Civil servants should be paid more to attract the best talent to Whitehall and the outdated process of appointments is too easily “gamed”, according to research by a leading think tank.

Analysis by the Institute for Government (IFG) of 148 senior roles across the 19 main government departments also found many officials lacked “valuable” experience of work outside the Civil Service.

The analysis showed 52 per cent of senior officials attended Oxford or Cambridge universities in some capacity, including 74 per cent of permanent secretaries.

The IFG added that the high proportion of top officials who were Oxbridge educated could be due to candidates being prized for “their credentials and stylised behaviours”, rather than their achievements.

The report, Who Runs Whitehall? The Background, Appointment, Management And Pay Of The Civil Service’s Top Talent, said the real-terms salary decreases across the Civil Service over more than a decade were “particularly acute” at the most senior levels.

Average pay for both director generals and permanent secretaries was found to have fallen in real terms by approximately £35,000 and £40,000 respectively.

The analysis described the difference between pay at senior levels of the Civil Service and the wider economy as “extreme”, with average permanent secretary earnings some 10% of the average wage of a FTSE 250 chief executive.

In addition, other leaders in the public sector were found to be better paid than top civil servants.

The average director general’s annual pay in 2023 was £138,500, while pay for comparable roles in sectors such as local government and the NHS ranged from £185,000 to £395,000.

The report said “excessively low pay” disincentivised “top talent from coming into government” and the Civil Service had “fallen too far behind both the private and rest of the public sector to attract the talent it needs”.

The call for improved pay for senior civil servants comes after Prime Minister Rishi Sunak vowed to cut 70,000 Civil Service jobs to help fund an increase in defence spending to 2.5% of gross domestic product.

The report also called for the appointments process for Civil Service roles to be modernised as “a cautious and outdated notion of what fair, open and meritocratic recruitment means” did not always lead to the best candidates being hired for senior roles.

The IFG is critical of a “traditional” recruitment model used by the Civil Service which was described as “someone has a bunch of scripted questions, someone has a bunch of scripted answers … there’s no actual exchange of information”.

“Traditionally, the Civil Service has been wary of more informal processes, but the current rigid process is easily gamed and less effective than it should be,” the report added.

Meanwhile, the analysis found that less than a quarter of permanent secretaries and director generals had a degree in STEM (science, technology, engineering or mathematics) subjects.

This compared to 44 per cent of all UK graduates.

But, excluding scientific advisers who would be expected to be qualified in STEM subjects, the IFG found some five officials who had studied such a subject at postgraduate level, highlighting that the educational background “skews” to humanities and was “narrow”.

The report said this contributed to senior officials feeling more comfortable in jobs where literacy was the key skill rather than numeracy, leading to a failure to grasp the “importance and potential of data and quantitative methods” to inform judgments on whether evidence was robust.

“It should be prized” that many civil servants attended two of the best universities in the world, the IFG said.

“But this may become problematic if it reflects an internal culture that values candidates having been at Oxbridge more highly because of their credentials or behaviours, rather than their skills or achievements,” it added.