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Making and Breaking Whitehall Departments: a Guide to Machinery of Government Changes

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Making and Breaking Whitehall Departments: a Guide to Machinery of Government Changes Anne White and Patrick Dunleavy Making and breaking Whitehall departments: a guide to machinery of government changes Report Original citation: White, Anne and Dunleavy, Patrick (2010) Making and breaking Whitehall departments: a guide to machinery of government changes. Institute for Government; LSE Public Policy Group, London, UK. This version available at: http://eprints.lse.ac.uk/27949/ Originally available from LSE Public Policy Group Available in LSE Research Online: May 2010 © 2010 Institute for Government LSE has developed LSE Research Online so that users may access research output of the School. Copyright © and Moral Rights for the papers on this site are retained by the individual authors and/or other copyright owners. Users may download and/or print one copy of any article(s) in LSE Research Online to facilitate their private study or for non-commercial research. You may not engage in further distribution of the material or use it for any profit-making activities or any commercial gain. You may freely distribute the URL (http://eprints.lse.ac.uk) of the LSE Research Online website. The Institute for Government is here to act as a catalyst for better government. The Institute for Government is an independent centre founded in 2008 to help make government more effective. • We carry out research, look into the big governance challenges of the day and find ways to help government improve, re-think and sometimes see things differently. • We offer unique insights and advice from experienced people who know what it’s Making and breaking like to be inside government both in the UK and overseas. • We provide inspirational learning and whitehall dePartMentS development for very senior policy makers. A guide to machinery of government changes We do this through seminars, workshops, talks or interesting connections that invigorate and provide fresh ideas. We are placed where senior members of all parties and the Civil Service can discuss the challenges of making government work, and where they can seek and exchange practical insights from the leading thinkers, practitioners, public servants, academics and opinion formers. Copies of this report are available alongside other research work at: www.instituteforgovernment.org.uk May 2010 © Institute for Government 2010 2 Carlton Gardens London SW1Y 5AA Tel: +44 (0) 20 7747 0400 Fax: +44 (0) 20 7766 0700 Email: [email protected] The Institute is a company limited by guarantee registered in England No. 6480524 Registered Charity No. 1123926 COI REF. 400043/0510 Foreword � The ability of British Prime Ministers to rearrange Whitehall departments serves as a powerful tool to meet existing and emerging policy challenges and one we think should be preserved. Politically, the configuration of departments provides the framework for Cabinet membership and allows a Prime Minister to put a stamp on the building blocks of Whitehall, as well as signal priorities to the electorate. Indeed, it is such an important tool that only one new Prime Minister since 1950 has chosen not to reconfigure departments in some way after assuming the leadership. Machinery of government change, however, can be a very blunt instrument. We researched department reconfigurations from 1979 to 2009 and found that whilst they may bring advantages, the majority of changes were insufficiently planned, announced at very short notice and always involved costs. This report aims to provide some insight into department changes of the past 30 years and we present some in-depth case studies of changes which were deemed to be especially successful by our interviewees. The recommendations we propose do not limit the Prime Minister’s ability to make well-prepared changes to the structure of Whitehall. Instead, our research seeks to help Whitehall minimise the costs of reconfigurations so when Prime Ministers do decide to build and dismantle Whitehall departments, they do so using a more considered and planned approach. I hope we have been able to provide some insight into the changes which Whitehall has experienced in the past 30 years and that we stimulate some debate over how changes could be more effectively managed in future. The overarching objective of the Institute is to inspire the best in government through considered analysis, learning and debate. I hope you find this report a worthy contribution to that mission. Lord Bichard Executive Director, Institute for Government Foreword 3 Contents � About the authors � 6 Acknowledgements � 6 Executive summary � 7 1. Changes in the United Kingdom and other countries 10 � 2. The views and experience of the senior civil service 32 � 3. UK case studies 43 � 4. A deeper case for MoG changes? 76 � 5. Recommendations 81 � Appendices 87-103 � 1. How we researched this report 88 � 2. The change process in Canada 89 � 3. The change process in Australia 90 � 4. The effects of NPM, ICT and agencification on the agility of Whitehall 91 � 5. Acronyms 94 � 6. Bibliography 96 � 7. Endnotes 100 � Contents 5 About the authors � Anne White – Machinery of Government project lead, Institute for Government Anne White was Research Associate at the Institute for Government for the machinery of government changes project. In February 2010, she joined the LSE Public Policy Group. She holds Masters degrees in both Public Policy Administration and Public Affairs from the London School of Economics and Sciences Po, Paris, as well as an undergraduate degree in Honours Business Administration from the Richard Ivey School of Business in London, Canada. Her working experience bridges the private and public sectors. Professor Patrick Dunleavy – Chair of LSE Public Policy Group Patrick Dunleavy is Professor of Political Science and Public Policy at the London School of Economics and Political Science, where he has worked since 1979. He was educated at Corpus Christi College and Nuffield College, Oxford, where he gained his D.Phil. His most recent books are Theories of the Democratic State (2009, with John Dryzek) and Digital Era Governance (2008, Revised edition, with colleagues). Acknowledgements Many people generously contributed time and expertise to this report. We would particularly like to thank the 34 senior civil servants, private sector experts and leading academics in the UK, and also in Canada and Australia, who made the time to be interviewed and share their experiences; without their support, this project would have been impossible. We very much hope that they will find their views fairly reflected in the pages to come. We are especially grateful to Sir Brian Bender, Sir Richard Mottram, Sophie Moullin and Ivan Collister for providing invaluable insight, comment and advice. Almost everyone at the Institute for Government and the LSE Public Policy Group has played some part in making this report a reality, but a few deserve particular thanks. Our colleagues at the Institute, Lord Bichard, Sir Ian Magee, David Halpern, Jill Rutter, Julian McCrae, Simon Parker and Catherine Haddon all made significant analytical contributions. Nadine Smith’s help in finalising the text for publication was truly appreciated. From the LSE Public Policy Group, Jane Tinkler, Leandro Carerra and Simon Bastow made important contributions and were helpful in the drafting and editing process for the report. While we have received a great deal of support from those listed above, the analysis presented in this report is ultimately the responsibility of the Institute for Government alone. Any inaccuracies, errors or omissions are the fault of the authors. 6 About the authors Executive summary � To change the shape of Whitehall – and by extension to alter the trajectory of ministerial careers – at the stroke of a pen is one of the most powerful tools at the disposal of the British Prime Minister. At their best, these machinery of government changes provide a way to adapt government departments to meet long-term policy and administrative goals. Our research shows that the most effective reorganisations over the past 30 years have had these kinds of goals at their heart. But however successful a new department might become, long term governance arrangements are seldom the primary motivation for machinery of government changes. Reconfigurations always provide the opportunity to reorder the Cabinet, reward allies and signal new priorities to the electorate. These potential benefits come at a price: whatever their motivation, machinery of government changes are often announced at very short notice, usually poorly managed and always costly. Where a wholly new department such as the Department for the Environment and Climate Change (DECC) is created, our research shows costs of at least £15m are incurred in the first year just to cover the extra staff and building expenditures required to support a new team of ministers. Productivity losses and pay settlements can increase this figure substantially. We estimate the cost of creating the Department for Environment, Food and Rural Affairs (DEFRA) to be over £30m, and the price of creating the Department for Work and Pensions (DWP) at almost £175m. In some cases, new departments are created only to be abolished within a short period, such as the Department for Innovation, Universities and Skills (DIUS). The current procedures for reorganising Whitehall departments do little to minimise these costs. The common themes that emerged from our 34 interviews with a wide range of senior and former officials included: No time to plan: new departmental structures are often announced by the Prime Minister with little or no prior planning. The transition teams tasked with reorganising or creating entirely new departments were often forced to ‘go live’ with insufficient planning time and with little or no resources in terms of staffing, buildings or equipment. In many cases, departments were created over a weekend, and in the exceptional case of DECC the team was given only one night to prepare. Lack of funding: new departments are allocated insufficient budgets to cover the set-up of corporate overhead functions.
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