50,000 jobs to go in Whitehall reforms

Civil Service's future

Staff numbers to be reduced from just over 530,000 to well below 500,000 over the next four years.

Scrapping of national pay agreements in favour of bargaining by 150 units operating at departmental level.

New Senior Civil Service - covering 3,500 jobs at Grade 5 and above - to be created.

Increased advertising and competition for top jobs.

Individual, fixed-term contracts for some senior staff.

Departments and agencies to set up annual efficiency plans.

THE SENIOR Civil Service will be thinned out, opened up to private sector competition, and given written, individual contracts for the first time, in one of the most far-reaching reforms of Whitehall since the war.

The streamlining - outlined in a White Paper published yesterday - will pave the way for a slimmer, but better-paid, senior level. There will be responsibility-related, and individually determined, pay levels for the 3,500 civil servants in the top five grades.

Ministers intend that at least 50,000 more civil servants at all levels - nearly 10 per cent of the current total - will be shed over the next four years, bringing the total to 'significantly' below 500,000 - compared with its peacetime peak of 748,000 in 1976.

The new flexible pay bands for top civil servants will create new maximum levels of pounds 88,000 and pounds 80,000 - currently pounds 75,328 and pounds 60,990 respectively - for the grades immediately below the rank of permanent secretary. And they are likely to bring more permanent secretaries - whose salaries will be assessed by a new pay committee composed mainly of outsiders - closer to the private sector and towards the pounds 100,000 earned only by Sir Robin Butler, head of the Home Civil Service, and Sir Terry Burns, senior permanent secretary at the Treasury.

With departments to be encouraged to abolish some senior posts at deputy secretary and other levels, William Waldegrave, the Public Services Minister, said the Government expected a 'tauter and flatter' Whitehall. But after a fierce Cabinet debate, Mr Waldegrave, backed by Douglas Hurd, the Foreign Secretary, and Sir Robin, has rejected proposals promoted by the Treasury for explicit departmental or across-the-board targets for manpower reductions, universal fixed-term contracts for mandarins, or the automatic open advertising of all top jobs.

Fixed-term and rolling contracts will be introduced only in an 'appropriate' minority of cases. And Mr Waldegrave predicted that 'most senior posts are likely to be held by insiders as they are in most big firms'. He added that 'open competition need not be used in every case, but it should be considered in every case'.

Furious civil service union leaders last night accused the Government of trying to fragment and politicise the Civil Service. Bill Brett, general secretary of the Institute of Professional Managers and Specialists, said: 'Are civil servants likely to say 'No, Minister' when their job is at risk as well as their performance pay? That is the threat to their position.'

The civil service unions also reacted angrily to the planned job cuts and a proposal that pay should henceforth be decided at departmental level rather than centrally. This is in line with a new policy of allowing individual departments to decide what savings to make to meet the Treasury's freeze on running-cost bills.

In what was seen by Labour and the civil service unions as a retreat from the Government's commitment to market testing, the new policy means individual departments will decide what Mr Waldegrave called the 'best mix of efficiency measures' to meet spending targets. While the Cabinet Office and the Treasury will subject departments to an annual efficiency review, departments will now decide themselves 'how best to use privatisation, contracting out and market-testing'.

Michael Meacher, Labour's Civil Service spokesman, declared yesterday that the White Paper was a 'menu for accelerated privatisation . . . which threatens to destroy the constitutonal principles on which the Civil Service has rested for 150 years.'

John Townend, the right-wing chairman of the Tories' backbench finance committee, claimed it was 'rather conservative compared with the reduction in overheads most private companies have had to make during the recession'.

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