Exclusive: Top civil servants face axe: White Paper will call for the biggest shake-up since 1945

CUTS of up to a fifth in the number of top civil servants are among proposals being considered for a White Paper in one of the boldest shake-ups of Whitehall since the Second World War.

One of the most radical proposals would involve the progressive elimination of 150 out of the 626 mandarins, people in the top three Civil Service grades, earning between pounds 52,000 and pounds 90,000.

The most extreme option being discussed by ministers is a wholesale uprooting of the Civil Service on the model of New Zealand, where department managers were given almost total freedom to negotiate their own contracts with employees.

Such a radical transformation of the Civil Service career structure would for the first time extend the Government's Whitehall reforms to the top three levels, including the permanent secretaries who head Whitehall departments.

Kenneth Clarke, the Chancellor of the Exchequer, and Michael Heseltine, President of the Board of Trade, are leading the campaign for a Whitehall overhaul which could lead to senior civil servants being given individual fixed-term contracts and most top jobs being advertised and open to outsiders.

One political benefit of a robust approach to cutting senior Civil Service numbers - particularly in the view of the Tory right - is that ministers are seen not to be sparing the government machine at a time when programmes and services to the public are being hit.

A number of senior ministers, including Douglas Hurd, the Foreign Secretary, do not oppose reform but believe it would be wrong to specify an across-the-board target for reducing the number of senior officials - not least because some departments have much greater success than others in reducing numbers at senior level.

The Foreign Secretary is expected to bring his influence to bear by restraining his colleagues from embracing some of the most radical solutions being pressed by Mr Heseltine and Mr Clarke, as he did in the case of the decision to privatise a probable 51 per cent of the shares in the Royal Mail.

Mr Clarke and Mr Heseltine are also being urged by some ministers not to destroy the idea of an administrative public service, nor to end a career structure in which officials who may be required to take up a new post at short notice are offered traditional Civil Service job security in return.

The reformers, whose plans are being considered by the Downing Street policy unit and William Waldegrave, who is responsible for the Civil Service, are disappointed that a review of the service carried out by John Oughton, head of the Cabinet Office's efficiency unit, did not propose radical reforms.

His report, published last month, said open advertisement should be considered for some top jobs but argued that 'the expectation is to appoint from within'.

The radicals say many of the lower ranks of the Civil Service have had to compete for their jobs because of the contracting out of central government functions to 'next steps' agencies and that it is now the turn of the higher grades.

They are pressing to make Whitehall less hierarchical: one proposal is that one or two of the three top grades, permanent secretary, deputy secretary or grade 3, would be abolished - or in Whitehall jargon, 'delayerised'.

Ministers are hoping to bring out a White Paper - possibly with 'greenish' edges, Whitehall parlance for a document which has a consultative flavour - before the summer recess.

Whitehall culture, page 2

Andrew Marr, page 23