Whitehall changes are nearly always made for the wrong reason and end up costing money, says a new Institute for Government report
Any incoming government after the general election should avoid the temptation to meddle with Whitehall machinery, a civil service thinktank has warned. An 'after the election' report by the Institute for Government* concludes that successful departmental structuring is "rare".
Far more common is a hasty move by a prime minister needing to soothe a ministerial ego - most famously John Prescott - or signal a policy shift. They are decided in secret and implemented in haste with little thought to the details such as integrating IT systems and civil service pay grades.
In four recent Whitehall restructures, direct costs ranged from £14 million to over £150 million - far higher than originally expected, the report says. It blames the haste with which changes are implemented, saying that half the major changes between 1979 and 2009 were implemented with less than four days to prepare. This time pressure and the "perceived need for secrecy" means that administrative costs are not considered.
Transition expenses that "often exceed expectations" include rebranding "and in many cases considerable costs from IT integration and consultancy support."
The 2008 creation of the Department for Energy and Climate Change is a good illustration. The report quotes a civil servant as recalling: "They had no IT... The first few weeks were really difficult because all the staff were in the wrong place. It was a bit like going back to World War Two. There were messengers coming in with bits of paper because they didn't have IT connected and so on." Creating the department cost £16 million, nearly all within in one year.
Changes implemented in this way tend to be short lived. A classic example was the creation of the Department for Innovation, Universities and Skills in 2007. This "may have allowed [Labour minister] John Denham to join the cabinet, but it was merged into yet another department (the Department of Business, Innovation and Skills) just two years later, leaving little legacy except a multi-million pound bill for the taxpayer."
The lessons are not all negative. One of the most expensive restructurings, the £173 million creation of the Department for Work and Pensions in 2001, has endured and had lasting benefits, the report concludes. This was a "relatively rare" case of a machinery of government change driven more by a bottom-up than top-down logic.
"This reason for restructuring is surprisingly rare in Whitehall," the report notes. It is not the first to suggest that central government draws lessons from local authorities' experiences in service-driven change, citing one stop shops and New York's 311 system.
The institute recommends that:
- The prime minister should pursue restructuring "only after extensive discussions and following production of a business case". This must assess the operational rationale that "changes are rarely a success when undertaken primarily for political signalling or party management purposes". It should also consider alternatives to structural change.
- Both government and opposition parties should promote more considered decision making, including allowing a parliamentary debate and vote on any substantial change.
- The cabinet secretary should develop specific capabilities at the centre of government to advise the prime minister and capture the lessons of changes.
- The next government should strengthen Whitehall's capacity to collaborate, including through the use of cross-departmental goals, budgets and teams.
The authors concede that these proposals may be seen as unrealistic. "Prime ministers will always be attracted by the visibility structural reform provides and secretaries of state and those around them are likely to resist attempts to curb departmental autonomy," the report says.
However when money is tight "there can be no justification for ill-thought-through restructuring initiatives, which cost millions and help no one."
*Strengthening Whitehall's top-level structures and processes, Tom Gash, Institute for Government
Image: Sergeant Tom Robinson RLC, Open Government Licence v.1, through Wikimedia