Cabinet Office
Good morning, everyone, its a pleasure to be here with you all.
I would like to thank Reform for hosting this conference today.
And I am grateful, too, for Reforms thought-provoking Making the Grade Report published last week - I was fortunate enough to receive it a few days in advance.
It sets out a series of radical recommendations - a couple stand out to me, like establishing a mid-career fast stream and overhauling the methods by which we assess candidates, all of which I am keen to investigate further.
But I was particularly taken with your description of the Civil Service having a people problem, and its what I would like to touch on today as we reimagine Whitehall.
Indeed, if we really want to reimagine Whitehall, to make it more efficient to deliver better services for the public then we must focus on the half a million people who make up our Civil Service.
Because its not the buildings that make up Whitehall, or even the physical location itself - it is the people.
And following our Places for Growth programme, these people are now spread across the United Kingdom. With the relocation of 18,283 roles out of London, a civil servant can now work their entire career without ever having to step foot into Whitehall.
When I spoke about this in January at the Institute for Government, I was clear that we must increase productivity in the Civil Service. Part of that work is, undoubtedly, about getting the Civil Service headcount under control.
The Chancellor has been clear about getting it back to pre-pandemic levels. Doing so will allow us to reallocate resources to our most pressing priorities, like national security.
But the heart of this is to get the most out of our people and deliver more with what we have.
So, I am clear that we should have a Civil Service where the most skilled, innovative and inspired minds are called to serve, to stay and to be successful and fulfilled.
There are three main areas of focus.
First, performance - specifically making sure excellent performance is encouraged and poor performers are managed appropriately.
Second, recruitment - attracting the brightest minds from the broadest backgrounds to public service.
And third, skills - making sure the Civil Service is fit to fight the challenges we face, like the threat of climate change or cyber attacks.
And I have seen in the Cabinet Office the transformation of our capabilities to respond urgently to the challenges around us.
So, starting with performance.
Now, I know from my first hand experience that there are many talented, high performing, highly motivated civil servants who work incredibly hard to serve the public each and every day.
And for the last seven years as a minister, Ive relied on them day in, day out - and as five years as a PPS, I observed them very closely.
But too often, high performance doesnt get recognised, rewarded or incentivised properly.
The National Audit Offices recent Civil Service Workforce report highlighted that less than 1% of the total Civil Service pay in 21 - 22 was performance-related.
Were overlooking a crucial opportunity here.
So let me be clear, Im not advocating for hefty bonuses for civil servants. However, our current pay structure and the absence of recognition for outstanding performance can breed significant issues.
It not only drives talented individuals towards the private sector for better compensation, but it can also fuel grade inflation, where promotions are used to circumvent government-wide pay freezes.
This can result in a loss of expertise and excellence where its most needed.
So, reimagining how we reward performance could unlock unprecedented levels of quality work within the Civil Service, sharpen our policy focus and ensure that taxpayers see tangible improvements.
Thats why I am pleased to announce that we are developing a model of milestone based pay for some specialist functions.
Such a system would allow departments to award performance based incentives for the delivery of specific milestones agreed with ministers.
As a first step, we will pilot this with our most senior grades, and I hope that this will prove to be a first step in moving towards a wider system of performance related pay.
Of course, a crucial part of ensuring a high performing Civil Service is tackling poor performance when it arises.
From my experience in the private sector - I am sure many here would agree - there are no qualms with rooting out poor performance. Either youre in step or youre out of line.
I feel this acutely, because we must never forget - as politicians - that we are stewards of taxpayers money, and we have a duty to do all we can to allocate efficiently.
But we know its not always like that in the Civil Service. Performance management processes can be long and complicated and, frankly, that complexity means that many dont engage at all.
In fact, it can be all too easy for leaders to let people move to another team, to let the poor performer become someone elses problem.
Now, its understandable behaviour but it serves no one well.
Civil servants recognise this as a problem - indeed Reforms recent report highlighted their deep frustration with the survey work they undertook.
We simply cannot allow poor performers to go on hiding in plain sight, dragging down their hard working colleagues and hindering progress.
Im not attacking anyone - Im just stating plainly the reality of what isnt working.
Thats why, during my speech in January, I announced that we were reviewing the performance management regime, in order to ensure staff are supported to tackle poor performance.
And as part of this, we are looking at options to strengthen exit processes around capability issues.
Weve already started this work with our most senior civil servants.
In fact, were gathering evidence from all departments about how they have implemented performance arrangements for their senior leaders. Including, how they set their strategic policy objectives, how they lay down what they expect from their people and how they tackle poor performance.
Im pleased to say that good progress is being made and should conclude next month.
We are also making sure that the system which our departmental leaders use to manage their staff is up to scratch by reviewing the Civil Service Performance Management Framework.
Its a framework that is used across the Civil Service, and its flexibility means it suits all different departments. But my concern is how it is being used.
The Cabinet Office does not always - or, perhaps, rarely - have the force to mandate each Departments behaviour, but we can and will guide it with the soundest frameworks and advice.
Thats why data is being collected from all government departments to assess how effective the approach actually is, and how consistently it deals with poor performance effectively.
By autumn, we will have a better understanding of how these tools are being used, we will then act accordingly and if required, make radical changes ahead of the next performance year.
Next, recruitment.
Previously, I spoke about the difficulties many new civil servants encountered in their first weeks in the role.
The timeline from that vacancy arising to a new civil servant being sat at their desk is - frankly - just too long.
Im pleased to say today that we have made huge progress in this area, using automation to replicate manual tasks at a speed 84% faster than a human equivalent with reduced errors, freeing up time for civil servants to be getting on with their day jobs.
While Im immensely pleased by these achievements, the long-term effects of an overly lengthy recruitment process can leave key posts unfilled. Of course some will walk away from that journey, creating a strong incentive to bypass external recruitment competitions or even forgo competitions altogether to swiftly appoint an internal candidate. Even if they are not ideally suited to the position.
Correcting this is crucial, especially when it comes to our senior roles.
Many of our senior civil servants rise to that status without ever leaving the Civil Service ranks. This is the type of career trajectory you can plot in the public sector if you work hard.
The trouble with such a rise is that we are in danger of group-think: by remaining the same, we do the same things.
Thats why, in May 2022, we reinforced the External by Default policy, to ensure all senior civil service roles were open to external candidates unless agreed otherwise by a Minister.
We have had some tremendous success here, and thanks to this policy, we now see over 93% of permanent Director and Deputy Director roles open to the external market.
But, as with so many things, what is a great start, we need to go further, because this figure drops to just over 61% when including temporary roles.
So, Im pleased to say today that weve asked the Civil Service Commission to review how the external by default policy is applied, so that we can reinforce this ambition.
And I would like to extend this principle beyond senior grades.
Opening up recruitment in this way means we can benefit from the skills and experience of those internally, but also from the wider public, voluntary and private sector.
I want to create conditions that allow for civil servants to leave and gain skills outside the Civil Service but return efficiently and enriched at a later date - and for people w