Leadership uncertainty is "enormously disruptive" and presents a "big challenge" for the government, a former cabinet secretary has said.
Simon Case, the UK's highest-ranking civil servant from 2020 to 2024, told the BBC's Sunday with Laura Kuenssberg that political upheaval also "costs us money" by driving up borrowing costs.
His comments come after Andy Burnham won Thursday's Makerfield by-election, paving the way for a Labour leadership challenge.
Prime Minister Sir Keir Starmer is now under pressure from cabinet ministers and a growing number of MPs to set out a plan for his departure, and avoid the need for a leadership contest.
Transport Secretary Heidi Alexander and Foreign Secretary Yvette Cooper are both understood to have urged the prime minister to set out a timetable to leave office.
But Sir Keir has insisted he will fight any challenge and will not "walk away" from the job, and spent some of Friday phoning other cabinet ministers to gauge the level of support he has among his top team.
Downing Street said on Saturday night that the prime minister is "focused on getting on with the job" and pointed back to his comments on Friday.
Burnham's allies have urged Sir Keir to reflect over the weekend and listen to his cabinet ministers, MPs and family.
The former Greater Manchester mayor's team - and that of another potential challenger Wes Streeting - had said they would not be giving interviews over the weekend, in an apparent bid to give Sir Keir time to change his mind.
Case served under four prime ministers and was the most senior official in government from September 2020 to December 2024, before stepping down on health grounds.
The cabinet secretary role involves advising the prime minister, implementing government policy, and managing other top civil servants.
Speaking to the BBC, Case said the uncertainty surrounding the prime minister's future is a "big challenge and a big problem for government", adding the markets were already responding to the possibility of a leadership challenge in the UK.
"The amount of money we are paying for the enormous level of debt that the country has are going up with every moment of uncertainty", he said.
Case said that "while politicians are having conversations amongst themselves about who should be leader", time is lost to fix "issues of real significance to people up and down the country in the health service and education".
Changes in leadership also mean important decisions are deferred, Case said, pointing to the recent resignation of Defence Secretary John Healey.
"Current decisions aren't being taken that are desperately needed on how much money we should be spending on defence", Case said.
Asked what his advice to Burnham would be if he were to become leader, Case said: "Do as much preparation as you possibly can, surround yourself with the best people and, by God, do your homework."
He added that Burnham will not resolve the big challenges facing the UK by "coming in and thinking you can govern simply by being a better communicator or somehow vibe coding".
