Under-performing civil servants face dismissal under Government plans to shake up Whitehall

Under-performing civil servants will face dismissal under plans to shake up Whitehall to be unveiled by the Government today.

Ministers plan to extend performance-related pay in a move which could eventually see officials take a 10 per cent pay cut if they under-perform. But they could get a 10 per cent bonus if they exceed their performance target.

Government sources denied that the changes were a politically-motivated attack by ministers. They said that, during a consultation exercise, many public servants delivering frontline services expressed their frustration that “coasting” colleagues held on to their posts for years and weakened their team's performance. Under the shake-up, such staff would be dismissed or not replaced when they retire. “We will tackle the bottom 10 per cent,” one source said yesterday.

The reforms could also make it easier for ministers to squeeze out the permanent secretaries who head their departments. However, the Cabinet has rejected the introduction of an American-style system where the top officials are party political figures who are re-appointed when a different party wins power.

Today’s “action plan”, to be unveiled by Francis Maude, the Cabinet Office Minister, includes a controversial proposal to “outsource” some policy-making work to think tanks, management consultants and academics. To prevent a spiralling bill for consultants, the outside experts could be paid by results.

The blueprint does not include a new commitment to reduce the size of the civil service. But under the spending cuts already announced, it is already due to shrink from about 500,000 when the Coalition took power to 380,000 by the next general election in 2015.

The reform plans have sparked a behind-the-scenes battle between ministers and Whitehall mandarins, who have opposed some of the more radical options floated by Steve Hilton, David Cameron’s strategy guru, who has now departed for a year’s sabbatical in California. Some measures, including an extension of performance-related pay, will be the subject of further studies.

Ministers want a more flexible civil service to break down the “silos” between different departments, to make it easier for staff to transfer between them and take time out in the private sector to broaden their experience and skills. There will be a drive to improve the performance of officials in areas such as IT, project management and procurement so the Government can get better value for money from private sector contracts.