Hancock plans performance-related pay for Whitehall

22 May 15

Performance-related pay for civil servants and a ‘more porous’ border with the private sector will be introduced to Whitehall over the next five years, Cabinet Office minister Matthew Hancock has revealed.

In his first speech since joining the Cabinet Office in the post-election reshuffle, Hancock said he intended to continue the reforms started by his predecessor Francis Maude, including the push for more public service mutuals and spin outs.

He set out a vision for a more agile civil service with the ‘permission to try’ new ways of doing things and the ‘freedom to fail’ if they go wrong, but which remained true to the nineteenth century Northcote-Trevelyan principles of objectivity, honesty, integrity and impartiality.

In particular, Hancock focused on the civil service’s human resources function, which he said needed to be ‘world class’.

‘To govern modern Britain, the civil service needs to be more like modern Britain,’ the minister said, highlighting that just 7% of applicants to the civil service come from working class backgrounds, and just 3% are offered places.

‘That’s not good enough,’ he told a meeting at the Institute for Government in London today.

Performance-related pay needed to be part of efforts to retain and support the best people.

‘A link between performance and pay is a reasonable link in managing any large organisation,’ Hancock suggested.

And while there should be more exchange of skills and experience between the public and private sectors, he said private sector recruitment was not solely an answer to the civil service’s problems.

‘Running the government is one of the most difficult jobs there is.’

Hancock would not be drawn on where the government would find more savings ahead of the expected Spending Review, but he said the systems for identifying efficiencies were in much better shape than they had been five years ago.

He noted that there was not yet a single platform across government for it to both receive and pay out funds, or a single debt-collection system.

‘Where there are opportunities, let us seize them,’ Hancock said.

‘But it can’t be done with a big stick. The offer has to be attractive to departments.’

Hancock, who is Conservative MP for West Suffolk, was appointed minister for the Cabinet Office and Paymaster General on May 11 following the party’s victory at the election.

He was previously minister of state for business, enterprise and energy and before that skills minister.


  • Vivienne Russell

    Vivienne Russell is managing editor of Public Finance magazine and publicfinance.co.uk

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