# Plan to cut thousands of civil service jobs in radical government shake-up

Exclusive: Proposals also include crackdown on quangos and restructuring NHS England

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A radical blueprint for reforming the state is being drawn up by government officials, including a crackdown on quangos and thousands more civil service job cuts, the Guardian understands.

, with entire teams axed to save money and avoid duplication, could be replicated across a range of arm’s length bodies that spend about £353bn of public money.

Separately, No 10 and the Treasury are understood to be taking a close interest in proposals drawn up by , a thinktank with close links to the government, to reshape the state under plans dubbed “project chainsaw”.

The project’s nickname is a reference to Elon Musk’s stunt  for Donald Trump’s administration.

Keir Starmer told his cabinet at their weekly meeting on Tuesday that they should stop “outsourcing” decisions to regulators and quangos and take more responsibility for their own departments.

The prime minister said they “must go further and faster to reform the state” and reverse what he described as a “trend” under previous government of decisions being made by other bodies.

In a speech on Thursday he will set out plans expected to result in the cutting of thousands more Whitehall jobs than expected, as well as a reorganisation of , including NHS England, which together employ almost 300,000 people.

This could include Homes England, which funds new affordable housing, folding into the Ministry of Housing, giving ministers more direct control over their pledge to build 1.5m new homes over this parliament.

Multiple other quangos could be merged, taken in-house into government departments, or scrapped entirely, government sources have said, although Labour has been criticised for  during its first months in office.

Under the plans, underperforming officials could be given incentives to resign and senior officials would have their pay linked to performance.

The scheme forms part of a wider efficiency drive, with ministers already expected to . Sources suggested that thousands more could eventually be made redundant.

Labour Together said it hopes to channel “ Milei’s energy but with a radical centre-left purpose” with project chainsaw, a reference to the libertarian agenda of the Argentinian president who gifted Musk the chainsaw.

The thinktank will look at more legally risky ways to cut civil service numbers for poor performance, abolishing or merging government departments and further planning reforms, including how to get a third runway built at Heathrow within this parliament.

A spokesperson for Starmer declined to say which bodies the prime minister had been referring to but said he thought the state had become “passive”. He did not respond to questions on whether ministers were planning a “bonfire of the quangos” akin to the 2010-15 reforms by David Cameron and George Osborne.

“The state in Westminster has grown larger but it has not become more effective, and as  said in cabinet we have seen examples over time of government becoming more passive when it comes to decisions,” the spokesperson added.

The number of non-departmental public bodies has been in decline for decades, and standing at just over 300 is down from about 700 in 2010 when Cameron took office. In the 1970s, there were as many as 2,000.

Among the public bodies set up by the government since Labour won the election in July are GB Energy, Skills England, the National Jobs and Careers Service and the Office for Value of Money – though some of these are mergers of existing bodies.

The Institute for Government suggested last weekend that Pat McFadden, the Cabinet Office minister, could consider compulsory redundancy rounds in the civil service. Previously, redundancies have been voluntary or by attrition.

Alex Thomas, from the thinktank, said it would lead to a “mindset shift” among civil servants, saying voluntary schemes and hiring freezes often choked off talent.

The government said on Tuesday that as part of steps to remove red tape for businesses, it would legislate to abolish the Payment Systems Regulator – which oversees operators such as Mastercard – and incorporate its functions into the Financial Conduct Authority.

The decision follows complaints from businesses that they were wasting time and money engaging with three different regulators.

Rachel Reeves, the chancellor, said the “regulatory system has become burdensome to the point of choking off innovation, investment and growth” and that ministers were taking steps to “free businesses from that stranglehold”.

Starmer said that “for too long, the previous government hid behind regulators – deferring decisions and allowing regulations to bloat and block meaningful growth in this country. And it has been working people who pay the price of this stagnation.

“This is the latest step in our efforts to kickstart economic growth, which is the only way we can fundamentally drive-up living standards and get more money in people’s pockets.”
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