Leading Article: Mandarins faced with modernity

THE FORCES of modernity that first swept through business in the Eighties and then much of the public sector have long been resisted by core British institutions. Witness the still antediluvian ways of the monarchy and both Houses of Parliament. But yesterday's announcement of job cuts and restructuring in the upper reaches of the Treasury suggests that, at last, one bastion of the Establishment is reforming itself.

The lower ranks of the Civil Service have already felt these cold winds, and now a further 50,000 of their jobs are due to disappear. But hitherto their bosses, the 'mandarins', have hardly been affected. Now, having imposed privatisation, efficiency measures and decentralisation on other civil servants, senior officials in the Treasury face the rigours of their own logic.

Out go many of the top officials who are currently employed to keep tabs on other increasingly independent departments. The surviving rump can expect to concentrate on advising the Chancellor on macroeconomic policy, international finance and the public purse.

Sir Robin Butler, head of the Civil Service, deserves some credit for supporting steps to uproot an entrenched mandarinate. Where the Treasury leads, other departments should follow. In retrospect, it may have been unfair to have accused the top ranks of protecting their own interests in the drafting of the recent White Paper on Civil Service reform. It is now clear that they will not emerge unscathed.

Yet although the number of senior officials is to be thinned, the danger is that Britain may merely be offered less of the same. Too little attention is being paid to improving the quality of those who play a crucial role in running Britain. The top ranks continue to be filled by Oxbridge graduates with little experience beyond Whitehall. In Germany, nearly a third of senior officials have more than four years' non-government experience. As the academic William Plowden found in his recent study, the best that can usually be expected of a Whitehall high-flyer is a year toiling in Warburg's, Schroder's or some other equally unsatanic mill.

The White Paper acknowledged the desirability of opening up jobs to competition, but failed to adopt even the unambitious targets recommended by the 1993 Oughton Report. Appointments from outside remain an exception.

Newcomers are either swamped by the prevailing culture, or depart in frustration.

Sir Terence Burns, Permanent Secretary at the Treasury and a courageous reformer, was recruited from the London Business School in 1979. His inspiration lay behind yesterday's cutbacks. In other departments, life goes on much as before. In typical style, the position of Permanent Secretary at the Ministry of Defence was awarded unadvertised last month to Richard Mottram.

A genuine overhaul of the top Civil Service, exposing it to the best of modern Britain, is overdue. Painful cutbacks, though necessary, are not enough. We need a new kind of mandarinate.