Keeping the UK united ‘is a challenge’

The question of whether the UK stays together would be a major issue in the coming years, said Cabinet Secretary Sir Gus O’Donnell.

His warning, on the eve of his retirement at the end of the year, came as the SNP administration in Scotland is committed to holding a referendum on independence before 2016.

Sir Gus said: “Over the next few years, there will be enormous challenges, such as whether to keep our kingdom united.”

Sir Gus said the Civil Service needed to overcome its “cultural inertia” and take a leading role in driving economic recovery.

“It is not enough now for the Civil Service simply to respond to a dampened economic climate: it needs to become a central part of its recovery and growth,” he added.

Sir Gus also said he believed successive governments had been too quick to address problems with regulation and legislation.

He encouraged Ministers and civil servants to be more creative in solving problems, urging them to take more risks and have a “grown-up approach to failure”.

Sir Gus also spoke of his pride over the “thorough, evidence-based analysis” carried out under the last government, which resulted in Britain staying out of the euro.

“Without that, the challenge would be substantially greater,” he added.