Labour now has the same talking points as the Tories, but fewer ideas

Labour came into office mocking Tory complains about the civil service, but are now coming up against the reality of an unwieldy bureaucracy unresponsive to their demands, says Matthew Lesh

“Dominic Cummings was right“ is not a phrase you would expect to hear from a senior Labour official. But, in less than a few hundred days, the new government has come to a striking realisation: the British state is broken — a complaint Cummings has made for years.

“Too many people in Whitehall are comfortable in the tepid bath of managed decline,” Prime Minister Keir Starmer even declared himself last week. This sharp criticism echoes much of the Tory rhetoric in recent years, including from opposition leader Kemi Badenoch, who made institutional reform a centrepiece of her campaign for the Tory leadership. How strange for the new government to almost immediately accept their primary opponent’s narrative.

It’s quite the turnaround. Labour came into office mocking Tory complaints about the civil service. They thought it would be easy to turn things around since they were not those malevolent and incompetent Tories. Their strategy was to offer a more collegiate attitude to the public sector, including more generous pay rises, hoping that would fix services. Yet, in practice, they have found a vast and unwieldy system that is unresponsive to their demands. Change is hard and the public are already proving impatient.

Technocratic meddling not radical change

The government’s solution, however, is primarily technocratic. Pat McFadden, the minister who leads the Cabinet Office at the centre of government, gave a speech this week highlighting the need for faster decision making and less waste. He called for adopting the ‘start-up’ mindset. This is nothing particularly new or radical. Tory minsters said the same for years. It speaks to a problem (e.g. slowness, lack of innovation) and an outcome (e.g. a new mindset), but provides an insufficient theory about what drives the issues and associated strategy to fix it.

In truth, the public sector cannot be like a start-up: bureaucracies exist to expand and maximise their own power. Unlike a business, they lack the profit incentive to deliver a high-quality service to customers or a competitive environment that fosters innovation. This is why, as much as possible should be left in the hands of the private sector. Something Labor, that has an underlying belief in state power — and is renationalising industry (like the railways) and expanding the state’s role (in clean energy) — struggles to understand.

Others have a more radical analysis.

Cummings’ theory is heavily focused on people. His central claim is that the best and the brightest are no longer entering public service like they did in the past to lead the Empire and are instead going off to do other things. Therefore, we need those weirdos and misfits to shake up the system. This will take a ‘start-up’ political party that wins government with a mandate and plan to replace a multitude of incompetent people in the system.

Unlike a business, they lack the profit incentive to deliver a high-quality service to customers or a competitive environment that fosters innovation. This is why, as much as possible should be left in the hands of the private sector

Bedenoch’s theory is focused on the institutional structure, how a mixture of environmental and equalities red tape with expansive judicial review, unaccountable regulators and a far too ideological civil service has made taking necessary actions to make Britain more prosperous impossible.

There is undoubtedly some truth to both critiques. The public sector needs to attract and incentivise harder work – with pay linked to individual performance and incompetent workers routinely sacked. Meanwhile, the red tape that has led, among much else, to a £100 million HS2 ‘bat shed,’ must be shredded.

The system’s reply to Prime Minister’s speech is quite telling about the difficulties ahead. The civil servants’ union condemned Starmer’s remarks as “insulting,” while one anonymous official threatened to “pull the plug on him.” It seems some in Whitehall have forgotten their fundamental role: to serve democratically elected ministers, not obstruct them with Yes Minister-style sabotage. Radical overhaul will take a fight.

Matthew Lesh is Country Manager at Freshwater Strategy and a Public Policy Fellow at the Institute of Economic Affairs