Gordon Brown has pledged to cut the senior civil service by 20 per cent as part of wide-ranging public service reform plans launched today.

The prime minister stressed the themes of “personalisation” and user-driven services, telling an audience at London’s Royal Society: “The era of ‘Whitehall knows best' is over.”

The government believes that the efficiencies proposed today, on top of the operational efficiency programme announced at last year’s Budget, will deliver a total of £12bn in savings.

On shrinking the SCS, Brown said: "The senior civil service pay bill will be cut by up to 20 per cent over the next three years to release savings of £100m a year."

"Let me put that in some context: for £100m you could have four new secondary schools or 10 new GP-run health centres - every year." 

Speaking at Civil Service Live North West in Manchester, cabinet secretary Sir Gus O'Donnell said that the process of reducing headcount would be led by individual departments.

"The centre will provide a common methodology but it’ll be department-led," Sir Gus said. "[There will be] help from the centre and experts working with departments to come up with a plan as to how we achieve this over the next three to four years."

He added that the process would being with a department-by-department review of SCS nnumbers and management structures. 

Of today’s announcements, ministers say £1.3bn will be saved specifically on central government activities.

Brown said the streamlining of Whitehall announced in today’s report, entitled 'Putting the Frontline First', represented “some of the most sweeping changes in government in over half a century".

Salary cuts
There were also echoes of Conservative plans to curb public sector salaries, with Brown announcing that all new senior civil service pay packages above £150,000, and bonuses above £50,000, would have to be personally approved by Chief Secretary to the Treasury Liam Byrne.

He added: “Where senior managerial appointments are not directly under government control we will expect the organisations in question to justify to the relevant secretaries of state and to the public any salaries above this level."

Attacking the inflation of top salaries in the wider public sector, including health trusts, Brown said the “culture of excess” had to end and announced a review by senior salary review body chairman Bill Cockburn, to report by next year’s Budget.

And there will be a cull of arms-length bodies – including executive agencies and non-departmental public bodies – with at least 120 abolished or merged to save £500m a year.

Whitehall consultancy spending will also be cut by 50 per cent, and marketing budgets by 25 per cent.

Relocation
Following on from the 2004 Lyons review into relocation, the report announced a new review that would lead to at least 10 per cent of officials in the South East being transferred to less expensive parts of the country.

While Brown said the efficiency drive spearheaded by Sir Peter Gershon earlier this decade had led to 80,000 posts being cut, he declined to say how many jobs might be lost as part of this latest initiative.

"We have got to a position where we have got the smallest civil service since the 1960s,” he said. "So there are further changes to be made – I am not putting a figure on that today."

As well as the reforms to central government, there were significant announcements on public sector data, greater use of the internet to deliver services, and a simplification of the relationship between Whitehall and local agencies.

The government wants a range of services to be moved entirely online, with VAT and employer tax returns to become internet-only by 2011.

“We will set out, service-by-service, how [other] transactions will be moved online,” Brown added, pointing out that online transactions were around £3.30 less expensive than those done by telephone, and £12 cheaper than traditional postal methods.

Public datasets
Brown also promised a new "culture of openness" – an apparent response to Tory proposals to publish far more government information.

"We will actively publish all public services performance data online during 2010, completing the process by 2011.”

Following a review by World Wide Web founder Sir Tim Berners-Lee and academic Nigel Shadbolt, the government also plans increased free access to government datasets.

Asked how the government intended to convince the civil service workforce of some of the more controversial reforms, Brown said he thought many officials would be “excited” by the plans.

But civil service unions have already criticised many of the announcements, with Public and Commercial Services Union (PCS) boss Mark Serwotka accusing the major parties of being involved in a "bidding war” on public sector cuts.

FDA general secretary Jonathan Baume said the proposed 20 per cent cut in the number of senior civil servants was “irresponsible”.

“The new government in May needs first to explain how it intends to curtail the functions of central government. If it does so then staffing levels are likely to fall as a consequence,” Baume said. “But this announcement looks more like crude electioneering than a sober assessment of the implications for central government of the fiscal crisis.”