Cabinet Secretary prepares to retire at end of the year

Cabinet Secretary Sir Gus O’Donnell will be replaced by the Permanent Secretary at No 10, Jeremy Heywood.

Sir Gus, who has been in the role for six years, announced last year that he would step down before the end of this Parliament.

Sir Gus’s retirement will see a reorganisation at the top of the Whitehall bureaucracy, with his role as head of the Home Civil Service being hived off.

The position will go to an existing Permanent Secretary at a Government department who will hold the two posts together.

Mr Heywood will combine the role of Cabinet Secretary with his current job at No 10 to be the most senior policy adviser to the Prime Minister and the Deputy Prime Minister.

David Cameron, who announced the move to Ministers at yesterday morning’s Cabinet paid tribute to Sir Gus as “the outstanding civil servant of his generation”.

“His support during the formation of the coalition Government, and in ensuring the smooth and effective running of Cabinet government since I took office, has been invaluable,” he said.

“He has given dedicated and professional service under five Prime Ministers, the last four of whom he has worked with very closely. I know that they will join me in thanking him for all his hard work, patience, loyalty, good humour and sound judgment.”

Sir Gus, 58, stands down after 32 years as a civil servant. In recognition of his contribution to public life, he has been nominated by the Prime Minister for a life peerage.

A former Treasury economist, he first came to wider attention when he was picked by John Major to be his Press secretary after he became Prime Minister in 1990.

The two men were said to have bonded over a shared love of football while Sir John was Chancellor of the Exchequer.

Sir Gus returned to the Treasury in 1994. His career continued to prosper under Labour and in 2002 he was appointed to the top job in the department as Permanent Secretary.

In 2005 he was made Cabinet Secretary and head of the Home Civil Service.

After last year’s General Election resulted in a hung Parliament, he was credited with playing a key role in setting up the negotiations which led to the creation of Britain’s first coalition Government for 60 years.

However relations with Mr Cameron were said to have cooled earlier this year after the Prime Minister delivered a stinging attack on the “enemies of enterprise” in Whitehall.