an outcome, achieving it is an entirely different thing.
Since Blair, in my mind Labour has been the political face of the “deep state” and Starmer – as we have seen so far – will do nothing to change that.
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.
Indeed 🙂
What I think is really going on here is very much connected to DOGE. Whilst the commentariat is wetting itself about the excision of the divisive nonsense, Musk understands, as I do since seeing the latest generation models in the last few weeks, that we have reached the point where AI can augment and/or replace a lot of what those civil servants are doing. I think Kyle and Streeting are sold on this too.
We can’t do this, so we can either buy a system from China, or from the US (who are behind China in developing this for governance). We will go with the US.
The Palantir NHS contract was the first stage of all this.
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.
Yes – we should be looking abroad to models that actually work. I believe the Dutch system is a variant of the bismarkian approach.
So basically that’s 8000 potential new consultants who can be employed at 5 times their old salary, but with the security of an very generous ecit package, an indexed linked, defined benefit pension to cushion their future retirement, preferential access to any upcoming civil service jobs if they don’t fancy the consulting route (along with uplift of pension,) a number of perks offered to current and ex civil servants through affinity companies, and, at middle and upper eschelons, a network bar none.
Delusional fantasy.
I’ll believe a compulsory redundancy in the public sector when I see one. It’s more likely to end up in rehiring a lot of these people again after they get hefty payoffs.
My money’s on this being little more than a PR announcement with very little behind it. New Labour always was at heart a PR operation.
Of course, Starmer might actually believe he’s going to do this stuff. But he won’t.
Doubtless true, but it’s hard not to believe that Starmer is looking for a scapegoat to explain why his government will fail to achieve anything significant. I suppose that at least shows some foresight. And the £22 billion black hole was getting a bit tired as an excuse.
Being a little kinder, they’ve just found out that actually fixing things is far more difficult in power than it is in opposition. Nobody on any side, to be honest, has the calibre to get Britain back on track.
I worked in the Public Services for 30 years. The problem is not ‘outsourcing’ or ‘in-house’: it’s that both are done so badly so much of the time.
Ideological arguments about the merits of the two don’t help. They’re just a distraction and commentators who indulge in them are actually obstructing improvement and better use of public money.
The fundamental problem (which includes the waste which is inherent in outsourcing – most public service outsourcing results in poorer service at higher cost) is the design and management of service systems.
Any progress in redesigning/implementing improved service designs is hindered by current ‘management thinking’ – which is the source of high costs and Ineffectiveness.
This thinking is in both public and private service organisations and among most politicians who just follow this flawed thinking (which have been failing since the 80s.)
Evidence from work done to change service systems shows that performance can be improved dramatically and at far lower cost.
Trouble is our public service leaders, business leaders, politicians and bureaucrats have not a scooby doo and insist on repeating the same tired and failed actions to reform (Streeting included) but hoping, insanely (to paraphrase Einstein) for different outcomes.
The answer is out there! But is currently being ignored because senior leaders and politicians are ‘old paradigm’ thinkers and simply can’t see/understand it!!
Yet another expert (sic) commentator who writes an article about civil service reform and then throws in random details about non-departmental public bodies and local government, neither of which entities employ civil servants.
“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.”
Until his reincarnation as a Labour politician, Starmer was a supposedly apolitical career bureaucrat in the Civil Service, for which he received his knighthood. He was not a particularly effective Director of Public Prosecutions, being in thrall to international and UK human rights law and contributing significantly to the inability of the UK government to deport illegal immigrants from our shores.
“… Starmer’s government has created 27 new quangos since coming into office.”
Sir Keir Smarmer to a tee! Huffing and puffing about how macho he will be in tackling the Civil Service dragon, but simultaneously extending its reach and grasp through substantial expansion of the unaccountable NGO sector. Perfidious, or whatever?
Just the same as with illegal aliens coming ashore in rubber boats, talk about taming the metasizing growth of government is just that — talk.