Whitehall pay shake-up in prospect

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TOP CIVIL servants may be put on personal contracts in a shake-up of Whitehall pay bargaining to be proposed in a White Paper by William Waldegrave, the Cabinet minister for the public service.

Mr Waldegrave, foreshadowing the White Paper in the Commons yesterday, is expected to propose the introduction of personal contracts for about 2,000 senior civil servants above the assistant secretary level. Their pay will be linked to their success in achieving further efficiency, including reductions in Whitehall expenditure. The White Paper, to be published later this month, will propose cutting the Civil Service by about 60,000, to about 500,000. It will mark a shift towards performance-related pay right across Whitehall, which could lead to the end of centralised pay bargaining by the big Civil Service unions.

The move was welcomed by business leaders last night as a long-overdue reform to civil service pay. Civil Service unions are likely to oppose the changes, which will mean that many civil servants will have their pay determined at local level, giving their departments more control over their salaries and conditions.

The White Paper has been approved by a Cabinet committee including Kenneth Clarke, the Chancellor, Michael Heseltine, President of the Board of Trade, and Douglas Hurd, the Foreign Secretary.