King's College London

Over the weekend, the government announced plans to introduce performance-related pay for senior civil servants. This is not entirely a novel idea – indeed, the previous government announced something similar back in May of 2024 – and governments of various stripes in various countries have tried similar moves over the years.

The move is understandable – there is a sense in government that the civil service is not “match fit”, and that it will therefore struggle to help the government achieve its missions. This, too, is not new. Governments have repeatedly discovered that the service is not as nimble, nor energetic, as they had hoped – albeit this government has been in general kinder in its choice of words to describe the problems.

The crucial question then is whether the changes proposed will actually make their intended differences. A review of all of the studies on public service performance-related pay offers hope for the government – with most studies concluding that performance-related pay has a positive impact, and the stronger studies being even more likely to offer a positive conclusion.

As is so often the case, however, the devil is in the details. 66 of the 68 strong studies in this area are focused on policy domains where there is both a clearly quantifiable benefit, and where the outcome is fairly directly in the gift of the public servants being incentivised – and rarely meaning civil servants in the context of policymaking roles.

Examples of where it does work include tax revenue – where there is a clear outcome (more tax = good), and where tax collection agencies have a fair amount of power over that outcome. Teaching is a more complex domain, but nonetheless has the ingredients for success. Although contested, and education is clearly a multi-faceted process, there is general agreement that better grades are better than worse grades. Teachers also face an uphill struggle against entrenched disadvantage, but all else equal, they make a difference – there is a clear difference between a good teacher and a bad teacher in terms of the grades their students achieve.

For most policymaking, this might be harder to achieve. This is in part because many policy areas do not have clear, quantifiable and unambiguously good outcomes – which makes judging performance tricky. In addition, there isn’t a common outcome across all senior civil servants. The person responsible for border control and the person responsible for adult social care have different roles with very different metrics for success. The government will have to think carefully about what it incentivises, and how.

Even where there are clear policy objectives – like homelessness, where less rough sleeping = good – the extent of direct control held by senior civil servants is perhaps a little less direct than a teacher standing in front of a classroom of students. Big sources of people experiencing homelessness – people leaving prison or foster care – are the responsibility of other government departments (Ministry of Justice and the Department for Education respectively). Actual housing services are delivered by local authorities, over which central government can exercise only limited control. Macroeconomic factors – like whether the economy is in recession – are even more out of the control of central government, despite what the public may blame them for.

Performance-related pay might well be a good idea, but the details will be vital – who is incentivised, and what those incentives are tied to, will be crucial in how this shapes the service going into the future.

Over-incentivise something, or make meeting targets too easy, and ambitious civil servants will flow towards those areas and away from the intractable challenges that you’d really like them to be focused on. Make public service too much about money, and too little about service, and you risk crowding out the public service motivation which inspires people to take a lower salary than they otherwise might in order to serve their countries and communities.

Above all, a flexible, evidence-based and evidence-generating approach to these reforms is our best bet for finding out what works to create and sustain the civil service the country needs.