This is my first time here - so let me make something very clear from the start.
I have huge respect and admiration for the civil service. In my twenties I worked in the Home Office and the Treasury. I saw then just how talented and committed our civil servants are.
And I've seen it again right from the first day of this government.
Yes, I like to think we've given some political leadership - but it's you and your colleagues in the civil service who have delivered.
Just think of what we've done - together - in two months:
The full programme for government.
The National Security Council.
The Office of Budget Responsibility.
The in-year spending review.
The emergency Budget.
The immigration cap.
The abolition of ID cards.
And we've taken the first steps on the long-overdue reform of our schools, our prisons, our welfare system - and of course, our political system too.
These things can't be done by a handful of politicians.
They get done because officials get stuck in.
Whatever your political views, however hard you might have worked on a previous project...
...you always uphold the values of the civil service - integrity, honesty, objectivity, impartiality - and that's what makes our civil service the envy of the world.
So thank you.
Of course, this is just the beginning.We've got some massive challenges ahead - and nothing looms larger than the budget deficit.
Fail to deal with this - and we risk a major crisis in our economy.
That's why we've got to make these cuts.
But let's also be clear how we will make them.
We've got to do this in a way that is responsible and fair - that demonstrates we're all in this together.
That's why we're asking for your help.
We've thrown open the challenge of identifying savings to you - to the whole of the public sector...
...and the response has been fantastic - more than 50,000 ideas in just two weeks.
And tomorrow, the Chancellor and I will be setting out some of the best we've received.
But people are making a big mistake if they think this Government is just about sorting out the deficit.
That's not why I came into politics.
It's not what the coalition came together for.
We came together to change our country for the better in every way.
The best schools open to the poorest children.
A first-class NHS there for everyone.
Streets that are safe, families that are stable, communities that are strong.
These ambitions haven't died because the money is tight.
The real question is: how can we achieve these aims when there is so little money?
How can this circle be squared?
The answer is reform - radical reform.
We need to completely change the way this country is run - and that's what I want to talk about today.
Now I know you've heard talk of reform many times before.
I'm not going to criticise everything the previous government did.
Many of their intentions were right.
Where they went wrong with reform was the techniques they used.
Top-down. Centralising. Above all, bureaucratic.
To improve public services, to get value for money, to deliver their stated aims, they set up a system of bureaucratic accountability.
In this system of bureaucratic accountability almost everything is measured or judged against a set of targets and performance indicators, monitored and inspected centrally.
The evidence shows this hasn't worked.
All the new learning strategies in schools - but the gap in educational achievement between the richest and poorest widened.
All those NHS targets - but cancer survival rates in Britain are among the lowest in Europe.
And worse than these failures is that the very act of imposing this top-down system has undermined the morale and judgment of so many public sector workers...
...the very thing that good public services depend on.
That was the past.
Now we have a new government.
A new coalition government, with a new approach.
We intend to do things differently, very differently.
If I could describe in one line the change we plan for the way we approach public services, and reform generally, it's this:
We want to replace the old system of bureaucratic accountability with a new system of democratic accountability - accountability to the people, not the government machine.
We want to turn government on its head, taking power away from Whitehall and putting it into the hands of people and communities.
We want to give people the power to improve our country and public services, through transparency, local democratic control, competition and choice.
To give you just one example: instead of teachers thinking they have to impress the Department of Education, they have to impress local parents as they have a real choice over where to send their child.
It really is a total change in the way our country is run.
From closed systems to open markets.
From bureaucracy to democracy.
From big government to Big Society.
From politician power to people power.
And let me tell you why, now, this vision is possible.
It's not just that the two parties that make up this coalition believe, instinctively, in giving more power to people.
It's that's where power has shifted to.
Let me explain.
A couple of centuries ago this country was in a pre-bureaucratic age - transport and communication were so slow that information and power had to be held locally.
Then with the invention of the steam engine and the telegraph we moved into the bureaucratic age...
...when it was possible and practical to file the nation's paperwork in one corner of the country - in Whitehall - and that's where all the power has been too.
But today, with the revolution we've had in communications and technology, we can move into the post-bureaucratic age...
...where information and power are held not locally or centrally but personally, by people in their homes.
And the consequences for government - and the way our whole country is run - are incredibly exciting.
It means we can abandon the old bureaucratic levers that we know have failed...
...and instead improve public services and get value for money with new approaches that put power in people's hands.
That what I want to focus on now.
I want to explain these approaches so you understand clearly what this government expects of you...
...and so there can be no doubt about our attitude to reform - and to solving problems.
One way we can bring in real accountability is through choice.
Wherever possible, we want to give people the freedom to choose where they get treated and where they send their child to school - and back that choice up with state money.
Because when people can vote with their feet...
...it's going to force other providers to raise their game - and that's good for everyone.
Another tool we must use is competition.
By bringing in a whole new generation of providers - whether they're from the private sector, or community organisations, or social enterprises - we can bring in the dynamic of competition to make our public services better.
That's what we plan in education.
We will let any suitably qualified organization to set up a school...
...creating real diversity and real competition so there's real pressure to raise standards.
Payment by results
Of course there are some areas where competition and choice aren't possible.
We understand that.
So we'll do the next best thing - and introduce the principle of paying providers by the results they achieve.
Rewarding people for work well done is a simple way of driving up standards.
There are some people who say we can't do this - that it's against the spirit of public services.
I say: we can't afford not to do this.
You wouldn't have a plumber round to your house and pay them for ruining your drains.
Why should public services be any different?
So we'll pay welfare-to-work providers not just by how many they get into work but how many stay in work.
And we're going to pay independent providers - and eventually prisons - by the levels of re-offending.
Sometimes it won't be possible to have choice, or competition, or to pay by results.
But that doesn't mean we have to give up on bringing in people power.
Here, we should have direct democracy.
That's what we're doing with policing.
Instead of having chief constables answer to Whitehall, we will make them answer to police commissioners with a mandate to set local policing priorities.
That mandate will have been earned through election - and those priorities will have been developed with the consent of local people.
So police will stop looking to Whitehall for direction and start looking to people.
And whatever the circumstance, there is one tool that we will always try to use - and that is transparency.
We're shining a light on everything government does...
...not just the pay, the perks and where public money is spent...
...but on how well that money is spent, too - on health outcomes, school results, crime figures.
That way people can see the value they're getting for their money and hold us to account for it.
I know there are some people who think this is unfair.
I'm sorry, I just don't agree.
We are the servants of the people of this country.
They are the boss.
Where is it said that the boss is told they can't look at the books or know the pay of their staff?
It doesn't happen in the private sector and from now on it won't happen in the public sector.
More for less
All these different approaches are designed to put people in charge and give us services that are more local, more responsive and more effective.
And there's another big, important by-product of these reforms.
They're going to help us save money.
Not just because we can scrap the whole expensive apparatus of top-down bureaucracy and inspection.
But because when people have the power to hold public services to account, they'll help make sure they're less wasteful and more effective.
When social enterprises and charities have the power to compete in the public sector, that will increase competition, drive costs down and put pressure on existing providers to raise their game.
And when these providers are paid by the results they achieve, we can get value for money.
Arguments against reform
But I know there are people who questions our plans for reform.
They say it will be the poorest who lose out when you increase choice.
They say it will create wider gaps between communities, with some getting left behind.
They say when you increase competition some organisations will fail - and that will disadvantage the people who use them.
I'm going to be taking on all these arguments in the weeks ahead.
But on the fairness point - because it's so important - let me say this briefly today.
The old top-down system failed the poorest.
It widened inequality.
In a system where people have no choice, it's the richest who can opt out while the poorest have to take what they're given.
And just consider the evidence of the most recent years, in those areas where principles of competition, choice and greater independence for institutions have been introduced.
Academies are transforming education results in our poorest communities.
Some foundation hospitals are bringing the very best care to the people who need it most.
More independence, more freedom, more openness - and standards are raised across the board - improving life for the most vulnerable and disadvantaged as well as for the better off
That's why we are so determined to press on, go further and go faster in bringing about a real people power revolution.
Structural Reform plans
So what part will all you have to play in making this change happen?
Going from bureaucratic accountability to democratic accountability will require radical reform.
I need your help to make these reforms happen.
But let me be very clear: I do not want you and your colleagues to think your role is to guarantee the outcomes we want to see in our public services - or to directly intervene in organisations to try and improve their performance.
It's our job - we as politicians, you as civil servants - to create the conditions in which performance will improve, by making sure professionals answer to the public.
And today, we're announcing how we want to keep those reforms on track.
Starting with schools and local government, we will be publishing Structural Reform Plans for every Whitehall Department.
They will be part of the full departmental business plans published after the Spending Review.
And I want to be very clear about how they are different from the old top-down system you are used to.
They're different because in these plans you will not find targets - but specific deadlines for specific action.
Not what we hope to achieve - but the actions we will take.
They will show how each department plans to bring democratic accountability - how they will create the structures that put people in charge, not politicians.
I want you to read these reform plans and work with them.
They mean a real culture shift for you, a sea change in what you do.
Where there has been caution about devolving power there's got to be trust.
Where there has been an aversion to risk, there needs to be boldness.
I'm telling you today that your job under this government is not to frustrate local people and local ideas, it is to enable them.
Everything I have spoken about today - the ideas that lead the reform, the plans that shape it, the deadlines that will drive it - these things do not guarantee success.
A lot of the ideas, the impetus needs to come from you.
I hope I've left you with a very clear idea of what we want to achieve.
You need to know, instinctively, what will get a green light or a red light from me.
If you want to make our public services more transparent, open them up to make them more diverse, to give people more power and control - you can be confident it will get the green light.
But if you want to set targets, set new controls, impose new rules, don't bother because you're likely to get the red light.
This government believes you get value for money by opening services to choice and competition...
...by trusting professionals and restoring their discretion...
...by publishing in full all the information.
This government believes in accountability: but it has to be democratic accountability, not bureaucratic accountability.
Be in no doubt about our determination to do this.
Yes, we'll deal with the deficit - but we'll also completely change the way our country is run.
So let's push power out, let's reform our public services, and let's change our country for the better.
Let's bring on the people power revolution.