UK unity faces ‘enormous challenge’

Cabinet Secretary Sir Gus O’Donnell’s warning, on the eve of his retirement at the end of the year, comes 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.”

He 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 wrote in The Daily Telegraph.

Michael Crick: GO'D predicts coalition will last until 2015

In his article, 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”.

He said civil servants had risen to a challenge set out by the prime minister to do away with unnecessary regulations, having recommended scrapping more than half of the 1,200 rules they had looked at so far.

Sir Gus also wrote 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.

Earlier, in an interview for Channel 4 News, Sir Gus disclosed that Whitehall had carried out contingency planning in case the coalition breaks up – although he said he believed it would run its full course to 2015.

“My reading of the coalition, the relationship between the prime minister and the deputy prime minister, is that is probably when the next election will be,” he said.

“You have to do contingency planning, but I think our main scenario is that we go through to 2015.”