A new study by Anne White and Professor Patrick Dunleavy finds that reorganizations of civil service departments in the UK are often announced at short notice, usually poorly managed and are always costly.
The report, 'Making and Breaking Whitehall Departments: A guide to machinery of government changes' was conducted jointly by LSE Public Policy Group and the Institute for Government. It recommends that significant changes should be made so as to make future reorganizations more planned, more open and more carefully considered.
Interviews with 34 top civil servants, private sector experts and leading academics described how decisions made in haste about the shape of Whitehall can lead to up to two years of disruption.
The study, partly funded by LSE's HEIF4 fund for increasing the 'real world' impacts of academic work, recognises that some changes to the machinery of government are necessary, particularly under a new government with new priorities, but it says a more professional and planned approach when doing so would minimise costs and reduce the time it takes to be full effective.
The report finds that the senior civil servants see political motivations as the primary drivers of departmental changes - leading to poor planning and unprofessional change management practices. One interviewee close to several changes in the study said:
'We do it all the time… you get Number 10 ringing up and saying: "The PM wants to keep X person happy. What can we give him to do?" . . . When the question comes, very often you only have half an hour to find the answer. Literally half an hour. Sometimes less.'
The report identifies four recurring problems with how British PMs tend to accomplish changes in central government departments:
Changes are announced at short notice: The transition teams tasked with reorganising or creating entirely new departments were often forced to 'go live' with insufficient time to plan and with little or no resources in terms of staffing, buildings or equipment. The creation of the Department for Energy and Climate Change, for instance, is reported to have been created in just one night.
No funding is provided to cover transitions: New departments are allocated insufficient budgets to cover the set-up or corporate overhead functions. The report agrees with the NAO that wholly new departments cost at least £15m in additional costs and all changes can incur substantial costs due to differential pay settlements and productivity losses. The Department for Work and Pensions, for example, is estimated to cost almost £175m.
Key top staff are overloaded during the transition: Once departments are 'live', top officials and transition teams find themselves with a double workload, running day-to-day operations while also undertaking the strategic planning needed for new or reorganized departments. Most significantly changed departments are reported to require two to three years to refocus and to begin to realise the benefits of the change.
Little central support is given: The Cabinet Office and Treasury do not have the resources to provide effective support to new departments. The report finds that staff tasked to advise and support department changes lack the professional skills, financial and staff resources to do so effectively.
How to ensure department configurations are well-prepared and effective
The report proposes four changes to the process of machinery of government changes to enable politicians and officials to strike a better balance between the political imperative to change department structures and good administration:
1. Changes should be announced early enough to allow effective planning for the transition: Departmental reorganisations should be unlinked from the immediate context of ministerialreshuffle announcements. Departments should not be created until at least four weeks afterthey are announced, giving time for initial preparation and set-up. Any large-scale changesshould not be implemented until after an affirmative parliamentary resolution (point 2 below). The current conventions of maintaining extreme secrecy about prospective changesof department structures should be abandoned.
2. An affirmative parliamentary resolution should be required within six months of a reorganisation: All departmental reconfigurations should require an affirmative parliamentary resolutionwhen transfer of functions orders are laid and before substantial reorganisation workbegins. Parliament should have an opportunity to consider departmental changes in adetailed way before a vote is held, possibly in the Liaison Committee of Select Committeechairs in the House of Commons, or possibly in a joint meeting of relevant departmentalselect committees. The Treasury must bemore realistic in recognising that new and heavily reorganised departments will necessarilyincur extra costs for at least their first year, this should factored intoreorganisation planning.
3. New and radically changed departments should receive more support from the centre: The Cabinet Office and Treasury need to improve their procedures and capabilities toprovide more positive support for new or heavily reorganised departments. The CabinetOffice should create a capacity to provide a 'scratch team' to run a new department'score responsiveness operations for a transition period. TheCabinet Office should recognise that the reorganisation of departments is a vital task thatis likely to recur reasonably frequently, and should henceforth be properly documented andcontinuously improved over time – instead of the current situation where experience resetsto zero in each new case.
4. Post-change assessments: The cost-benefit analysis, business plan and strategic change programme originallysubmitted to Parliament should provide a focus for the relevant departmental selectcommittee to assess the benefits and costs of changes, assisted by staff from the NationalAudit Office, within 18 months to two years. By this time changes should have 'bedded in' and differential pay or productivity dip problems should be evident.
Professor Dunleavy, Chair of LSE's Public Policy Group and co-author, said: 'How Prime Ministers design Whitehall departments is crucial for how well the British state as a whole operates. Current practices are short-termist, secretive and amateurish. We urgently need a more professional, well-studied and carefully evaluated approach - with much better parliamentary scrutiny.'
Lord Bichard, Executive Director of the Institute for Government said: 'The power of British Prime Ministers to rearrange Whitehall departments serves as a powerful tool to meet new and emerging policy challenges. But snap decisions made with little scrutiny, support or time to plan can affect a department's performance for up two years, on top of the huge costs involved. A more professional and considered approach to making changes to Whitehall departments is now essential.'
The full report, Making and Breaking Whitehall Departments: A guide to machinery of government changes, by Anne White and Patrick Dunleavy, can be found on the Institute for Government's website: http://www.instituteforgovernment.org.uk/pdfs/making_and_breaking_whitehall_departments.pdf
For more information on the report or LSE Public Policy Group, please contact Professor Patrick Dunleavy (020 7955 7178) firstname.lastname@example.org or Anne White (020 7852 3762) email@example.com
About the LSE Public Policy Group
LSE Public Policy Group (PPG) is an independent research organisation conducting pure and applied research, and some consultancy, and drawing on academic staff from the London School of Economics and Political Science (LSE). Our key themes focus on public sector management; service improvement and citizen redress; audit and evaluation; 'digital era governance'; and organizational innovation and productivity; and the design of electoral systems and public participation. PPG provides thorough analysis and recommendations for a variety of clients drawn from UK government, overseas and EU governments, leading corporations and 'third' sector bodies.
For more information on IFG's work please contact Nadine Smith on 020 7747 0433 or firstname.lastname@example.org
About the Institute for Government
The Institute is an independent charity with cross party and Whitehall backing working to improve government effectiveness. It undertakes high quality research, primarily focused on the mechanics and processes of government, producing recommendations for change. It provides tailored development opportunities for senior decision makers and their teams to support the delivery of change. The Institute offers consultancy and advice to departments and political parties, leading and shaping opinion on improving performance and effectiveness.