Calls for civil servants to be paid more and appointments process modernised

Analysis by the Institute for Government came after the Prime Minister pledged to cut Civil Service jobs to pay for an increase in defence spending.

The Institute for Government said the real-terms salary decreases across the Civil Service over more than a decade were ‘particularly acute’ at the most senior levels (Yui Mok/PA) (PA Wire)

Civil servants should be paid more to attract the best talent to Whitehall and the outdated process of appointments is too easily “gamed”, according to research by a leading think tank.

Analysis by the Institute for Government (IFG) of 148 senior roles across the 19 main government departments also found many officials lacked “valuable” experience of work outside the Civil Service.

The IFG added that the high proportion of top officials who were Oxbridge educated could be due to candidates being prized for “their credentials and stylised behaviours”, rather than their achievements.

The report, Who Runs Whitehall? The Background, Appointment, Management And Pay Of The Civil Service’s Top Talent, said the real-terms salary decreases across the Civil Service over more than a decade were “particularly acute” at the most senior levels.

Average pay for both director generals and permanent secretaries was found to have fallen in real terms by approximately £35,000 and £40,000 respectively.

The analysis described the difference between pay at senior levels of the Civil Service and the wider economy as “extreme”, with average permanent secretary earnings some 10% of the average wage of a FTSE 250 chief executive.

In addition, other leaders in the public sector were found to be better paid than top civil servants.

The UK’s fiscal situation is difficult and there are savings ... to be made by holding down Civil Service pay. But making those savings would be a false economy if they degrade the capability of the administrative state in a way that ends up costing the country more money

IFG report

The average director general’s annual pay in 2023 was £138,500, while pay for comparable roles in sectors such as local government and the NHS ranged from £185,000 to £395,000.

The report said “excessively low pay” disincentivised “top talent from coming into government” and the Civil Service had “fallen too far behind both the private and rest of the public sector to attract the talent it needs”.

It added: “The UK’s fiscal situation is difficult and there are savings (albeit small, in the context of government budgets) to be made by holding down Civil Service pay. But making those savings would be a false economy if they degrade the capability of the administrative state in a way that ends up costing the country more money.

“The Government should give permanent secretaries and (director generals) a real-terms pay rise at the next opportunity, while also urgently commissioning a benchmarking exercise and using its results to think strategically about how high pay needs to be to attract and retain the people the Civil Service needs.”

The call for improved pay for senior civil servants comes after Prime Minister Rishi Sunak vowed to cut 70,000 Civil Service jobs to help fund an increase in defence spending to 2.5% of gross domestic product.

The report also called for the appointments process for Civil Service roles to be modernised as “a cautious and outdated notion of what fair, open and meritocratic recruitment means” did not always lead to the best candidates being hired for senior roles.

The IFG is critical of a “traditional” recruitment model used by the Civil Service which was described as “someone has a bunch of scripted questions, someone has a bunch of scripted answers … there’s no actual exchange of information”.

“Traditionally, the Civil Service has been wary of more informal processes, but the current rigid process is easily gamed and less effective than it should be,” the report added.

Meanwhile, the analysis found that less than a quarter of permanent secretaries and director generals had a degree in STEM (science, technology, engineering or mathematics) subjects.

This compared to 44% of all UK graduates.

But, excluding scientific advisers who would be expected to be qualified in STEM subjects, the IFG found some five officials who had studied such a subject at postgraduate level, highlighting that the educational background “skews” to humanities and was “narrow”.

The report said this contributed to senior officials feeling more comfortable in jobs where literacy was the key skill rather than numeracy, leading to a failure to grasp the “importance and potential of data and quantitative methods” to inform judgments on whether evidence was robust.

The analysis showed 52% of senior officials attended Oxford or Cambridge universities in some capacity, including 74% of permanent secretaries.

“It should be prized” that many civil servants attended two of the best universities in the world, the IFG said.

“But this may become problematic if it reflects an internal culture that values candidates having been at Oxbridge more highly because of their credentials or behaviours, rather than their skills or achievements,” it added.

The report found 45% of permanent secretaries and director generals were initially externally recruited, but only 16% took on their current role from outside the Civil Service.

This is largely as it should be” for permanent secretaries, the IFG said, as they are required to operate in an “intensely political environment” manage multiple budgets and are held responsible by Parliament for their role.

The quality of our most senior civil servants is crucial to the success of the UK. There is room for more of them to be recruited from scientific backgrounds and from outside government

Jordan Urban, IFG

But the report added “there is far more scope for directors general to be appointed externally” as they have less responsibility for the overall effectiveness of their departments and are less exposed to parliamentary scrutiny.

Overall, two-thirds of top officials were found to have some experience outside the Civil Service, but only just over a third of them had experience in a leadership role for more than three years.

Jordan Urban, senior researcher at the IFG and lead author of the report, said: “The quality of our most senior civil servants is crucial to the success of the UK. There is room for more of them to be recruited from scientific backgrounds and from outside government.

“They should move around less quickly. And, if the Government is serious about attracting the best, they should be paid more. A more modern appointment process, and a more conscious effort to foster a national culture of contributing to government, would make the Civil Service and so government more effective.”