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Whitehall Monitor 2025

Part 2: The state of the civil service

Analysis of the civil service the new government inherited – including its size, structure, morale and pay.

Government offices in Whitehall, London
High staff turnover, confused workforce planning, slipping morale and uncompetitive pay are just some of the problems across the civil service.

The size of the civil service

The expansion of the civil service has continued

The past year has been marked by continued growth in the civil service. The latest data shows that in Q3 2024 civil service numbers stood at 515,085 (on a full-time equivalent (FTE) basis). This represents growth of 3.8% over the previous 12 months.

This growth occurred despite the former chancellor Jeremy Hunt imposing an “immediate” cap on civil service headcount in October 2023. 1 HM Treasury, ‘End to Civil Service expansion and review of equality and diversity spending announced in productivity drive’, 2 October 2023, www.gov.uk/government/news/end-to-civil-service-expansion-and-review-of-equality-and-diversity-spending-announced-in-productivity-drive  Indeed, following this announcement the civil service expanded by 1.3% in Q4 2023 and 1.6% in Q1 2024. The rate of growth fell to 0.5% in Q2 2024 and 0.4% in Q3 2024.*

The civil service has now expanded in all but one quarter since the EU referendum in 2016, with the quarterly growth rate sometimes approaching 3% during the pandemic. While much of this growth – particularly in response to the referendum and pandemic – was explicable and necessary, it has not unwound, and the post-pandemic expansion has occurred without a comprehensive plan or rationale.

More concerning is that it has been contrary to the explicit intentions of ministers. This unplanned growth represents a continued failure by both ministers and Whitehall leaders to properly plan and manage the civil service workforce.

A line chart from the Institute for Government, showing the quarterly growth rate of the civil service between Q2 2009 and Q3 2024. The civil service shrank between late 2009 and mid-2016, sometimes by more than 2% per quarter. It has grown since then, with quarterly growth at one point during the pandemic reaching almost 3%.

In July 2024, the new Labour government announced that it would lift Hunt’s headcount cap. This was intended to help departments save money on consultancy spending (discussed in a separate chapter of this report) and “make value for money decisions about how to resource work”. 2 HM Treasury, Fixing the foundations: public spending audit 2024–25, 2 August 2024, www.gov.uk/government/ publications/fixing-the-foundations-public-spending-audit-2024-25/fixing-the-foundations-public-spending-audit-2024-25-html  The government has also confirmed that it is developing the civil service’s first strategic workforce plan, 3 Institute for Government, ‘In conversation with Cat Little, Civil Service Chief Operating Officer’, 2 December 2024, www.instituteforgovernment.org.uk/event/cat-little-civil-service-chief-operating-officer  and has pledged “underpinning reform proposals” to enhance its efficiency and effectiveness. 4 HM Treasury, Fixing the foundations: public spending audit 2024–25, 2 August 2024, www.gov.uk/government/ publications/fixing-the-foundations-public-spending-audit-2024-25/fixing-the-foundations-public-spending-audit-2024-25-html; HM Treasury, Autumn Budget 2024, 30 October 2024, www.gov.uk/government/publications/autumn-budget-2024

While there has been no further detail, this broad approach will be welcome if borne out. The previous government made a mistake in trying to make savings through the blunt instrument of a headcount cap – an arbitrary figure divorced from any assessment of how large the civil service needs to be. A more sensible approach to workforce planning, focused on cost effectiveness rather than headcount, would involve a detailed assessment of the demands likely to be placed on the civil service in the medium term, the mixture of skills and professions it is likely to need, and the likely impacts of artificial intelligence and greater automation.

Despite some significant changes, the largest and smallest departments in Whitehall remain the same

This year we have changed our methodology for assessing how individual departments have changed in size over time – to include, rather than correct for, staff movements that were the result of machinery of government changes.**

A bar chart from the Institute for Government, showing the change in the number of staff in each civil service department between Q3 2023 and Q3 2024. DSIT has grown the most, by almost 30% (adding 1,550 staff), while DCMS has seen biggest decrease in staffing, of almost 30% (losing 770 staff).

Using this new methodology, the data shows that over the 12 months to Q3 2024 the recently established Department for Science, Innovation and Technology (DSIT) expanded by 30%, adding more than 1,500 officials. Most of this change is accounted for by 810 staff moving from the Department for Culture, Media and Sport (DCMS) to DSIT in Q1 2024,*** though there was also a move of 70 officials to the department from the Cabinet Office in Q4 2023.

Unsurprisingly, the other two new departments set up under Rishi Sunak also saw significant growth over this period as they got up and running, with the Department for Energy Security and Net Zero (DESNZ) expanding by more than 12%, and the Department for Business and Trade growing by more than 8.5%. The Home Office also saw significant growth, of almost 12%. DCMS has experienced the most significant fall in staffing, as a result of the staff move to DSIT. If this move is excluded, the department in fact grew slightly between Q3 2023 and Q3 2024.

A series of line charts from the Institute for Government, each showing the changing size of each department, in percentage terms, between Q3 2010 and Q3 2024. This shows that all departments saw declines in staff numbers after 2010, followed by increases, to varying degrees, in later years. All but four departments (DWP, MoD, DfT and HMRC) are now larger than they were in 2010. Several departments have seen dramatic increases in staffing over the period, including DCMS, MHCLG and DfE.

In some cases, these changes over 12 months continue longer running trends (see figure above). The Home Office, for example, had been expanding continuously since 2017, with its rate of growth increasing significantly in late 2023 and early 2024, probably due to pressures around illegal migration. Q3 2024 ended this trend, marking the first quarter in which the Home Office shed staff since Q4 2016.

The sizes of both the Department of Health and Social Care and the Department for Work and Pensions (DWP), each of which expanded by more than 8% over the 12 months to Q4 2024, have been more volatile. DHSC grew rapidly during the pandemic, shed staff afterwards, and has begun to expand again over the past year. DWP, meanwhile, also saw a brief but rapid expansion during the pandemic having shrunk since 2010, and subsequently shed numbers again before beginning to add them in recent quarters. The declining size of DCMS, on the other hand – which as outlined above reflects machinery of government changes – has begun to reverse its breakneck expansion it has seen since late 2015.****

These changes leave both the largest and smallest departments in Whitehall unchanged from the same time a year before. The Ministry of Justice (MoJ), DWP, His Majesty’s Revenue and Customs (HMRC), the Ministry of Defence (MoD) and Home Office are the five largest departments, and DCMS, the Treasury, DESNZ, DSIT and the Foreign, Commonwealth and Development Office (FCDO) are the five smallest.

As the figure above shows, it is notable that three of the four largest departments (DWP, HMRC and MoD) remain smaller now than they were in 2010. This is why, despite most departments being significantly larger now than in 2010, the civil service overall only recently surpassed its most recent previous peak size in 2009.

A bar chart from the Institute for Government, showing the size of each civil service department in Q3 2024, broken down into ‘core department’ and ‘other organisations’. The MoJ and DWP are the largest departments, with between 80,000 and 90,000 staff, and HMT and DESNZ are the smallest, with less than 5,000.

These figures give an overview of how the civil service as a whole and individual departments have changed in size. But it is often more difficult, at least using publicly available data, to understand why these changes have occurred. In some departments (or, more accurately, departmental groups), it is clear what lies behind the changes. In the MoJ, for example, 80% of its growth between Q2 2016 and Q3 2024 occurred in His Majesty’s Prison and Probation Service,***** suggesting that the growth in numbers has been a response to the significant pressures in those services. 5 Hoddinott S, Rowland C, Davies N, Darwin K and Nye P, Fixing public services: priorities for the new Labour government, Institute for Government, 2024, www.instituteforgovernment.org.uk/publication/fixing-public-services-labour-government  In many other departments, however – including the Home Office, Defra, the Cabinet Office and Department for Education (DfE) – this data does not show where most of their growth has occurred.******

 


* We analyse civil service numbers on an FTE basis – as opposed to headcount, which is the measure that the former chancellor’s cap applied to. However the civil service has continued to expand on both an FTE and headcount basis since the cap was announced.

** For more information, see Methodology.

*** These staff were transferred to the DSIT payroll in Q1 2024, having previously been paid from the DCMS payroll while in fact working for the new department.

**** The longer term trends in civil servant numbers by department also show the impact of our methodological change. The significant expansion of DHSC in Q2 2013, for example, reflects the creation of Public Health England (PHE), which brought an additional 4,800 staff into the departmental group of what was then the Department of Health. The employees of PHE’s predecessor (the Health Protection Agency) were not classified as civil servants. MHCLG shows a similar example – its expansion in Q3 2023 reflects the move of HM Land Registry into the department from BEIS.

***** Or its predecessor, the National Offender Management Service.

****** In the chapter of this report on the civil service professions and functions, we use data on the professions to shed more light on the reasons behind the changing sizes of different departments.

Turnover and leaving route

High turnover is still a problem across the civil service

The high frequency with which officials change roles harms civil service effectiveness. Previous Institute research has found that high turnover reduces productivity, disrupts long-term projects, undermines specialist knowledge and expertise, and leads to increased costs relating to recruitment and training. 6 Sasse T and Norris E, Moving On: The costs of high staff turnover in the civil service, Institute for Government, 2019, www.instituteforgovernment.org.uk/publications/moving-on-staff-turnover-civil-service

In 2023/24, more than one in 10 civil servants (12.7%) either moved between departments or left the civil service entirely. This represents higher turnover than in 2022/23, and while not quite as high as the post-pandemic peak of 13.6% in 2021/22, is the second highest level of churn* in the civil service since at least 2010/11. Importantly, these figures do not account for the regular moves that officials make within the same department, meaning they significantly underestimate the true level of turnover.

The higher rate of turnover in 2023/24 was driven by an increase in internal transfers (staff moving between departments), which reached a record high of 5.2% of the workforce and will have been partially driven by machinery of government changes including the creation of DESNZ, DSIT and DBT in 2023. This offset the encouraging drop in the proportion of staff leaving the workforce in 2023/14, at 7.5%, after it had spiked to 8.9% in 2021/22 and 9.0% in 2022/23. Anecdotal evidence suggests that at least some of this reduction was related to the pay deal put forward in June 2023 (discussed more later). 7 Cabinet Office, ‘Civil Service Pay Remit Guidance, 2023 to 2024’, updated 2 June 2023, www.gov.uk/government/publications/civil-service-pay-remit-guidance-2023-to-2024/civil-service-pay-remit-guidance-2023-to-2024

There is some indication that turnover is even higher in the senior civil service. Cabinet Office estimates published by the Senior Salaries Review Body suggest that, including moves within the same department, about a third of senior civil servants left or moved roles in 2022/23. 8 Review Body on Senior Salaries, Forty-Sixth Annual Report on Senior Salaries 2024, Report No. 97, July 2024, https://assets.publishing.service.gov.uk/media/66a7a3c849b9c0597fdb066e/SSRB_Annual_Report_2024_Accessible.pdf  This proportion has been steadily increasing since the pandemic, with significant implications for institutional memory, effectiveness and delivery across Whitehall.

Within core departments, overall turnover was highest in 2023/24 in DHSC (24%) and at the centre of government, in the Treasury (21.8%) and the Cabinet Office (20.5%). The practice of civil servants being posted to the centre before moving back into other departments explains some of this, but such high levels of churn remain counterproductive.

While turnover decreased in 2023/24 across most departments – most dramatically in the Ministry of Housing, Communities and Local Government (MHCLG), by 7.1 percentage points (ppts) – it increased in the MoD, HMRC, DfE, the Department for Transport (DfT) and DHSC. The increase in churn was highest in DfT – by 3.4ppts. Turnover in the Welsh and Scottish governments has remained lower than in Whitehall departments (4.8 and 5.1% respectively), mostly due to the very low number of internal transfers.

A small multiples chart from the Institute for Government showing civil service staff turnover by department, 2018/19–2023/24, where levels of turnover have been much higher in the Cabinet Office, DHSC and Treasury than in other core departments. Most departments saw a fall in turnover in 2023/24.

The most common leaving routes for civil servants vary by department

There are several ways for officials to leave the civil service. Resignation is by far the most common. In 2023/24, over half of those who left the civil service had resigned (56.3%). Retirement is the second most common – between 20% and 30% of civil
service leavers were retirees in every financial year since 2018/19. And both dismissals and the end of temporary appointments accounted for about 7% of civil service leavers apiece in 2023/24.

During the pandemic, staff who resigned dropped as a share of total leavers – from 46.4% in 2019/20 to 39.1% in 2020/21, but subsequently rebounded and has since stabilised at a slightly higher rate than before the pandemic. By contrast, the figures for retirement and voluntary exit or redundancy peaked during the pandemic (reaching 27.6% and 10% of leavers respectively in 2020/21) and have been lower in recent years (21.8% and 4.0% in 2023/24).

The breakdown of leaving routes differs by department. Though resignation is the most common route across most (core) departments, in some, such as DCMS, it is the overwhelming reason for departure (79.9% in 2023/24), with retirement a far less common cause than elsewhere in Whitehall. The share of staff retiring varies substantially between departments, accounting for 40.7% of all leavers in DWP and only 1.6% of leavers in the Treasury in 2023/24.

Because departmental patterns in how civil servants leave vary over time, annual figures provide only a snapshot. For example, while 2023/24 saw resignations as a share of total leavers fall in most departments, the MoD saw it jump from 58.5% to 72.9%. The particularly high numbers of staff leaving through voluntary exits or redundancies in DHSC and DfE in 2023/24 are also one-off events rather than marking a more long-standing pattern.

Long-standing trends in civil servants’ intention to leave continue

Using data from the Civil Service People Survey, 9 Cabinet Office, ‘Civil Service People Survey: 2023 results’, 29 February 2024, www.gov.uk/government/publications/civil-service-people-survey-2023-results  we can also see how officials feel about remaining in the civil service, and how soon they intend to leave.

The data shows that in 2023, roughly half of civil servants planned on staying in their organisation for at least three years (49.4%). This figure has been on a slow but noticeable downward trajectory since 2010, though with a pandemic-induced increase in 2020. The opposite is true of the share of staff who say they want to stay in their organisation for at least a year, which has risen almost every year since 2010 and in 2023 stood at 30.4%.

Those who say they want to leave their organisation within 12 months or as soon as possible make up 13.1% and 7.2% of the civil service respectively. The former figure is only slightly higher in 2023 than in 2010 (9.5%), whereas the latter is slightly lower than in 2010 (9.5%). The share of staff wanting to leave either as soon as possible or within 12 months dipped in 2020 and has ticked up since.**

Year-on-year changes in these metrics are often not substantial in most (core) departments. But there are exceptions. In 2022, for example, in the Cabinet Office the share of civil servants wanting to leave as soon as possible increased to 16.4% (from 9.9% in 2021). In 2023, however, the figure declined to 10.8%, and the proportion of officials intending to stay for longer periods of time increased.

 


* In this section, ‘turnover’ and ‘churn’ are used interchangeably.

** The data also show that the desire for better pay and benefits is the most common reason for such officials wanting to leave the civil service.

Morale

The civil service tracks the morale and views of its workforce through the annual Civil Service People Survey. 10 Ibid.  The survey covers a range of topics, from officials’ understanding of the Civil Service Code to their views on their manager and team and detailed questions about their wellbeing.

Overall civil service morale has continued to fall

The headline measure of the people survey is the Employee Engagement Index. This is used as a measure of officials’ overall attitudes to their organisation, calculated using responses to questions around their motivation, and pride in and attachment to their organisation.

Across the civil service as a whole, the engagement index fell in 2023* for the third consecutive year, following a near decade-long trend of rising morale. However, as discussed in the preceding chapter, this has only translated into minimal increases in the proportions of officials intending to leave their organisation as soon as possible or within 12 months. Unlike in 2022, when the engagement index fell in every department, there was a more mixed picture in 2023. The index rose in most departments, and particularly strongly in the Cabinet Office and FCDO, where it increased by more than 4ppts.

A bar chart from the Institute for Government, showing the engagement scores of civil servants by department in 2022 and 2023. Most departments saw an increase in their score in 2023, most notably the Cabinet Office and FCDO. Overall however, whole civil service engagement score fell slightly.

In both cases this followed a trend of marked falls in engagement – the Cabinet Office’s score had fallen for four consecutive years, including a dramatic fall of almost 9ppts in 2022 (tallying with the significant increase, discussed in the preceding chapter, in the proportion of Cabinet Office officials wanting to leave the organisation as soon as possible in that year, and perhaps not coincidentally with the short-lived Truss premiership); the FCDO’s index had fallen by a total of 10.5ppts between 2019 and 2022. DHSC and HMRC, meanwhile, saw the largest falls in engagement between 2022 and 2023, by a relatively modest 2.5 and 2.7ppts respectively.

Officials are more satisfied with their pay

Beyond the headline engagement index, the people survey also tracks civil servants’ overall satisfaction in nine broad areas. Similarly to the engagement index, these nine ‘theme scores’ are calculated using officials’ responses to several questions under each theme. With the exception of the ‘pay and benefits’ and ‘leadership and managing change’ themes, officials’ satisfaction in all of these areas has broadly trended upwards for almost a decade and a half.

There were some notable changes to the theme scores in 2023, both across the civil service as a whole and in individual departments. The civil service-wide measure of satisfaction with ‘leadership and managing change’, for example, declined for the third year in a row, though by less than a percentage point. Analysis of individual departments shows a mixed picture – in HMT this measure fell by more than 5ppts, in DHSC by more than 4ppts and in both DfT and HMRC by more than 3ppts. On the other hand, the measure increased by over 7ppts in the Cabinet Office and more than 5ppts in the FCDO.

Satisfaction with ‘organisational objectives and purpose’ also showed an interesting picture in 2023. While the civil service-wide measure rose by less than one percentage point, this masked significant improvements in departments such as the Cabinet Office (+7.1ppts), MHCLG (+7.3ppts) and FCDO (+8.8ppts).

However, it was the measure of officials’ satisfaction with pay and benefits that saw the most marked change across the civil service as a whole in 2023. The proportion of officials satisfied with their remuneration increased by over 3ppts, following a fall of almost 9ppts in 2022. Officials’ more positive outlook likely reflects the 2023 pay settlement** – generous in comparison with 2022 – in which non-senior civil servants received a pay increase of up to 4.5% (rising to 5% for the lowest earners) and a one-off payment of £1,500. 11 Cabinet Office, ‘Steps forward made on pay following constructive discussions with unions’, 2 June 2023, www.gov.uk/government/news/steps-forward-made-on-pay-following-constructive-discussions-with-unions  Senior civil servants received a 5.5% increase, with a further 1% available for the lower-paid, in line with recommendations from the Senior Salaries Review Body. 12 Cabinet Office, ‘Guidance on the Senior Civil Service Pay Award 2023/24’, 19 July 2023, www.gov.uk/government/publications/guidance-on-the-senior-civil-service-pay-award-202324

Last year, the new government announced a 5% uplift for both junior and senior officials. 13 Cabinet Office, ‘Civil Service Pay Remit Guidance 2024 to 2025’, 29 July 2024, www.gov.uk/government/publications/civil-service-pay-remit-guidance-2024-to-2025  Any impact of this decision will be reflected in the 2024 people survey, which closed late last year.

A line chart from the Institute for Government, showing civil servants’ satisfaction with their pay and benefits by department between 2010 and 2023. The Home Office, CO, HMRC, FCDO and whole civil service series are highlighted. All of these series saw a fall in pay satisfaction in 2022, and all but HMRC saw a slight rebound in 2023.

Again, there is a more nuanced picture of pay satisfaction in individual departments. The Home Office saw a remarkable rise of over 11ppts in 2023, for example, while in the Cabinet Office there was a smaller but still very significant increase of more than 7ppts.

There were still three departments (MHCLG, DfT and HMRC) in which satisfaction with pay fell. HMRC is particularly notable – the measure fell by more than 4.5ppts in 2023, following the fall seen in all departments in 2022. This followed HMRC’s measure of satisfaction with pay more than doubling – from 23% to more than 47% – in 2021.

Looking across the range of theme scores also gives a sense of the overall performance of departments in 2023. Both the FCDO and Cabinet Office, for example, saw strong improvements across multiple theme scores, as reflected in their higher overall engagement scores. Worse performing was HMRC, which saw notable falls in its scores for leadership and managing change, learning and development, and pay and benefits.

DSIT has struggled to achieve the morale levels of its predecessor department

The 2023 survey was also the first year in which three new departments – DBT, DESNZ and DSIT – took part. Across the core themes, DBT’s scores were largely similar to those of its predecessors (BEIS and DIT) the year before. Some exceptions can be seen in the ‘organisational objectives and purpose’ theme score (DBT’s was 6.7ppts lower than DIT’s in 2022, though similar to BEIS’s) and satisfaction with pay and benefits (DBT’s 2023 score was 5.9ppts higher than DIT’s in 2022, though most departments improved in this regard in 2023 in any case). DESNZ’s scores were similar to those of its predecessor BEIS on all measures.

A line chart from the Institute for Government, showing civil servants’ satisfaction with their department’s organizational objectives and purpose, by department, for newly established departments and their predecessors, between 2016 and 2023. DSIT’s score in 2023 is below that of its predecessor DCMS, while DBT’s 2023 score is similar to the final scores of BEIS and DIT in 2022.

DSIT has not fared as well. Across every theme score, it performed worse than its main predecessor department (DCMS) in 2023, and worse in all but one measure (‘my work’) than DCMS in 2022.

A line chart from the Institute for Government, showing civil servants’ satisfaction with leadership and how change is managed, by department, for newly established departments and their predecessors, between 2016 and 2023. DSIT’s 2023 score is below that of its predecessor department DCMS, while those of DESNZ and DBT are similar to the 2022 scores of BEIS and DIT.

Most concerning for a newly established department, its scores for ‘leadership and managing change’ and ‘organisational objectives and purpose’ were 8 and 11 points below those for DCMS in 2023 respectively. Overall, its engagement score – at 60.3% – is relatively low, and more than 10ppts lower than DCMS’s.

A line chart from the Institute for Government, showing civil servants’ engagement scores, by department, for newly established departments and their predecessors, between 2016 and 2023. DSIT’s 2023 score is below that of its predecessor DCMS, while those of DESNZ and DBT are similar to the 2022 scores of BEIS and DIT.

 


* Data collection for the people survey happens between September and November each year, but there is a delay of some months between the survey being completed and the results being published. While the 2024 survey was completed late last year, the 2023 results are still the most recent available.

** The ‘2023 pay settlement’ refers to the 2023/24 pay award, announced in June 2023. Civil servants would have begun feeling the impact of this award during 2023, explaining the increased satisfaction with pay in the 2023 people survey, which collects data in autumn each year. Other sections of this report discussing civil service pay show an increase in pay in 2024. This also reflects the 2023/24 pay award, and occurs because the annual Civil Service Statistics publication captures data on 31 March each year. The 2024 data on pay was therefore captured on 31 March 2024, reflecting the final month of the 2023/24 pay award.

Grade structure and pay

There has been a big shift in the grade structure of the civil service

Between 2010 and 2016, as the civil service shrank, the numbers were mainly shed at the lowest grades. In both absolute and percentage terms, reductions were concentrated among the most junior ‘administrative officer/assistant’ (AO/AA) grades.

The post-2016 expansion of the civil service did not replace these officials. Indeed, the ranks of AO/AAs continued to shrink. Instead, this period saw growth in slightly more senior as well as mid-level ranks. The number of ‘executive officers’ (EOs), for example, having fallen between 2010 and 2016, had returned to 2010 levels by 2024. The ranks of senior and higher executive officers and grades 6s and 7s expanded by 62% and 106% respectively between 2016 and 2024.

In 2024, there were more than 100,000 fewer AO/AAs than in 2010 (a decline of 45%) but more officials at every other grade. This is the first year for which this is true – the number of EOs, for example, was still below 2010 levels in 2023 and is now 1.2% higher. Both the senior civil service and senior and higher executive officer ranks have expanded by around 50% since 2010, while the numbers of grades 6s and 7s have expanded by 121%. The result is that the civil service has become significantly more weighted towards the middle and more senior ranks.

The growth of the mid-level grades 6s and 7s has been particularly stark in some departments. While their numbers across the civil service have risen by 121% since 2010, this figure is more than 200% in the Home Office, DHSC, DCMS and DfE. In the Cabinet Office, it is an astonishing 422%.*

2024 saw a boost in civil service pay, though some grades have fared better than others since 2010

Having fallen in both 2022 and 2023, average civil service pay increased in real terms in 2024** after the settlements outlined in the previous chapter. Median pay in 2024 almost returned to its 2010 level, though was still lower than in 2020 and 2021. This pattern broadly matches the private sector, where average pay is less than 1% below 2010 levels, but still below its peak in 2020.

While overall civil service pay is almost back to 2010 levels, this is not true for pay at each grade. Pay restraint through the 2010s meant that the salary at each grade did not keep up with inflation. And as discussed above, the 2023 pay deal (shown in the figure above as pay in 2024) also awarded bigger increases to those at the bottom of the pay scale than those at the top. As a result, pay at AO/AA level was only 8% lower in 2024 than 2010 in real terms, while pay at SCS level was 24% lower.

This has impacted the competitiveness of civil service salaries. In 2011,*** an average grade 6 or 7 salary would have put an official at around the 80th percentile of earners in the whole-economy ‘business administrative professionals’ category (the most comparable data category to civil servants, which includes consultants and economists among other roles).**** By 2024, an average salary was around the 70th percentile in that same category. Relative to comparable outside options, the civil service role would be much less attractive, at least in pay terms, in 2024 than in 2011.*****

A similar story holds at lower grades, although the scale of change is smaller because falls in civil service pay at those levels have been less significant. In 2011, an SEO or HEO average salary would have put a worker at 7% below the median of the business administrative professional category. By 2024 these grades were 14% below the median.

The shift in grade structure means that pay restraint has saved less money than it could have

The calculations above compare pay at the same grade between 2011 and 2024. But it is notable that, while average pay at each grade has fallen in real terms, overall civil service pay is the same as it was in 2010. This is accounted for by the shift towards more medium- and senior-level staff in the grade structure of the civil service, discussed above.

This means that pay restraint over the past 15 years has saved much less than it would otherwise have done. In 2024, spending on civil service pay was approximately £19 billion – the same as in 2010 (in real terms). Had the grade structure remained unchanged since 2010, and pay for each grade had changed by the same amount, spending on pay would have been £1.9bn (10%) lower in 2024.

Pay restraint has contributed to the shift in grade structure

There are two possible causes of these changes in the civil service grade structure.

First, they could have resulted from a necessary or inevitable shift in the structure of the civil service, in part reflecting the automation of administrative roles. There is clear evidence of this in some departments. For example, the most significant reduction in AO/AA numbers between 2010 and 2024 in absolute terms was in DWP, which shed more than 36,000 of those officials – a proportional decrease of 63% against the whole civil service figure of 45%. HMRC’s ranks of AO/AAs also fell substantially, by more than 23,000 (59%) over the same time period. Both have implemented some level of automation – in their welfare and tax policy services respectively – in this time. And, as we referenced in last year’s Whitehall Monitor, automation partially influenced DWP’s decision to phase out the AA grade entirely, and has driven some of the decline in the AO grade.

The second possible cause is ‘grade inflation’: civil servants being promoted more quickly than they otherwise would have been, and roles being advertised at higher levels than previously, in an attempt to recruit and retain the best in an environment of inflation-eroded grade-specific salaries. That the number of employees at higher grades (rather than just the share) has increased so quickly suggests that at least some grade inflation, more than an intentional change in structure, is doing most of the work here. The fact that the largest proportional reductions in AO/AA numbers since 2010 have been seen in the FCDO and HMT (64% and 70% respectively) – departments which would not obviously have large numbers of staff vulnerable to automation – lends further weight to this explanation.

It is not possible to precisely disentangle these two effects, but we can compare changes to pay and roles in the civil service with the private sector. Between 2011 and 2020,****** jobs classified as ‘professional occupations’ increased from 14% to 24% of employees across the economy as a whole, while ‘administrative’ roles fell slightly from 12.6% to 11.2%. While this is not as dramatic a shift as in the civil service – where AOs and AAs fell by a third as a proportion of the workforce, while SEO/HEOs rose by over a third and grades 6s and 7s by more than half******* – the trend is in the same direction.

Pay in the senior civil service continues to be uncompetitive

While grade inflation has helped ease the impact of pay restraint at lower and middle grades, there is much less flexibility for senior civil servants – the lower number of available roles at senior grades means less room for artificial or early promotion. Pay restraint has also been particularly severe for the most senior officials. Median pay for both directors general and permanent secretaries has fallen substantially in real terms since 2014.********

This has increased the pay disparity between the senior civil service and positions of equivalent seniority in the private sector. Between 2011 and 2019, senior civil service pay fell by 10.2% in real terms, while median pay among chief executives and senior officials in the economy as a whole increased by 9.5%.

Senior civil servants are also paid less than their counterparts elsewhere in the public sector. Senior officials at the Treasury are paid much less than their equivalents at the Bank of England and Financial Conduct Authority, for example.

One way the insufficiency of senior officials’ salaries can be shown is that external entrants to the civil service are often offered higher salaries than internal candidates – in part because, while internal candidates have shown a willingness to be paid well below the market rate to do a civil service job, external candidates often have different minimum expectations around pay that need to be met for them to apply for and/or take up a role. The SSRB has reported that “externally recruited SCS are paid on average around £10–20k more than other SCS”. 14 Review Body on Senior Salaries, Forty-Sixth Annual Report on Senior Salaries 2024, Report No. 97, July 2024, https://assets.publishing.service.gov.uk/media/66a7a3c849b9c0597fdb066e/SSRB_Annual_Report_2024_Accessible.pdf

The gender pay disparity is becoming less stark

A more welcome development in civil service pay has been the progressive decline in the gender pay disparity.********* In 2007 the median female civil servant was paid 18% less than the median male civil servant – by 2024, the figure had dropped to 7.5%.

While the pay disparity is lower at all grades in 2024 than it was in 2007, the reduction for the civil service as a whole appears to have been driven primarily by improved female representation at more senior (and better paid) grades. Within grades, in 2024 the disparity ranged from 2.7% for the senior civil service to 0% for staff at the executive officer (EO) grade.

 


* It should be noted that, in some departments, changes in the numbers of officials at different grades will be accounted for by machinery of government changes.

** This represents the impact of the 2023/24 pay award, which was announced in mid-2023 and was relatively generous. The impact of this pay award is seen in the figures for civil service pay in 2024 because the annual civil service statistics publication collects data for 31 March each year. The 2024 statistics therefore collected data on pay for 31 March 2024, reflecting the 2023/24 award.

*** When comparing salaries to the private sector, we start comparisons in 2011 rather than 2010 because the ONS changed its profession classifications in that year.

**** The source for analysis in this paragraph is: Institute for Government analysis of Office for National Statistics, ‘Annual Survey of Hours and Earnings, Earnings and hours worked, occupation by four digit code, Table 14.7a, October 2024, www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/datasets/occupation4digitsoc2010ashetable14

***** Comparisons in this paragraph only focus on headline pay and do not account for bonuses or pension entitlement. Pension entitlement is more generous in the public than private sector, although the civil service scheme has become less attractive since 2010.

****** These years are used for this comparison because the same occupational classification code was used throughout this period.

******* These calculations show grades as a proportion of the civil service workforce whose grade was known at the relevant point, excluding those whose grade was not reported.

******** 2014 is the furthest back that consistent information for both permanent secretary and director general salaries is available in Senior Salary Review Body reports.

********* The figures we use in this section do not represent the gender pay gap, which has a precise definition and which cannot be calculated by civil service grade with the available data. We therefore refer to the ‘gender pay disparity’.

Recruitment

The effectiveness of the civil service depends on the quality of civil servants. But previous Institute research has found that the civil service’s approach to recruitment requires considerable improvement. 15 Urban J and Thomas A, Opening Up: How to strengthen the civil service through external recruitment, Institute for Government, 2022, www.instituteforgovernment.org.uk/publication/civil-service-external-recruitment 16 Urban J, Røren R and Aiyar-Majeed S, Who runs Whitehall? The background, appointment, management and pay of the civil service’s top talent, Institute for Government, 2024, www.instituteforgovernment.org.uk/publication/who-runs-whitehall

This is particularly true of the ‘success profiles’ approach to recruitment, and the widespread use of assessment based on ‘behaviours’, which require candidates to explain how they have demonstrated an abstract concept (such as ‘delivering at pace’ or ‘seeing the big picture’) in a way that earns them marks on a set schema. 17 Cabinet Office, ‘Guidance: Success Profiles’, 14 October 2024, www.gov.uk/government/publications/success-profiles  This system has questionable value to hiring managers and is difficult for external candidates to understand, putting internal candidates (or those with connections in the civil service) at an advantage. Other changes needed include making job adverts clearer, and more formally allowing managers to access information about internal candidates’ previous performance.

More generally, the civil service’s employment offer needs to be modernised. As private companies increasingly market themselves as being places employees can ‘make a difference’, and as flexible working becomes common across the economy – previously potential selling points of a civil service career – the civil service needs to find new ways to stand out from the pack.

Encouragingly, this is a topic in which the Labour government is interested. It was welcome that Pat McFadden’s speech in December (also discussed elsewhere in this report) echoed the Institute’s analysis, as he announced that “it’s time to overhaul how recruitment is carried out across the Civil Service... if you don’t understand the civil service process, good external candidates can find it near impossible to jump through the hoops of ‘behaviours’ and ‘competencies’ and ‘success profiles’”. 18 McFadden P, ‘Reform of the state has to deliver for the people’, speech at University College London, Stratford, 9 December 2024, www.gov.uk/government/speeches/reform-of-the-state-has-to-deliver-for-the-people  There was also a positive commitment to increase the number of secondments into Whitehall – including by expanding the No.10 innovation fellowship, which brings technologists into government, and establishing a new route to bring front-line workers in the wider public sector into the civil service.

Further inspiration for changes to recruitment practices could be found in the government-commissioned Maude Review. Published in late 2023, it produced a series of recommendations about how to improve recruitment, many of which were based on the Institute’s paper Opening Up. 19 Cabinet Office, ‘Independent Review of Governance and Accountability in the Civil Service: The Rt Hon Lord Maude of Horsham’, 13 November 2023, www.gov.uk/government/publications/review-of-governance-and-accountability 20 Urban J and Thomas A, Opening Up: How to strengthen the civil service through external recruitment, Institute for Government, 2022, www.instituteforgovernment.org.uk/publication/civil-service-external-recruitment  Some progress has been made on a small number of the reforms Maude recommended – for example, in 2023 the Conservative government committed to making senior officials’ post-employment restrictions clearer at the point at which they take up a role, although any changes are yet to come into force. 21 Owen J, ‘Civil service terms and conditions to change in lobbying crackdown’, Civil Service World, 21 July 2023, www.civilserviceworld.com/news/article/civil-service-terms-and-conditions-to-change-in-lobbying-crackdown  But in other areas, such as adopting a more robust approach to performance management and strengthening the government’s alumni network, there remains work to do.

Appointing officials ‘by exception’ has caused controversy

Meritocratic recruitment through fair and open competition is fundamental to the civil service and enshrined in the Constitutional Reform and Governance Act 2010. 22 Constitutional Reform and Governance Act 2010, www.legislation.gov.uk/ukpga/2010/25/contents  But sometimes running a full recruitment process is not the best route – for example, in cases where there is a time-sensitive need to recruit someone with particular skills.

In these circumstances, candidates can be appointed ‘by exception’. This bypasses the usual recruitment processes, although in most circumstances appointees can only stay in post for a maximum of two years before either being reappointed through a normal recruitment process or leaving the civil service. 23 Civil Service Commission, Recruitment Principles, April 2018, https://civilservicecommission.independent.gov.uk/wp-content/uploads/2019/03/02a_RECRUITMENT-PRINCIPLES-April-2018-FINAL-.pdf

During its first few months, the Starmer government made some unforced errors by using exceptions to appoint former Labour Party employees and donors to senior civil service roles. Many of these appointments would have been better suited to being brought in as spads or non-partisan policy advisers (pads). 24 White, H., ‘The government’s approach to civil service appointments has been an unforced error’, Institute for Government, 22 August 2024, www.instituteforgovernment.org.uk/comment/civil-service-appointments-unforced-error

A subsequent investigation by the Civil Service Commission found that in the first couple of months of Labour’s term there was actually a reduced number of exceptions granted – the new government was not flooding the civil service with politically aligned appointments. 25 Civil Service Commission, Review into appointments by exception delegated to departments, November 2024, https://civilservicecommission.independent.gov.uk/wp-content/uploads/2024/11/2024-11-20-CSC-delegated-exceptions-review-final.pdf  But it also noted the importance of departments carrying out a rigorous evaluation of an appointment’s propriety.

The exceptions route should be subject to increased ethical safeguards, with more transparency about applicants’ formal political activity. For example, for temporary appointments that need approval from the Civil Service Commission – at director level or above – any history of employment by, or donations to, a political party or explicitly party-aligned organisation should be declared on a candidate’s exception form.

This should be scrutinised properly by departments, the Cabinet Office propriety and constitution team and ideally (with the necessary resourcing) the commission itself. Having a political background should not be a bar to an exception being approved, but knowing about it would help decision makers come to a more informed judgment about whether an exceptional appointment is appropriate.

The proportion of appointments made by exception across the whole civil service tends to be fairly low. There was a substantial increase in 2020/21 – when exceptions reached a third of all appointments, largely because of the pressures of the pandemic – but, after falling back to pre-Covid levels in 2022/23, they are now below them. In 2023/24, the most recent year for which data is available, 93% of people were recruited into the civil service through fair and open competition (91,351), and 7% by exception (6,977). 26 Civil Service Commission, Annual Report and Accounts 2023/24, HC 496, December 2024, https:// civilservicecommission.independent.gov.uk/wp-content/uploads/2024/12/CSC_ARA-2023-24_WEB_ FINAL_061224.pdf

Senior officials increasingly have more relevant experience

It is particularly important that the best candidates are recruited to the most senior jobs in the civil service. One key factor is whether a candidate has relevant experience. Historically, this was something the civil service tended to overlook, with top jobs – especially at permanent secretary level – going to the person ‘next in line’. 27 Paun A, Harris J and Magee I, Permanent secretary appointments and the role of ministers, Institute for Government, 2013, www.instituteforgovernment.org.uk/publication/report/permanent- secretaryappointments-and-role-ministers  But in recent years the situation has noticeably improved. 28 Urban J, Røren R and Aiyar-Majeed S, Who runs Whitehall? The background, appointment, management and pay of the civil service’s top talent, Institute for Government, 2024, www.instituteforgovernment.org.uk/publication/who-runs-whitehall

Currently, 10 of the 16 ‘head of department’ permanent secretaries in ministerial departments have had prior experience in their department (or a forerunner) at director general or second permanent secretary level. Some who have not still have relevant experience – Julie Harrison, for example, was appointed Northern Ireland Office permanent secretary after running two departments in the Northern Ireland civil service; Cat Little moved to become Cabinet Office permanent secretary after working closely with her predecessor, Alex Chisholm, on civil service effectiveness while second permanent secretary at the Treasury.

A bar chart from the Institute for Government showing permanent secretaries’ careers from their first director general level role, 2003-25, where 10 out of 16 head of department permanent secretaries (as of January 2025) had some experience at director general or second perm sec level in the department before they started running it.

Diversity

Today’s civil service is more demographically diverse than ever

Promoting diversity and inclusion has been a priority for civil service leadership in recent years. The Civil Service Diversity and Inclusion Strategy for 2022 to 2025 said that “a truly diverse workforce and culture of openness and inclusivity” act as “a means of delivering better outcomes to the citizens we serve”. 29 Civil Service, Civil Service Diversity and Inclusion Strategy: 2022 to 2025, 24 February 2022, www.gov.uk/government/publications/civil-service-diversity-and-inclusion-strategy-2022-to-2025

As the Institute has argued elsewhere, 30 Bishop M, A crossroads for diversity and inclusion in the civil service: Assessing the 2022 D&I strategy, Institute for Government, 2022, www.instituteforgovernment.org.uk/publication/diversity-inclusion-civil-service  three main arguments can be made as to why increasing diversity in the civil service is important:

  • Talent and performance. Failing to reach into different communities to attract, appoint and retain the best people for the job may become a drag on performance.
  • Diversity of ideas. Attracting people from a variety of backgrounds to the civil service is likely to improve the quality of work by bringing forward new ideas, perspectives and ways of working.
  • Trust and reputation. A civil service that reflects the society it serves is more likely to be trusted by the public.

Over time, the civil service has become more diverse in terms of gender, ethnicity, disability status, sexual orientation, socio-economic background, faith and age, though progress in some areas has been faster than in others.

Three line graphs from the Institute for Government showing the share of female, minority ethnic and disabled staff in the civil service, 2000–24, where the share of female staff is above the population benchmark throughout the entire period, while the share of senior civil servants that are female has only recently reached levels comparable to the economically active population. The share of minority ethnic and disabled staff in the whole civil service has broadly tracked the population benchmark.
A bar chart from the Institute for Government showing the gender of permanent secretaries in ministerial departments, 2005–25, where eight of 16 head of department permanent secretaries were women in January 2025, a higher proportion that at any other time since 2005.

The senior civil service is catching up on female representation

Women make up over half of the civil service (54.5% in 2024), as they have every year since 2001. Women’s representation in the senior civil service (SCS) has continued to increase, reaching 48.2% in 2024, just below the benchmark for the economically active population (48.8%). At all other grades, the proportion of female employees exceeds the population benchmark.

Women’s representation varies by department. Among departmental groups, DWP has the highest overall share of female staff (62.6%), while DHSC has the highest share of female staff in the SCS (56.4%). The MoD ranks lowest on both metrics – only 41.4% of civil servants and 34.9% of senior civil servants are women.

The proportion of permanent secretaries who are women has also steadily risen, though there has not yet been a female cabinet secretary. Of the 16 ministerial departments run by a permanent secretary, half are headed by women.

The civil service has tracked wider society in becoming more ethnically diverse

Ethnic diversity in the civil service has, over time, closely tracked that of the economically active population. The share of minority ethnic civil servants increased from 9.2% in 2010 to 16.6% in 2024, and all minority ethnic groups were better represented, both in absolute terms and proportionally, in the civil service in 2024 than in 2010. The SCS has also more than doubled its proportion of minority ethnic staff from 5% in 2010 to 10.7% in 2024, although it remains below the population benchmark.

Ethnic minority representation also varies by department. In 2024, DESNZ had the highest share of minority ethnic staff, at just over a quarter (25.8%), followed by the Treasury and DHSC (both at 25.4%). The MoD was the least ethnically diverse department (7%).

Disabled representation has improved, but remains below the wider population

Since 2010, the share of civil service staff who report a disability has more than doubled, from 7.6% to 16.9% in 2024. This remains slightly below the UK population benchmark, which has also been on an upward trajectory, reaching 18.1% in 2024.

In 2024, only the share of disabled staff at EO level (19.2%) was above the population benchmark. The SCS was furthest below the population benchmark, with 10.8% of staff identifying as disabled.

This also varies by department. In 2024, only two departments – DWP and the Cabinet Office – surpassed the UK population benchmark in terms of disabled representation. The departments with the lowest share of disabled staff were DfT, at 11.4%, and DCMS, at 11.5%.

A bar chart from the Institute for Government showing disabled staff in the civil service by department, 2024, where the share of disabled staff is above the population benchmark in only two out of 17 departments – DWP and the Cabinet Office.

LGB+ staff are still better represented in the senior ranks than in the civil service as a whole

LGB+* representation in the civil service has been on an upward trajectory, climbing from 3.8% of staff identifying as lesbian, gay, bisexual or other in 2016 (the earliest data available) to 6.9% doing so in 2024. In all years for which robust data is available on the share of the total UK population identifying as LGB+, the civil service has been above the population benchmark.

These figures are higher in the SCS, where 7.1% of staff identify as LGB+, up from 5.3% in 2016. Unlike for disabled staff, employees from a minority ethnic background, or female civil servants, LGB+ civil servants make up a higher proportion of the SCS than of the civil service as a whole – although that gap has narrowed over time.

In 2024, the share of staff identifying as LGB+ was higher in all departments bar the MoD than in the general population (5%, according to the latest available data from the ONS).

Staff from high socio-economic backgrounds dominate the civil service

Extrapolating from data from the annual Civil Service People Survey, we can infer** that a majority of civil servants come from high socio-economic backgrounds. The figure has remained stable over the last few years, at slightly above 50%. About a third of civil servants are from low socio-economic backgrounds. Those from high socio-economic backgrounds make up a plurality of staff at all civil service grades, but the pattern is starker at more senior grades. Over two thirds of the SCS (70% in 2023) come from a high socio-economic background.

Staff with no religion have become the single largest faith group in the civil service

The breakdown of civil servants by faith, belief or religion has changed over the past few years. The most significant change in absolute terms is the increase in the number of civil servants who say they have no religion – from 92,690 in 2019 (20.8% of total staff numbers)*** to 168,870 in 2024 (31.1%). In 2024, ‘no religion’ became the largest single faith category in the civil service, surpassing Christianity for the first time.

Diversity gaps persist in fast stream recruitment

The civil service fast stream is the civil service’s flagship graduate programme. As a future talent pipeline, it is particularly important that it identifies the best people from the population regardless of their background.

Data from 2024 shows that the proportion of successful candidates (those recommended for appointment) who are LGB+ or disabled is higher than the proportion of applicants belonging to these groups. The opposite is true for non-Russell Group candidates (the group for which there is the largest disparity), women, ethnic minorities and those from low socio-economic backgrounds.

The data provides more detail on the success of applicants from different ethnic groups. For example, those who identified as ‘White – British’ were disproportionately likely to be appointed – the proportion of successful applicants belonging to this ethnic category was 13ppts larger than their share of the total applicant pool.

Conversely, the proportion of successful applicants who identified as ‘Black or Black British – African’ was 8.2ppts lower than the proportion of total applicants who did so, making them the ethnic category with the largest (negative) discrepancy between applications and recommendations for appointment.

 


* The Cabinet Office invites civil servants to record their sexual orientation as ‘Heterosexual/straight’, ‘Gay or Lesbian’, ‘Bisexual’ or ‘Other’. Our use of the term LGB+ refers to staff who report belonging to one of the last three groups. The term ‘LGBT+’ is not used because this data refers only to sexual orientation. The civil service records data on gender identity separately.

** See Methodology for details of how socio-economic background data is extracted from the people survey.

*** The figure is calculated as a share of total staff, including those whose faith is unknown (‘not declared’ or ‘not reported’).

Relocation

Between 2019 and 2024, one of the Conservative government’s top priorities for civil service reform was to relocate officials outside of London. This was a welcome focus, with Institute research showing that relocation was beneficial in three main ways:

  • Attracting different types of people into the civil service
  • Allowing different regional voices to influence policy making
  • Providing a modest and localised economic boost in the area in which an office has been established.

A report published by the government in October 2024 evaluated how effective the relocation agenda had been and found that “interview respondents [noted] increased cross-department and cross-profession collaboration and increased pride in place”. 31 Cabinet Office, Places for Growth Formative Evaluation Report, 31 October 2024, www.gov.uk/government/publications/places-for-growth-formative-evaluation-report  But it also found room for improvement. The proportion of senior roles based outside London lagged behind the government’s target; people co-ordinating new or nascent regional offices sometimes do so as a corporate responsibility, with some offices not being given sufficient formal resources to establish themselves; and there is a “free riding” dynamic, with some departments relying “on the overperformance of others to meet collective… targets”. 32 Ibid.

The government has continued to make progress in relocating officials across the country

The relocation efforts of recent years have been driven by targets set in 2019. The government committed to moving 22,000 (FTE) officials outside the capital,* including 50% of UK-based senior civil servants – initially by 2030, with the target then brought forward to 2027. The most recent data, for Q1 2024, showed that 21,002 FTE roles had been relocated – meaning that, accounting for the delays in reporting, the government is likely to have already hit the 22,000 target, six years ahead of the original schedule. 33 Cabinet Office, ‘Places for Growth Data Tables, Q1 2024’, 31 October 2024, www.gov.uk/government/publications/places-for-growth-data-tables-q1-2024

Progress on relocating senior roles has been less impressive. On an FTE basis, the latest data (on this occasion, for Q4 2023) shows that 31.4% of senior civil servants are based outside the capital. 34 Ibid.  Using headcount figures,** the equivalent figure is 36%. This highlights the scale of the remaining challenge, particularly as the roles easiest to relocate are likely to have already been moved.

The latest data shows that, in 2024, growth in civil servant numbers in almost every region (except for the North East) outstripped that in London. 2024 was the second consecutive year in which the number of officials in all but one region grew by more than in London. In 2023 the number in the capital fell by 1%, but the overall growth of the civil service in 2024 meant that an expansion of 2.8% still resulted in London having the second lowest growth.

But progress in relocating civil servants over the last few years must be set in the context of a civil service that became substantially more London-centric between 2010 and 2022. As the civil service contracted between 2010 and 2016, all regions in England saw a deeper proportional decline in staff numbers than London. During the post-Brexit expansion, London bounced back more strongly, and from a higher base.

Overall, this means London remains the region with the highest number of officials, at 106,567. The North West is the second highest, with 70,889. The regions with the fewest civil servants are the East of England, with 23,249 and Northern Ireland, with 4,752.***

The regional distribution of officials also varies substantially depending on the kind of work they do. The policy profession, for example, remains particularly London-centric. Around 60% of all policy-focused civil servants are based in London – a proportion that has trended downwards since 2021, but is still far higher than elsewhere.

There is therefore still progress to be made in reducing the proportion of policy professionals in the capital. Institute research has previously found that the concentration of policy professionals at the Darlington Economic Campus (DEC) and Sheffield Policy Campus has been important in increasing diversity of thought among officials and introducing regional voices into policy making. Encouraging more regional diversity among policy officials would further benefit the civil service’s effectiveness.

The government should learn from where it has been successful so far

As the positive impact of the DEC and the burgeoning influence of the Sheffield campus show, the relocation agenda made meaningful strides over the last parliament. And it can be difficult to shift policy makers outside the capital – some legitimately need to be close to ministers and parliament, while London also has a relatively high proportion of graduates with the skills that policy professionals need.

While the Labour government has not yet set out any detailed policy on relocation, there are signs that ministers may hold similar views to the previous government. In 2022, for example, the Brown Commission on the UK’s Future – a report by the former prime minister Gordon Brown, commissioned by Keir Starmer – recommended expanding the target number of officials to be moved outside London to 50,000. 35 Commission on the UK’s Future, A New Britain: Renewing our Democracy and Rebuilding our Economy, Labour Party, 2022, https://labour.org.uk/wp-content/uploads/2022/12/Commission-on-the-UKs-Future.pdf  In July 2024, the chancellor, Rachel Reeves, visited the DEC and said: “I know how important it is to have government jobs outside of London and the South East.” 36 HM Treasury, ‘Yesterday Chancellor Rachel Reeves visited the Darlington Economic Campus and Leeds’, Facebook, 12 July 2024, www.facebook.com/hmtreasury/videos/yesterday-chancellor-rachel-reeves-visited-the-darlington-economic-campus-and-le/511933071186420/

As the government considers how to take this agenda forward, it should use the success (so far) of the DEC as a blueprint – something also highlighted in the evaluation report published in October 2024. 37 Cabinet Office, Places for Growth Formative Evaluation Report, 31 October 2024, www.gov.uk/government/publications/places-for-growth-formative-evaluation-report  The Institute has found that the DEC holds key lessons for relocation efforts, including that: 38 Urban J, Pope T and Thomas A, Settling In: Lessons from the Darlington Economic Campus for civil service relocation, Institute for Government, 2023, www.instituteforgovernment.org.uk/publication/darlington-civilservice-relocation

  • Ministerial and senior civil service buy-in are essential to success, and for relocated offices to be successful they should host a critical mass of senior roles.
  • There are large potential benefits to co-locating departments in a single office outside Whitehall, with the fresh culture and physical proximity of officials helping to break down traditional departmental barriers.
  • A ‘themed campus’, where roles cluster around a single policy area (economics and trade, in the case of the DEC), helps provide staff with development opportunities in a single location, channels their career paths in a way that encourages the development of subject-specific knowledge, and facilitates cross-departmental work because people’s roles are more relevant to each other.
  • The labour market in the relevant location must meet the civil service’s needs, and Darlington helps demonstrate that this can be the case in well-connected towns.

Our recent analysis of the Sheffield Policy Campus echoed how important these factors are. 39 Metcalfe S, ‘More support would make the Sheffield Policy Campus success truly transformative’, Institute for Government, 22 December 2024, www.instituteforgovernment.org.uk/comment/sheffield-policy-campus  The campus has made the most of its natural advantages – as a long- established civil service centre with a large, suitable labour market and two local universities. But while the campus can point to some clear success stories in which it improved cross-government working, these are isolated cases. The campus would benefit from stronger senior sponsorship, more internal capacity to deliver on its strategic objectives, and – ideally – physical co-location to embed a more consistent culture of cross-departmental working.

 


* The methodology behind this calculation is unclear. A 2023 Public Administration and Constitutional Affairs Committee report suggested that the target was measured by counting the number of new roles created outside London, rather than the number of previously London-based roles that moved outside the capital. See more at: https://publications. parliament.uk/pa/cm5803/cmselect/cmpubadm/793/report.html

** The Institute’s view is that headcount (rather than FTE) is a better measure for assessing progress in relocating officials, as relocation requires moving individual staff members, regardless of their working pattern. All figures in this chapter are calculated from headcount data unless otherwise stated.

*** The Northern Ireland Executive is administered by its own civil service. This number represents all UK civil servants in Northern Ireland, not the total body of civil servants involved in Northern Irish government.

Professions and functions

The vast majority of civil servants belong to one of the government ‘professions’.* These are groupings of officials with particular skills or knowledge, and serve as a means for developing their skills and defining their career pathways.** While an official’s profession does not always loom large in their day-to-day work (civil servants will usually identify far more closely with their immediate team or directorate), they are a useful way of understanding the shape of the civil service in broad terms.

The civil service classifies the professions into four groups: ‘operational delivery’, ‘policy’, ‘functional professions’ (those aligned to, or grouped with, a government ‘function’, discussed below), and ‘specialist professions’. To better understand the nature of the professions, we classify them as follows:

  • Operational delivery
  • Cross-departmental professions
  • Departmental professions.

Officials in the operational delivery profession tend to carry out a very different type of work from the typical image of a ‘Whitehall’ civil servant – these are ‘front-line’ roles that include prison officers and Jobcentre staff. We consider a profession ‘cross-departmental’ if the type of work is necessary in many or all departments (such as policy or digital and data), while ‘departmental’ professions are those that are mostly concentrated in a single department.***

Most civil servants are in front-line roles

Over half of all civil servants are in the operational delivery profession, concentrated in a few large departments. They represent most of the staff in the MoJ, DWP and Home Office (88%, 78% and 77% respectively),**** largely due to the number of prison staff, Jobcentre staff and immigration caseworkers employed by each respectively. Together, just these three departments make up 68% of all operational delivery officials.

A bar chart from the Institute for Government, showing the number of civil servants in different professions, and category of profession, in the civil service in 2024. The operational delivery profession is the largest, with over 270,000 members. Cross-departmental professions make up the next largest category, within which the policy profession is the largest. This is followed by departmental professions, of which tax is the largest. The professions of almost 42,000 officials were not reported.

The policy profession is the largest in our ‘cross-departmental’ grouping and is distributed in similar proportions across all Whitehall departments. There are, however, notably high proportions of the profession in Defra, DESNZ and the FCDO – more than 10% of the profession in each case – particularly given that DESNZ and the FCDO are some of the smallest departments in Whitehall.

The departmental professions are, by their nature, smaller. These are specialisms generally required only in a small number of departments, or in just one. The most concentrated departmental professions are tax, geography, and inspectors of education and training, which have almost 100%, 97% and 93% of their members in HMRC, the MoD and DfE respectively. By contrast, the legal, internal audit and counter fraud professions are the least concentrated. While most of their members are still to be found in single departments (the Attorney General’s Office, HMT and DWP), the rest of their members are spread across several departments.

The expansion of policy and digital and data roles – as well as front-line workers – has boosted civil service numbers since 2016

The growth of the professions sheds more light on how and why the civil service has grown in recent years. Since 2016, the operational delivery profession has added more than 57,000 members – accounting for 46% of the total growth in the civil service. The policy and Government Digital and Data (GDD) professions have seen the second and third highest growth in absolute terms since 2016, adding more than 17,000 and 13,000 officials each.

This looks slightly different on a proportional basis – the growth in the operational delivery profession since 2016 represents an expansion of 27%, for example, while the policy profession has more than doubled in size and the GDD profession has grown by 122%.

A more detailed story can be seen by analysing trends in individual departments. The departments that grew the most in absolute terms between Q2 2016 and Q1 2024**** were the Home Office, MoJ, DWP, Defra, MoD, MHCLG, DfE and the Cabinet Office.
Looking at the professions data for these departments over this period shows how they expanded their workforces.

In half of these departments (HO, MoJ, MoD and MHCLG), operational delivery expanded more than any other profession. While more granular staffing data (and therefore the precise reasons for the expansions) are not available, in the Home Office and MoJ at least this would appear to indicate a response to well-documented pressures on front-line services, from prisons to immigration services. 40 Hoddinott S, Rowland C, Davies N, Darwin K and Nye P, Fixing public services: priorities for the new Labour government, Institute for Government, 2024, www.instituteforgovernment.org.uk/publication/fixing-public-services-labour-government  In the case of MHCLG, the expansion in the operational delivery profession reflects the move of HM Land Registry into the departmental group in 2023. And as discussed below, in the case of the MoD, the expansion is likely to be an artefact of poor data availability.

The policy profession also expanded markedly, particularly in Defra (in large part to assist the post-Brexit functions now administered by the department), MHCLG and the Home Office. In the latter case, this could also reflect the UK government beginning to administer functions previously carried out by the EU, as well as the focus on immigration and asylum policy in recent years. The growth of the policy profession in MHCLG, meanwhile, appears to be explained by the move of teams responsible for the union and devolution from the Cabinet Office to MHCLG. The date of this move coincides with the addition of 580 policy staff between 2021 and 2022.

A series of stacked area charts from the Institute for Government, showing how eight departments have changed in size between 2016 and 2024. For each department, the area in the chart is divided into professions, to show how changing numbers of each profession contributed to the overall change in size of the department. The operational delivery profession has driven the growth of the HO, MoJ and MHCLG. The digital and data and policy professions also grew significantly in a number of departments.

The GDD profession has also contributed significantly to the growth of these departments since 2016, most notably the Cabinet Office, MoJ and MoD. Some trends, meanwhile, are specific to a single department. The counter fraud profession, for example, was established in 2018 and now represents 7% of DWP, the second largest department in Whitehall, with almost 5,700 counter fraud staff in the department.

When analysing these figures it should be borne in mind that the data relies on officials self-reporting their professions in an annual survey. Historically, many have not reported their profession, and the impact of non-reporting can be seen in the data. The increase in the size of the operational delivery profession in the MoD between 2022 and 2023, for example, is likely to be explained by the concurrent fall in the ‘Not reported’ category. The same is true of the expansion of several professions in the Cabinet Office in the same period.*****

An increasing proportion of officials are members of a function, with particular growth in digital and data

While the professions describe groups of officials with particular skills or knowledge, the civil service ‘functions’ are groupings designed to carry out more specialist work in a consistent manner across Whitehall and in arm’s-length bodies. 41 Cabinet Office, ‘Government functions’, updated 24 May 2024, www.gov.uk/government/publications/government-functions/government-functions  Staff in the commercial function will, for instance, carry out procurement activity in the departments in which they are embedded.

Just over 150,000 civil servants (FTE) reported being part of one of the 14 functions in 2024, an increase of 20% since the figures were first reported in 2021. In that time, the GDD function – to which the GDD profession is aligned – has shown the most notable growth, of 105%. As a result of this growth, the GDD function has been the largest for the last two years, before which the project delivery function was the largest. The GDD function now has 27,000 staff, with its biggest presence (14% of the function) in HMRC. At the other end of the spectrum, internal audit is the smallest function, with 600 staff, more than 50% of which are based in the Treasury.

These trends in the professions and functions – particularly the rising numbers of officials working in operational delivery, policy and GDD – demonstrate the changing needs of the civil service in recent years. Projecting the future path of these trends will be an essential element of more robust workforce planning (discussed below). At the same time, strengthening both the professions and functions – helping officials identify more closely with them, and improving the support they provide around training and career development – will help to create a more agile civil service workforce.

 


* Some officials may belong to more than one profession.

** It should be noted that a civil servant’s profession relates to their role, rather than any qualifications they may have.

*** See Methodology for more detail on how we classify professions, and for a full list of professions.

**** These figures represent operational delivery as a proportion of officials whose professions were reported in these departments.

***** While data on civil service staff numbers is available up to Q3 2024, we have chosen this date range for this analysis because data on the civil service professions is only available for Q1 in each year.

****** It should also be noted that in some cases the growth of a profession in a department may be accounted for by a machinery of government change. In these cases, growth in one department will be offset by a corresponding decline in another.

Consultancy and temporary staff spend

Efforts to reduce consultancy and temporary staff spend were derailed by Brexit and the pandemic

The public sector often makes use of both external consultancies and temporary labour, either when capabilities are required that are not available in-house, or to assist in periods of high demand.

Central government is no exception. External consultancies, for example, can bring expertise that the civil service does not or cannot be expected to have in-house – and even help build internal capacity. There are risks, though, and it is important for departments and public bodies to deploy consultancy services strategically and manage contracts effectively from procurement to post-contract evaluation. 42 Rutter J, ‘Does the government know how to get value from consultants?’, Institute for Government, 24 July 2020, www.instituteforgovernment.org.uk/article/comment/does-government-know-how-get-value-consultants  Resorting too often to consultants – especially if contracts are poorly managed – has the potential to fuel a vicious cycle that undermines efforts to build internal capabilities within the civil service. 43 Mazzucato M and Collington R, The Big Con: How the Consulting Industry Weakens our Businesses, Infantilizes our Governments and Warps our Economies, Allen Lane, 2023.  There are also legitimate uses for contingent labour, especially during emergencies such as the pandemic – but, as we have previously argued, 44 Worlidge J, Clyne R, Nye P, Metcalfe S and others, Whitehall Monitor 2024, Institute for Government, 22 January 2024, www.instituteforgovernment.org.uk/publication/whitehall-monitor-2024  temporary staff should not be used to continuously plug gaps generated by poor workforce planning.

Government use of consultants has varied significantly over time. The coalition government strengthened governance processes around the approval of consultancy spend, 45 Cabinet Office, ‘Consultancy and professional services (C&PS) spend control’, updated 1 February 2023, www.gov.uk/guidance/consultancy-spend-controls#full-publication-update-history  and the National Audit Office (NAO) estimated that between 2009/10 and 2014/15 spending on both consultants and temporary staff in the main 17 departments reduced from around £2.7bn to between £1.0 and £1.3bn. 46 Comptroller and Auditor General, Use of consultants and temporary staff, Session 2015–16, HC 603, National Audit Office, 2016, www.nao.org.uk/wp-content/uploads/2016/01/Use-of-consultants-and-temporary-labour.pdf

Consultancy spend started rising again after the EU referendum. Between 2015/16 and 2017/18, expenditure on consultancy services is estimated to have increased threefold, though the exact figures remain disputed. 47 Comptroller and Auditor General, Departments’ use of consultants to support preparations for EU Exit, Session 2017–19, HC 2105, National Audit Office, 2019, www.nao.org.uk/wp-content/uploads/2019/05/Departments-use-of-consultants-to-support-preparations-for-EU-Exit.pdf  Between April 2018 and April 2019, the NAO found that at least £97 million had been spent by departments on Brexit-related consultancy alone. 48 Ibid.  Many of the services provided to central government in this period related to what could be considered to be gaps in civil service capabilities (such as in project and programme management). 49 Ibid.

Spending on both consultancy and temporary labour also increased during the pandemic. Data from departmental annual reports and accounts suggests that central government consultancy spend peaked in 2021/22, at about £1.6bn (2024/25 prices),* with contingent labour spend reaching close to £8.5bn. Most famously, in 2021, Test and Trace was reported to have paid £1m a day to Deloitte consultants. 50 ‘Test and Trace spends £1 million per day on Deloitte consultants’, Consultancy.uk, 2 July 2021, www.consultancy.uk/news/28374/test-and-trace-spends-1-million-per-day-on-deloitte-consultants

Since the pandemic, some steps have been taken to improve how government handles consultancy services. In 2021, the Cabinet Office published the first version of The Consultancy Playbook and established the short-lived Government Consulting Hub. 51 Cabinet Office, The Consultancy Playbook, Version 1.1, 2022, www.gov.uk/government/publications/the-consultancy-playbook: Cabinet Office, ‘Government Consulting Hub’, updated 22 August 2022, www.gov.uk/government/publications/government-consulting-hub  Anecdotal evidence suggests that improved internal governance processes around commissioning consultancy services have led to civil servants thinking more strategically about when – and for what purposes – external consultants might be needed.

The consultancy and professional services spend control introduced by the coalition was discontinued in 2023; 52 Cabinet Office, ‘Consultancy and professional services (C&PS) spend control’, updated 1 February 2023, www.gov.uk/guidance/consultancy-spend-controls  but a contingent labour spend control was introduced in 2022 and remains in force. 53 Cabinet Office, HM Treasury, the Rt Hon John Glen MP, the Rt Hon Jeremy Quin, Contingent Labour Spend Control, updated 1 February 2023, www.gov.uk/government/publications/contingent-labour-spend-control#full-publication-update-history  In November 2024, the Cabinet Office announced the introduction of a new consultancy spend control across government – further discussed below. 54 Cabinet Office, Crown Commercial Service and Georgia Gould MP, ‘New controls across government to curb consultancy send and save over £1.2 billion by 2026’, 14 November 2024, www.gov.uk/government/news/new-controls-across-government-to-curb-consultancy-spend-and-save-over-12-billion-by-2026

Consultancy and temporary labour spend in core departments is still higher than before the pandemic

In 2023/24, consultancy spend stood at £668m** in the 15 core departments for which data was available at the time of writing.*** This was higher than the £638m figure for 2022/23, and substantially exceeds pre-pandemic figures (for instance the £409m spent in 2019/20).**** A similar trend can be observed in relation to temporary staff spend – which reached £1.5bn in 2023/24 (for 16 core departments), more than in 2022/23 (£1.4bn) and far above pre-pandemic levels (£991m in 2019/20).

Despite this, the most recent data shows that some departments have made substantial reductions to their consultancy and temporary staff spend. Most notably, after a striking pandemic-induced real-terms increase of 1,114% in consultancy spend and 3,467% in temporary staff spend in the core department between 2019/20 and 2020/21, DHSC seems to have reached levels of expenditure that are lower than before the pandemic in both areas (£4.0m and £4.3m respectively in 2023/24). Most of this drop is attributable to administrative changes (with, for instance, the Test and Trace programme transferring to UKHSA in 2021). 55 Department of Health and Social Care, DHSC Annual Report and Accounts: 2022 to 2023, January 2024, www.gov.uk/government/publications/dhsc-annual-report-and-accounts-2022-to-2023

Other core departments have also seen downward trajectories in real terms consultancy spend – including the MoD (from £137m in 2022/23 to £83m in 2023/24) – and contingent labour spend – such as HMRC (from £201m in 2022/23 to £156m in 2023/24). But this is not the case for all departments. Consultancy spend increased markedly in DESNZ, for example, from £36m in 2022/23 to £102m in 2023/24.

The Cabinet Office saw the steepest real-terms increase in temporary labour spend of all departments between 2022/23 and 2023/24, from £64m to £95m (an increase of 50%). The department said that the rise was “due to recruitment constraints on filling permanent vacancies”. 56 Cabinet Office, Cabinet Office Annual Report and Accounts: 2023 to 2024, December 2024, https://assets.publishing.service.gov.uk/media/675b14cd6b80200babaa8100/Cabinet_Office_annual_report_and_accounts_2023_to_2024.pdf

Both consultancy and temporary labour spend increased in the Home Office – primarily driven, according to the department’s report and accounts, 57 Home Office, Home Office Annual Report and Accounts: 2023 to 2024, July 2024, https://assets.publishing.service.gov.uk/media/66b249b40808eaf43b50de07/2023-24_Home_Office_Annual_Report_and_Accounts. pdf  by the need for support in dealing with illegal immigration (principally via small boats and including work on the previous government’s Rwanda scheme) and as part of its efforts to reduce violence against women. Consultancy spend increased from £128m in 2022/23 to £239m in 2023/24, and temporary labour spend increased from £265m to £284m. In both cases, the Home Office’s spending in 2023/24 was the highest of the departments for which data is available.

It is also possible to look at departmental groups in their entirety, including not just core departments in Whitehall but also arm’s length bodies like NHS England. Overall consultancy spend has increased in real terms between 2022/23 and 2023/24 in eight of the 16 departmental groups for which we have collected data. Temporary staff spend has increased in six of these departmental groups.

Plans to further reduce consultancy spend are welcome, but more transparency is needed

Last year, the new Labour government signalled its intention to further reduce consultancy spend, following commitments made in opposition. In July, the Treasury said the government would take “immediate action to stop all non-essential government consultancy spend in 2024-25 and halve government spending on consultancy in future years”. 58 HM Treasury, Fixing the foundations: Public spending audit 2024–25, 2 August 2024, www.gov.uk/government/ publications/fixing-the-foundations-public-spending-audit-2024-25/fixing-the-foundations-public-spending-audit-2024-25-html  In 2024/25 alone, this was projected to lead to savings of £550m.

The government has not made explicit how it is measuring consultancy spend, which makes it much more difficult to assess how feasible its goals are. The latest data available from annual departmental reports and accounts suggests that total consultancy spend (encompassing departmental groups rather than just core departments) reached over £1.5bn in 2022/23 (2024/25 prices). The other major source of data on consultancy is invoices for these services published by departments. But the NAO has noted that consultancy spend estimates from the Cabinet Office (based on invoice-level spend) differ substantially from those in departments’ own accounts. 59 Comptroller and Auditor General, Departments’ use of consultants to support preparations for EU Exit, Session 2017–19, HC 2105, National Audit Office, 2019, www.nao.org.uk/wp-content/uploads/2019/05/Departments-use-of-consultants-to-support-preparations-for-EU-Exit.pdf  Depending on which source is used and how consultancy services (as opposed to professional services, for example) are defined, the government’s £550m savings target could account for anywhere between 5% and 40% of total consultancy spend.*****

As discussed in previous Institute research, 60 Paxton B and Davies N, Improving accountability in government procurement, Institute for Government, 2024, www.instituteforgovernment.org.uk/publication/accountability-government-procurement  one of the easiest ways for government to reduce spending on consultancy is to not re-tender when contracts come to an end. Indeed according to data from Tussell – a provider of government procurement data – management consultancy contracts worth about £5.4bn are coming to an end between 2025 and 2028. 61 Ibid.  But it is unclear what proportion of these contracts would be classified by the Cabinet Office or individual departments as ‘consultancy spend’.

In November, the Cabinet Office announced the introduction of new consultancy spend controls to help “save £1.2 billion by 2026, as set out in the Autumn Statement”. 62 Cabinet Office, Crown Commercial Service and Georgia Gould MP, ’New controls across government to curb consultancy send and save over £1.2 billion by 2026’, 14 November 2024, www.gov.uk/government/news/new-controls-across-government-to-curb-consultancy-spend-and-save-over-12-billion-by-2026  The new controls require a permanent secretary’s approval for contracts lasting over three months or worth over £100,000, and ministerial approval for contracts lasting over nine months or worth over £600,000. This is less stringent than the previous spend control.******

The consultancy spend control was accompanied by the announcement of a new framework agreement managed by the Crown Commercial Service (Management Consultancy Framework Four), preparations for which started under the Sunak government. 63 Ibid.; Crown Commercial Service, ‘Management Consultancy Framework Four’, 8 November 2024, retrieved 5 December 2024, www.crowncommercial.gov.uk/agreements/RM6309  This follows a succession of frameworks that aimed to streamline the procurement of consultancy services by providing public sector organisations with a centralised list of approved suppliers offering cost-effective services. The government also announced that the value of the framework had been reduced from the planned £5.7bn over four years to £1.7bn over two years. 64 Cabinet Office, Crown Commercial Service and Georgia Gould MP, ’New controls across government to curb consultancy send and save over £1.2 billion by 2026’, 14 November 2024, www.gov.uk/government/news/new-controls-across-government-to-curb-consultancy-spend-and-save-over-12-billion-by-2026

Taken together, these measures may incentivise civil servants to think more strategically about commissioning consultancy services – though ideally without making the process too cumbersome in cases where external expertise is genuinely needed. In the past, consultancy spend controls have also allowed the Cabinet Office to collect data on how much departments spend on consultants, improving transparency and accountability. The government should ensure that the new spend control does the same.
 


* This figure covers the vast majority, though not the entirety of, central government consultancy spend. It covers 16 departmental groups but excludes a series of smaller organisations, most notably the Wales, Scotland and Northern Ireland Offices. For more details, see Methodology.

** All figures in this section are expressed in 2024/25 prices.

*** These departments are the Cabinet Office, DCMS, Defra, DESNZ, DfE, DfT, DHSC, DSIT, DWP, FCDO, HMRC, HMT, HO, MHCLG, MoD and MoJ. DBT had not published its annual report and accounts at the time of writing. DCMS did not provide figures for consultancy spend in the core department in 2023/24.

**** Because of machinery of government changes, as well as irregularities in reporting by departments, there are minor differences in what these figures for total consultancy and temporary staff spend cover in different years, for both “core” departments and departmental groups.

***** For more details on definitional and methodological issues in calculating consultancy spend, see Methodology.

****** The previous consultancy and professional services spend control required ministerial approval for contracts of over £120,000 or lasting for more than three months and Cabinet Office approval for contracts of over £600,000 or nine months in duration.

Departmental spending

The change in government has led to significant alterations in departments’ spending plans over the next couple of years. And these changes have come alongside a major political row, as the new government accused its predecessor of hiding £22bn of spending demands (a view partially supported by an investigation by the Office for Budget Responsibility). 65 HM Treasury, Fixing the foundations; Public spending audit 2024–25, July 2024, https://assets.publishing.service.gov.uk/media/66ab7c420808eaf43b50dbc2/E03171937_-_Fixing_the_foundations_-_public_spending_audit_2024-24_-_Print_v2… 66 Office for Budget Responsibility, Review of the March 2024 forecast for departmental expenditure limits, 2024, https://obr.uk/review-of-the-march-2024-forecast-for-departmental-expenditure-limits

The new government’s spending plans relieve some pressure after higher-than-expected inflation

One of the key measures of the autumn budget was a large increase in day-to-day spending both this year (2024/25) and next. Relative to pre-election plans, the government increased day-to-day spending by around £20bn in 2024/25 and £40bn in 2025/26. 67 HM Treasury, Autumn Budget 2024, October 2024, https://assets.publishing.service.gov.uk/media/672b98bb40f7da695c921c61/Autumn_Budget_2024_Print.pdf  Rachel Reeves’ cash injection was enough to ensure that almost all departments will see real-terms increases this year, and for many the increases will be large. If the money is spent effectively, this should provide an opportunity for some public services to start to fix some of their most pressing problems. It represents the most generous spending round since 2002.

But compared to what was initially planned at the last spending review in 2021, spending this year is only slightly more generous. The previous government did top up plans in 2022/23 and 2023/24 to partly compensate departments for higher inflation, and in particular the higher cost of pay awards. It did so again for 2024/25, although top-ups this year were much smaller than last. By the time of the general election, plans implied spending would have increased by 2.3% a year on average between 2021/22 and 2024/25, compared with 3.3% initially set out at the 2021 spending review. Reeves’ cash injection means spending will increase slightly faster than originally planned in the 2021 spending review, but only by around £7bn (a 3.8% average annual increase).

The 2021 spending review also came after a period of big cuts in the 2010s. So even after the large increases that Reeves announced, several departments will still have budgets in 2025/26 lower than in 2010/11 in real terms. Even this understates the scale of the 15-year squeeze: the population is expected to be 10.5% larger in 2025/26 than in 2010/11, 68 Office for Budget Responsibility, Economic and Fiscal Outlook, 2024, https://obr.uk/efo/economic-and-fiscal-outlook-october-2024  and demand has increased substantially for most public services. 69 Hoddinott S, Davies N, Pope T, Dellar A and Nye P, Austerity Postponed? The impact of Labour’s first budget on public services, Institute for Government, 2024, www.instituteforgovernment.org.uk/publication/impact-labour-first-budget-public-services

A consecutive line chart from the Institute for Government, with each line showing the change in real terms day-to-day spending for departments between 2010/11 and 2025/26. Almost all departments saw large falls in spending in the 2010s, and have recovered since. But of the 12 departments shown, 6 are still forecast to have lower spending in 2025/26 than 2010/11 in inflation adjusted terms. The largest falls are in FCDO and the MHCLG communities budget.

This poses significant challenges for the next multi-year spending review, which is due to report in June 2025. The total envelope for that review has already been set, and spending is only expected to increase relatively slowly beyond 2025/26, so if those plans are not topped up, the government will need to spend money more effectively to achieve the changes it seeks.

As discussed in the mission-led government chapter of this report, the spending review is also a critical opportunity for the government to set itself up to deliver its five missions by ensuring its spending matches its priorities. Previous spending review processes have not always been well set up to deliver on cross-cutting policy priorities, so the government will need to do things differently, including through setting clear objectives, improving how it uses evidence and negotiating multilaterally across departments. 70 Bartrum O, Paxton B and Clyne R, How to Run the Next Multi-Year Spending Review, Institute for Government, 2024, www.instituteforgovernment.org.uk/publication/how-run-next-multi-year-spending-review

In recent years, departments have required larger in-year top-ups to their budgets

The use of spending reviews to set departmental budgets is only effective if spending does in fact remain within those limits. And in July last year, the government’s accusations about a ‘fiscal black hole’ that the previous government had left brought this issue to the fore.

There was some merit to this accusation: at least some of the additional spending identified was inevitable and should have been reflected in budgets already, in particular additional asylum spending. Other elements of the ‘black hole’ reflected choices that the new government made, but which any government would probably have also had to make. The single largest element of the £22bn total was public sector pay, where the new government accepted pay review body recommendations. Failing to do so would almost certainly have meant more strikes and disruption to public services. As the Office for Budget Responsibility (OBR) acknowledged in its report on information sharing at the time of the March 2024 budget, 71 Office for Budget Responsibility, Review of the March 2024 forecast for departmental expenditure limits, 2024, https://obr.uk/review-of-the-march-2024-forecast-for-departmental-expenditure-limits.  it is possible that the previous government would have found savings in other departments to offset these pressures. But the pressures identified were genuine, and it would have been very difficult for any government to stick to the overall budget without making difficult cuts in other areas.

Departmental spending limits are set by parliament, through the parliamentary estimates process. And it is vanishingly rare that departments overspend the limits voted for them in this way. But that does not mean all departments stick to the limits set out at the start of the year. As set out above, plans can be topped up – as the government also did for the current financial year. This occurs through supplementary estimates, which departments publish in February (as well as the main estimates in May), before the financial year ends in April. This presents a more accurate picture of their spending.*

Historically, the Treasury has been effective at resisting calls for top-ups and keeping spending within the overall budgets voted by parliament. Plans always allow for a central ‘reserve’, usually around 1–2% of total spending, which the Treasury can allocate to departments to deal with one-off spending items, and underspends in other departments can be reallocated. But between 2004/05 and 2017/18, on only four occasions did total departmental spending end up higher than initial plans.

A combined line and bar chart from the Institute for Government, showing how far total departmental spending at the end of each financial year from 2004/05 to 2024/25 deviated from the budget at the start, split into resource and capital budgets. Between 2004/05 and 2017/18, in most years the end of year out-turn was below the start of year budget by a small margin. Since 2018/19, the final out-turn has exceeded budget in all years. The biggest increases were in 2020/21 and the 2024/25 forecast.

That pattern has shifted in recent years. In every year since 2018/19, spending has ended up higher than originally planned at the start of the year. This partly reflects the crises that have buffeted the UK during this period: spending in 2020/21 was understandably much higher than planned due to the ongoing effects of the Covid pandemic, and spending in 2022/23 and 2023/24 in part reflected the need to address the increase in energy prices and additional spending on the war in Ukraine. The exceptional nature of the past few years is also evident when looking at the top-ups that individual departments have received. Of the 14 largest increases in an individual department’s spending relative to its initial budget since 2004/05 (excluding pandemic-related increases), 12 have occurred since 2018/19. The only exceptions are the Foreign and Commonwealth Office’s spending increases in the mid-2000s.

These instances also demonstrate that merely setting tight budgets does not guarantee savings. The 2015 spending review, which ran until 2019/20, proved undeliverable and plans were topped up – for example, to provide the NHS with additional funding during the winter. As outlined above, the 2021 spending review has also been regularly topped up as costs have increased more quickly than expected. Based on the October 2024 budget plans, the latest top-up – the annual uplift in 2024/25 – will be the highest outside the pandemic in the past 20 years.

There are some departments that have repeatedly required top-ups. The Home Office, for example, has had its budget topped up in each of the past four years, reflecting the difficulties it has had forecasting and managing the asylum budget. And the Department for Transport appears on the list in three of the past four years, as public transport travel volumes have not recovered since the pandemic as quickly as projected and the central government subsidy has had to increase to make up the shortfall. This suggests that the budgeting process is not working as well as it could in these departments.


* This is also the process by which departmental spending will be updated to account for the increases announced at the October 2024 budget.

Arm's-length bodies

There have been modest increases in the number, budgets and staffing of arm’s-length bodies

The number of arm’s-length bodies (ALBs) had held reasonably steady since 2017, but in recent years has been increasing: as of March 2024, there were 309 ALBs in total, a slight increase from 305 in March 2023 and 295 in March 2022. This reflects a shift in focus from government – while the number of ALBs fell dramatically in the early 2010s as the government aimed to cut numbers in the so-called ‘bonfire of the quangos’, there seems to have been less of a focus on doing so since 2017.

The increase in the number of ALBs in the past year partially reflects the reclassification of other existing organisations into the more strictly defined category of ALB. But new bodies were also established in 2023/24, such as Great British Nuclear.

The Labour government has continued this emerging trend, and to some extent appears to have turned to ALBs to deliver its missions. The government has promised almost 20 new bodies, including Great British Energy and Great British Railways, 72 Chivukula S and Gill M, ‘Tracker: The proposed new public bodies’, Institute for Government, 21 November 2024, www.instituteforgovernment.org.uk/explainer/public-bodies-tracker  which are now at various stages of being set up.* While the 18 new bodies announced by the end of 2024 appears a high number, when spread over the course of a parliament it would fall within the normal trend of two to 12 public bodies set up per year. 73 Gill M and Bishop M, How To Set Up a Public Body, Institute for Government, 2024, www.instituteforgovernment.org.uk/publication/how-to-set-up-a-public-body.  And some of the new bodies will not add to the total number of ALBs, because they replace or consolidate the functions of others: for example, the new National Infrastructure and Service Transformation Authority is absorbing the National Infrastructure Commission (NIC) and the Infrastructure and Projects Authority (IPA).

New public bodies – some of which will clearly be central to the new government’s agenda – are hard to set up well. In 2024, the Institute published a report on lessons for setting up public bodies; finding that a clear mission, a strong base of support and the right resourcing and governance from the outset are key to success. 73 Gill M and Bishop M, How To Set Up a Public Body, Institute for Government, 2024, www.instituteforgovernment.org.uk/publication/how-to-set-up-a-public-body.

Understanding the arm’s-length bodies landscape is important because over half (almost 60%) of day-to-day government spending is channelled through them.** And over 90% of this (in 2022/23, the latest year for which the Cabinet Office’s ALB data is available) is accounted for by the largest 10 bodies, dominated by NHS England, and followed by the Education and Skills Funding Agency and HMRC. 75 Information given directly by the Cabinet Office in November 2024.

Total ALB budgets increased in real terms from £331.5bn in 2019/20 to £383.6bn in 2022/23 (2024/25 prices) – a rise of around 16%. This increase is largely accounted for by the reclassification of Network Rail, which has a budget of around £20bn, as a non-departmental public body (NDPB), and more funding for the NHS, particularly during the pandemic. Otherwise, funding for ALBs has remained fairly flat in real terms over the past decade (which, notably, includes the period when government absorbed many EU functions).

Recent years have also seen increases in ALB staffing levels. The starkest increase was in NDPBs, which are not formally part of the civil service and are staffed by public servants rather than civil servants. This largest category of the overall ALB workforce rose by 43.7%, or around 45,000 staff, between 2020 and 2023.

This is mostly attributable to the reclassification of Network Rail as an executive NDPB, which added around 41,000 staff. The remainder largely reflects an increase of over 3,000 staff directly employed by NHS England.

The section of the ALB workforce classified as civil servants (62% in 2022/23) has recently grown slightly more slowly than that of the overall civil service. Between 2020 and 2023, executive agency and non-ministerial department workforces grew by 12–13%, compared to growth in the total civil service workforce of 15.5%.***

The new government has an opportunity to rethink the public bodies review programme

The latest programme of public body reviews 76 Parris C, ‘The public bodies review programme’, Institute for Government, 29 November 2023, www.instituteforgovernment.org.uk/explainer/public-bodies-review-programme  was launched in April 2022 to look at the governance, accountability, efficiency and effectiveness of ALBs, 77 Cabinet Office, ‘Guidance on the undertaking of reviews of public bodies’, 25 April 2024, retrieved 5 December 2024, www.gov.uk/government/publications/public-bodies-review-programme/guidance-on-the-undertaking-of-reviews-of-public-bodies  building on previous programmes with similar objectives. The programme is scheduled to run until March 2025. By November 2024, 104 reviews had been launched out of a planned 125, and 71 of these had been completed. 78 Information given directly by the Cabinet Office in November 2024.  This amounted to fewer reviews completed than during the previous programme, but a greater proportion of those scheduled, as the programme was more targeted than its predecessor.

A stacked bar chart from the Institute for Government of the number of public body reviews conducted between 2010 and 2015, showing that the 2022– 25 public body review programme completed a greater proportion of scheduled reviews than the 2016– 20 ‘tailored reviews’, but a smaller proportion than the 2010– 15 ‘triennial reviews’.

The Cabinet Office told us that the 71 completed reviews covered around £14bn in RDEL spending – a small fraction of the £113bn total across all public bodies excluding NHS England. In Whitehall Monitor 2024, we raised concerns that early reviews were tending to focus on smaller, lower-spending bodies. 79 Worlidge J, Clyne R, Nye P, Metcalfe S and others, Whitehall Monitor 2024, Institute for Government, 22 January 2024, p. 22, www.instituteforgovernment.org.uk/publication/whitehall-monitor-2024  Leaving the review of larger, more strategically important bodies to the end of the programme, or excluding them entirely, may have curtailed its impact. It is also unclear whether the reviews changed much beyond the identified efficiency savings.

New Cabinet Office ministers are now determining the ambition and scope of their future work on public bodies. Lessons should be learned from the many previous iterations of the review programme. The most recent iteration, for example, demonstrated the value of having independent lead reviewers, and indeed reviewers external to government in some cases. 80 Cabinet Office, ‘Guidance on the undertaking of Reviews of Public Bodies’, 25 April 2024, retrieved 16 December 2024, www.gov.uk/government/publications/public-bodies-review-programme/guidance-on-the-undertaking-of-reviews-of-public-bodies#people-ministers-principal-…  In addition, there may still be scope to bring the overlap and interactions between bodies, and the role and performance of their sponsorship teams in government departments, into sharper focus, with a view to simplifying the landscape.

Delays in public appointments processes are getting worse

‘Public appointments’ refer to ministerial appointments, usually for a chair or non-executive director for a board of a public body or for a member of an advisory committee, regulated by the commissioner for public appointments. There is a wide variety of public appointments, ranging from board roles for institutions such as the NHS to regional volunteer roles monitoring local prisons. The effectiveness of the public appointments system has implications for the good governance of ALBs and the effectiveness of the functions they carry out.

The Cabinet Office’s governance code on regulated public appointments says that recruitment campaigns should aim to conclude within three months of the advertisement for a role closing. 81 Cabinet Office, Governance Code on Public Appointments, 2024, p. 8, https://assets.publishing.service.gov.uk/media/65c4f9a19c5b7f0012951b7a/governance_code_on_public_appointments.pdf  However, appointments still take too long: the proportion of processes conducted within this time limit fell again in 2022/23, with only 16% of the 322 campaigns run concluding within the three-month period. 82 The Commissioner for Public Appointments, Annual Report 2022/23, Office for the Commissioner for Public Appointments, 2023, p. 6, https://publicappointmentscommissioner.independent.gov.uk/wp-content/uploads/2023/12/OCPA-Annual-Report-2022-23.pdf  This is a deterioration from 25% the previous year, continuing the figure’s fall since its ‘high’ of 50% in 2018/19. 83 Ibid., p. 13. 84 The Commissioner for Public Appointments, Annual Report 2021–22, Office for the Commissioner for Public Appointments, 2022, p. 88, https://publicappointmentscommissioner.independent.gov.uk/wp-content/uploads/2022/12/OCPA-Annual-Report-2021-22-final.pdf

Delays in the public appointments process can lead to gaps on boards, which undermine the governance of ALBs. Long appointment processes can also deter prospective applicants, particularly those from less advantaged groups. They may instead take up private sector posts, where appointment processes seem to compare favourably, depriving government of high-calibre candidates. 85 Comptroller and Auditor General, Non-Executive Appointments, Session 2023–24, HC 513, National Audit Office, 2024, p. 24, www.nao.org.uk/wp-content/uploads/2024/02/non-executive-appointments.pdf

A previous investigation by the commissioner for public appointments in 2019 found that most delays occurred after panel interviews, at the stage when ministers decide who to appoint. 86 The Commissioner for Public Appointments, Thematic Review: Concluding competitions within three months of the closing date, Office for the Commissioner for Public Appointments, 2019, p. 4, https://publicappointmentscommissioner.independent.gov.uk/wp-content/uploads/2019/07/Final-Thematic-Review-The-Three-month-aspiration.pdf  The commissioner for public appointments pointed to the unusual ministerial churn in 2022/23 as a reason for the worsened delays, but it is not possible to quantify what effect this had. 87 The Commissioner for Public Appointments, Annual Report 2022/23, Office for the Commissioner for Public Appointments, 2023, p. 6, https://publicappointmentscommissioner.independent.gov.uk/wp-content/uploads/2023/12/OCPA-Annual-Report-2022-23.pdf  In our 2022 report Reforming Public Appointments, the Institute recommended collecting better data on the causes of delays. 88 Gill M and Dalton G, Reforming Public Appointments, Institute for Government, 2022, www.instituteforgovernment.org.uk/publication/reforming-public-appointments  The Cabinet Office’s new applicant tracking system (ATS) has the potential to do this, but the data collected and published is not yet granular enough to inform improvements.

Improvements to diversity in appointments have mostly stagnated

In most of the measured areas of diversity, not much changed between 2021/22 and 2022/23 (the latest year for which data is available). Appointments and reappointments made to women stayed level, continuing to meet the population benchmark for working-age women, but appointments to candidates from minority ethnic backgrounds fell slightly. The previous government did not meet its ambitions on either of these metrics as laid out in the Cabinet Office’s 2019 Diversity Action Plan – although it was much closer to doing so for women than for minority ethnic appointees. 89 Cabinet Office, Public Appointments Diversity Action Plan 2019, 2017, retrieved 16 December 2024, www.gov.uk/government/publications/public-appointments-diversity-action-plan

The number of appointees living outside London and the South East increased for the first time since data on this characteristic has been collected, from 57.3% to 62.6%. 90 The Commissioner for Public Appointments, Annual Report 2022/23, Office for the Commissioner for Public Appointments, 2023, p. 30, https://publicappointmentscommissioner.independent.gov.uk/wp-content/uploads/2023/12/OCPA-Annual-Report-2022-23.pdf  But the number of appointees who declared a disability dropped from 6.6% in 2020/21 to 4.9% in 2022/23, against a total population benchmark of 16% in the same year. 91 Office for National Statistics, ‘Labour market overview, UK: March 2023’, 14 March 2023, retrieved 16 December 2024, www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/uklabourmarket/march2023  As the figure above shows, this is not a new problem, and post-Covid changes to improve accessibility by facilitating participation in board activities remotely have not yet shown an impact.

There are prospects for further reform of the public appointments system in the new political context

The Sunak government made some welcome changes to the public appointments system that the Institute had previously recommended. 92 Dalton G and Gill M, Public appointments in 2023: what has changed – and what still needs to?, Institute for Government, 7 November 2023, www.instituteforgovernment.org.uk/publication/public-appointments-2023  As well as data being recorded through the new applicant tracking system, the commissioner now regulates the appointment of departmental non-executives, increasing transparency and open competition for these influential roles. But some appointments, including board roles in executive agencies such as the Driver and Vehicle Licensing Agency and the UK Health Security Agency (UKHSA), remain outside the scope of regulation. 93 Ibid.  The government committed to publishing more information about direct ministerial appointments, but has not yet done so. 94 Barr B and Durrant T, ‘The government’s response to the Committee on Standards in Public Life’, Institute for Government, 21 July 2023, www.instituteforgovernment.org.uk/explainer/government-response-standards-public-life

The Labour government must now decide what further reforms to make. It has not yet set out its intentions, or confirmed whether appointments will be included in the scope of the proposed new Ethics and Integrity Commission. Public appointments under the new government have not yet received the criticism levelled at some civil service picks (discussed in the ‘Recruitment’ chapter of this report), but care will be needed to ensure appointments maintain public confidence.

 


* The Sunak government announced some of the bodies now being set up, including the Independent Football Regulator and – albeit with a different remit – Great British Railways.

** Government departments’ total RDEL was £494.2bn in 2022/23, and RDEL spending through ALBs was £294.0bn in the same period (both figures expressed in 2024/25 prices). See HM Treasury, ‘Public spending statistics: July 2023’, GOV.UK, 19 July 2023, www.gov.uk/government/statistics/public-spending-statistics-release-july-2023/public-spending-statistics-july-2023; Cabinet Office, ‘ALBs Budgets’, Cabinet Office, (no date) retrieved 17 December 2024.

*** 15.5% represents the change in the size of the civil service overall between Q1 2020 and Q1 2023.

Artificial intelligence, digital and data

Artificial intelligence (AI) – computer systems that can perform tasks normally requiring human intelligence – has the potential to be transformative for the public sector. 95 Shepley P and Gill M, ‘Artificial intelligence: definitions and implications for public services’, Institute for Government, 27 October 2023, www.instituteforgovernment.org.uk/explainer/artificial-intelligence-public-services  But government is far from realising a vision of large-scale change – ranging from the automation of rote and administrative tasks to the use of new tools to improve policy making or measure public opinion. As things stand, there are fundamental barriers such as a lack of skills in government and the need to fix legacy systems and datasets.

The government needs to find a balance between an ambitious programme of adoption that achieves much-needed productivity gains and a measured approach that avoids unintended harms to the public. 96 Ibid.  In the months and years ahead there will inevitably be peaks and troughs in enthusiasm around AI’s potential – in late 2024, for example, some were talking about the progress of large language models “hitting a wall”, until OpenAI’s o3 model was released in December, representing a substantial leap forward in capability. 97 Wong M, ‘The GPT era is already ending’, The Atlantic, 6 December 2024, www.theatlantic.com/technology/archive/2024/12/openai-o1-reasoning-models/680906  But government must retain a long-term commitment to AI adoption, putting itself in a position to harness the opportunities of potentially game-changing innovations that could come in the next few years, while also mitigating the risks.*

Beyond AI, the government also must not overlook continued improvements in digital and data. Programmes such as OneLogin have provided substantial value and digital transformation efforts must continue. 98 Worlidge J, Clyne R, Nye P, Metcalfe S and others, Whitehall Monitor 2024, Institute for Government, 22 January 2024, p. 22, www.instituteforgovernment.org.uk/publication/whitehall-monitor-2024

Responsibility for digital, data and AI functions in government have been consolidated within DSIT

In July 2024, central leadership of technological transformation in government was placed in the Department for Science, Innovation and Technology (DSIT), in efforts to make the department the ‘digital centre of government’. This involved moving three units previously based in the Cabinet Office: the Government Digital Service (GDS), the Central Digital and Data Office (CDDO) and the Incubator for AI (i.AI). 99 DSIT, ‘DSIT bolstered to better serve the British public through science and technology’, 8 July 2024, www.gov.uk/government/news/dsit-bolstered-to-better-serve-the-british-public-through-science-and-technology  This has since been followed by the formation of a new AI Opportunities Unit in the department, which will implement recommendations from the ‘Action Plan’ commissioned by the secretary of state. 100 DSIT, ‘AI expert to lead action plan to ensure UK reaps the benefits of artificial intelligence’, 26 July 2024, www.gov.uk/government/news/ai-expert-to-lead-action-plan-to-ensure-uk-reaps-the-benefits-of-artificial-intelligence

This is a logical move that could reduce the potential for overlapping functions and confused lines of accountability. It also gives the department with specific technological expertise the opportunity to give standardised guidance and share learning across departments; build frameworks for evaluating and scaling pilots; and have important ethical conversations around AI use.

But building a digital centre of government is more complex than amalgamating teams. The units outlined above must have sufficient authority to co-ordinate and impact cross-government applications of digital, data and AI, and work closely to maximise their impact across Whitehall. It is currently unclear what the scope of the digital centre’s work will be, and this is something that the publication of the successor to the ‘roadmap for digital and data’, 101 Central Digital and Data Office, ‘Roadmap for digital and data 2022 to 2025’, 9 June 2022, www.gov.uk/government/publications/roadmap-for-digital-and-data-2022-to-2025  which ends in 2025, will help clarify.

DSIT itself can sometimes feel slightly peripheral in Whitehall, and this is a perception it will have to fight to be successful at directing a whole-government agenda. On the other hand, there were previously questions about the Cabinet Office’s leverage and commitment to lead on digital, data and AI initiatives, despite its traditional co-ordinating role and status as a central department. 102 Maltby P, ‘Reasons to be optimistic about DSIT and the new digital centre of government’, Medium, 24 July 2024, https://medium.com/@maltbyps/reasons-to-be-optimistic-about-dsit-and-the-new-digital-centre-of-government-f6813b8e8043  Some feel that DSIT will, perhaps counter intuitively, be an improved location from which to drive this agenda.

Leadership will also be important. The success of the Government Digital Service (GDS) in the early 2010s, for example, is often attributed to Francis Maude’s support for it (as well as Mike Bracken’s leadership as executive director). Peter Kyle – the science, innovation and technology secretary – is known to have substantial interest in AI and is willing to invest time and energy into promoting the digital centre of government, which he should continue to do. But, as GDS’s difficulties post-Maude and Bracken indicate, there is a risk to relying on the patronage of a single politician or leadership of a single official. If DSIT is to be an effective digital centre for the long term, this role must be effectively embedded into Whitehall.

DSIT also has a role in promoting technological innovation in the private sector, both in the UK and worldwide. And in the future it could have a larger role with respect to AI regulation – the approach to which is currently diffused across regulators – as home to the AI Safety Institute (AISI) and new Regulatory Innovation Office. It remains to be seen whether incorporating internally facing functions around adoption will complicate DSIT’s external role and lead to tension between its departmental priorities, or whether this juxtaposition could help government align its internal and external strategies, and where applicable learn from the private sector’s approach to adoption.

There has been experimentation with AI use cases, but government needs to address barriers to adoption

In recent years, there have been increasing signs of AI use in government. In January 2024, for example, the CDDO published a Generative AI Framework for civil servants, which encouraged AI experimentation with a set of guiding principles. 103 Central Digital and Data Office, Generative AI Framework for HM Government, 2024, www.gov.uk/government/publications/generative-ai-framework-for-hmg  In July, the new Labour government appointed Matt Clifford, chair of the Advanced Research and Invention Agency, to deliver an AI Opportunities Action Plan, with part of his remit being to drive adoption in the public sector. 104 DSIT, ‘AI expert to lead action plan to ensure UK reaps the benefits of artificial intelligence’, 26 July 2024, www.gov.uk/government/news/ai-expert-to-lead-action-plan-to-ensure-uk-reaps-the-benefits-of-artificial-intelligence  The Number 10 Data Science unit (10DS) and i.AI have trained hundreds of civil servants in technical skills and organised regular hackathons.**

In the autumn of 2023, the NAO found 74 reported use cases of AI across government. 105 Comptroller and Auditor General, Use of Artificial Intelligence in Government, Session 2023–24, HC 612, National Audit Office, 2024, www.nao.org.uk/reports/use-of-artificial-intelligence-in-government  Subsequent developments, including the establishment of i.AI in November 2023 (morphing from its previous incarnation as the Incubator for Automation and Innovation), helped ramp up the government’s adoption of AI, meaning that the true number of use cases is certain to be significantly higher now.

Some of the current AI pilots in the civil service include:

  • GCS Assist – a tool that produces first drafts of communications products, and the first to be approved for use across government
  • Redbox – a tool that extracts and summarises information from ministers’ ‘box work’
    to make it more easily digestible 106 Incubator for Artificial Intelligence, ‘Redbox’, AI.GOV.UK, (no date) accessed 16 December 2024, https://ai.gov.uk/projects/redbox
  • GOV.UK Chat – a public-facing AI chatbot helping people navigate the government’s web pages faster 107 Dub S and Davey J, ‘We’re running a private beta of GOV.UK Chat’, blog, Government Digital Service, 5 November 2024, https://insidegovuk.blog.gov.uk/2024/11/05/were-running-a-private-beta-of-gov-uk-chat
  • Government People Group’s AI tool – built to optimise job descriptions for those
    advertising vacancies
  • Lex – a tool to assist with legislative research and drafting, supported by a database of parliamentary debates, bills, legislation and case law. 108 Incubator for Artificial Intelligence, ‘Lex’, AI.GOV.UK, (no date) accessed 16 December 2024, https://ai.gov.uk/projects/lex

While these examples add to the range of use cases for AI identified in Institute for Government research, evidence from practitioners suggests that adoption has been uneven across departments. 109 Aiyar-Majeed S and Gill M, ‘Whitehall and AI: how can government move from promising pilots to real results?’, Institute for Government, 2 September 2024, www.instituteforgovernment.org.uk/comment/whitehall-ai-government-pilots  In its 2023 report on AI in government, the NAO found that less than a quarter of government bodies it spoke to had an AI strategy. 110 Comptroller and Auditor General, Use of Artificial Intelligence in Government, Session 2023–24, HC 612, National Audit Office, 2024, www.nao.org.uk/reports/use-of-artificial-intelligence-in-government  To address this, senior officials should routinely commission exploratory work into how AI tools could be beneficial for solving priority problems.

Senior officials should also take a leading role in creating a more permissive structure, which gives civil servants positive licence to consider how AI could help their work. Experience suggests that effective innovations can develop relatively quickly from the ‘bottom up’. For example, i.AI’s Redbox was initially conceived and prototyped at a 10DS Evidence House hackathon before being scaled. As well as senior officials, units including 10DS and i.AI have an important role in encouraging an ecosystem where pilots like these can be rapidly tested and the effective ones ideally rolled out further.

Doing so will be challenging. Barriers include ineffective procurement processes and legacy IT systems – issues which typically attract little political interest. There is also little systematic way of evaluating pilots, or sharing what has been tried or deployed across government. These are both issues on which the digital centre of government could lead – with a team or unit given specific responsibility for scaling up successful pilots across government. This could help to address a current gap in decision making and funding, particularly where the benefits of an AI use case may be too diffuse for a single budget holder to make a decision to roll out or procure.

Government must consider how to prepare its workforce for widescale AI adoption

Over time, AI could have a substantial effect on the way civil servants work and the way the workforce is structured. While the impact is currently limited, senior officials need to think seriously (and where practical, engage with trade unions) about the potential consequences for the next decade of workforce planning.

The most substantial near-term impact could be the continued decline of administrative jobs as automated tools become more proficient, particularly at tasks such as answering routine queries and parsing public consultations. While keeping a ‘human in the loop’ – able to oversee and change AI outputs – is vital, and for now AI is likely to be more about augmenting humans than replacing them, in the future, government may need fewer officials to perform its functions. Workforce planning should factor this in, particularly if AI tools gain ‘earned autonomy’ and need less oversight as they demonstrate their repeated effectiveness.

There will be other impacts on the way civil servants work, with AI tools impacting policy makers and communicators as well. Early use cases such as GCS Assist have shown how AI starts to require officials to have new capabilities, and the importance of coupling adoption of AI tools with relevant training. For example, time savings created by using Assist frees up more time for government communicators to spend on collaborative or creative tasks, emphasising the continued need for these skills alongside effective use of AI.

Over the longer term, these effects could be more profound. If, for example, the Tony Blair Institute’s ‘National Policy Twin’ – a digital replica of the real world in which policy scenarios could be modelled, which it suggests would be “used at every stage of the development process for new policy, as well to monitor and iterate existing policies” – was adopted, it would fundamentally change the policy making process and so the skills needed to be an effective policy maker. 111 Iosad A, Railton D and Westgarth T, Governing in the Age of AI, Tony Blair Institute, 2024, retrieved 16 December 2024, https://institute.global/insights/politics-and-governance/governing-in-the-age-of-ai-a-new-model-to-transform-the-state  Part of designing these sorts of tools must involve co-creation with the people who will use them, so they are as useful as possible and not seen as something to work around.

As well as responding to AI’s impact on its workforce, the civil service must grow its capability to both take the associated opportunities and mitigate the risks. The Government Digital and Data (GDD) profession has grown by 88% since 2020, progressing towards the government’s target of the profession constituting 6% of all civil service jobs (in February 2024, the government said it had reached 5.4%).*** 112 Government Digital and Data, Transforming for a Digital Future: Government’s 2022 to 25 roadmap for digital and data, February 2024 progress update, 2024, https://data.parliament.uk/DepositedPapers/Files/DEP2024- 0230/Future.pdf  But more, and more capable, technologists should continue to be recruited – including through industry secondments – to improve the civil service’s capability in this area. 113 Urban J, ‘Getting the basics right to improve civil service productivity’, UKDayOne, 3 July 2024, https://ukdayone.org/briefings/getting-the-basics-right-to-improve-civil-service-productivity#section-1  Doing so effectively will require adjusting the civil service’s approach to recruitment and pay. There have been some encouraging first steps – including approving higher salaries for technologists in the i.AI and the AISI, and skill-based pay increments for some officials in the GDD profession – but change should be more widespread. 114 Institute for Government interview.

In some areas, adapting the civil service’s approach to risk will also be important. Civil servants are right to consider the risks of using AI, but should also reflect on the risks of not using it. In government, AI tools are often held to higher standards than people are and to some extent this is reasonable. The public also hold AI to a higher standard than humans, and whereas humans generally make mistakes in ways that we can understand, we are still at a point in our understanding of AI where it can make mistakes in ways sometimes incomprehensible to us. But as already mentioned, not adopting AI also comes with risks: it can mean providing citizens with a substandard service. 115 Hill J and Eke S, Getting the Machine Learning, Reform, 2024, https://reform.uk/publications/getting-the-machine-learning-scaling-ai-in-public-services  And there are some areas – for example in health care – where citizens are more likely to view the use of AI positively. 116 DSIT, ‘Public attitudes to data and AI: Tracker survey (Wave 3)’, 12 February 2024, retrieved 16 December 2024, www.gov.uk/government/publications/public-attitudes-to-data-and-ai-tracker-survey-wave-3/public-attitudes-to-data-and-ai-tracker-survey-wave-3#prefer…

Part of encouraging officials to be more proactive and confident in using AI tools is providing sufficient training for them to do so. GCS Assist provides a case study of how guidance can be given to staff. The Government Communication Service provides a mandatory ‘AI for communicators’ course on responsible use of generative AI before granting access to Assist, and also provides webinars and ‘teach-ins’ to support its communicators to use the tool effectively. 117 Institute for Government interview.

 


* On 13 January 2025, as this report went to press, the government announced the AI Opportunities Action Plan. The plan sets out the government’s intentions for the use of AI in the public sector, but the plans are not reflected in this section.

** A hackathon is an event where people with similar interests (and typically technological skills) collaborate to solve problems.

*** This 5.4% figure refers to the proportion of officials in the GDD function. The target initially referred to the proportion of officials in the GDD profession, which is lower, at 4.8%.

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