Innovating through machinery of
government changes
Looking at the drivers, costs, process and outcomes of changes
to government departments and arms-length bodies.
1
IFG/LSE Joint Report
•
43 departments were affected by
mergers and demerges from 1979-2009
•
Over 30 in-depth interviews
• 23 UK current and former senior civil servants
• 7 private sector experts
• 3 Canadian former and current senior civil
servants
• 1 Australian civil servant
• 1 UK politician
2
Five key findings
1 Department changes are costly.
2
The final driving factor to change is
usually political.
There is little to no planning done by
3
politicians in advance of the change.
Transition team officials have insufficient
time to prepare before effecting the
4
changes.
Departments need more support during
5
changes.
Restructuring costs are at least £15-£20m
and can be substantially more where pay
differentials are great.
Administrative and policy rationales may be
present but political factors usually act as
the tipping point to change.
The Cabinet Office has insufficient time, skills
and resources to properly advise on changes.
Most teams given 0-4 days to effectuate
change.
Cabinet Office support is largely with budget
arbitration.
3
1. Department changes are costly…
£15,687,500
£15,289,600
31,041,700
£173,374,300
5%
19%
89%
91%
First Year
48%
81%
32%
Recurring
Indirect
% of
Administrative
Budget
14%
11%
9%
DECC
DIUS
Defra
20%
22%
18%
DWP
3%
Costs based on interviews with senior civil servants, Department annual reports and documentation of change, Civil Service Statistics and Select Committee Hearing Minutes.
… with differential pay affecting departments
for years to come.
Costs of DEFRA as calculated at the end of it’s first year.
10,000,000
31,041,700
Indirect
Total
“The one thing that dogged us for about
6 months was differential pay.
MAFF was in the bottom quartile in
Whitehall paylink and DETR, because they
had the money and frankly because they
had made some poor decisions with the
trade unions, were in the top quartile –
put those two together and you get an
industrial dispute.”
15,000,000
Former Senior Civil Servant, Defra
6,041,700
Accommodation
HR Systems Integration
IT Investment
IT integration
Differential Pay Settlement
Productivity
% of Administrative
Budget
First Year
Recurring
4%
9%
6%
18%
5
Costs based on interviews with senior civil servants, Department annual reports and documentation of change, Civil Service Statistics and Select Committee Hearing Minutes.
2. The main driving factor is politics…
Drivers of MoG Changes as cited by senior civil servants (% of MoG changes,1980-2008)
Job creation/empire-building
Policy
39%
23%
“The most common circumstance is the
process of cabinet making.
Most of the biggest changes in the last48%
10 Politics
years with exception of MoJ have been as
a result of meeting the needs of
colleagues for a job.”
Senior Civil Servant, CO
29%
Cabinet formation
18%
PM interest
18%
Minister Departure
12%
Signalling
10%
Delivery
Media Reporting
Stakeholder Pressure
4%
Results based on codification of 18 senior civil servants involved in department level machinery of government changes between 1979-2009.
… even though many changes also have
policy or delivery rationales.
Department for Education and Employment
Department for International Development
“Personalities came into it in
a big way but the argument
for the new division was
delayed by personalities for
some time and that was
overcome and with some
hardship to individuals but it
was much more a policy
change.”
Department for Culture, Media and Sport
Department for the Environment, Transport and the…
Department for Communities and Local Government
Department for Transport, Local government and the…
Department for Business, Enterprise and Regulatory Affairs
Department of Health
Department for Transport
Former Cabinet Secretary
discussing MoJ
Department for Constitutional Affairs
Department for Innovation, Universities and Skills
Department for National Heritage
Department for Children, Schools and Families
Department for Social Security
Department for Energy and Climate Change
Department for Work and Pensions
Office of the Deputy Prime Minister
Department for the Environment, Food and Rural Affairs
Ministry of Justice
0
Delivery
Policy
5
10 theme15
No. of times
is cited
Politics
20
25
30
7
3. There is limited to no planning in
advance of department changes
Top issues cited by senior civil servants (% of MoG changes,1979-2009,in which issue was raised)
Resistance to change
81%
No Planning/Shock
62%
Home loyalties
43%
Cultural Challenges
38%
Staff Morale
38%
Anger
29%
Superficial planning
29%
Delivery Risk
29%
No Support
29%
Disruption
“[X] had already been asked to be SoS
for that Department. He was in the
car half way down Victoria Street [en
route] to his department when he
was called back and told:
‘Actually we’ve changed our mind.
You’ve got [Department A] and
[person Y] wants [Department B]…’
[Y] wanted [B]...So they just put it
together. There was no examination
of any kind at all. It was just done.
And most MoG changes are just like
that”.
Senior Civil Servant, CO
24%
Results based on codification of 18 senior civil servants involved in department level machinery of government changes between 1979-2009.
8
4. Transition teams have
insufficient time to prepare.
Senior civil servant recollections of MoG change process (% of MoG changes,1979-2009)
10
7
3
40%
57%
67%
10%
50%
43%
33%
0-4 days
“I don’t see why you couldn’t have
had more planning around DECC. It
didn’t have to be done over night
and it might have just helped the
birth pains of the brand new
Department. They had no IT... The
first few weeks were really difficult
because all the staff were in the
wrong place. The ministers were in
a [different] building...
I know somebody who went to see
[the Minister] and said it was a bit
like going back to WWII. There
were messengers coming in with
bits of paper because they didn’t
have IT connected and so on. If
they had been given a month
instead....” Former Senior Civil
Servant, BERR
1 week
> 10 days
Merger
Demerger
New
Preparation Time: Time given to Senior Civil Service and Transition Teams to prepare Department for change in advance of first day of business.
Time Required to Refocus Department: Time taken to configure Department business processes, culture and systems toward new change mandate.
Results based on codification of 18 senior civil servants involved in department level machinery of government changes between 1979-2009.
9
5. Making changes better requires greater
central support.
Top themes cited by senior civil servants which would ease the process of MoG changes.
Clear guidelines
“I have not found the
Cabinet Office helpful in
any machinery of
government change I
have been involved in.
[Department X] or
[Department Y] or when
[Department Z] was
created. Ultimately, it
came down to sorting
that for ourselves.”
39%
7
Central capacity in org. planning
33%
6
Differential pay easing
33%
6
IT - common platforms
33%
6
Central support re shared services
28%
5
Support with resource transfers
28%
5
Former Senior Civil Servant,
Defra
Annouce earlier
22%
4
10
Results based on codification of 18 senior civil servants involved in department level machinery of government changes between 1979-2009.
4 recommendations for better MoG changes
1 month prior:
Announce
changes and
begin planning
 Unlink from
reshuffles and
announce 1
month creation.
 SoS, PS and CO
prepare
business plans
for change
1 month prior to
2 months post:
Support from
the centre
6 months post:
Affirmative
resolution on
change
 CO provides a
scratch team to
set-up interim
HR, facilitate IT
and finance
systems
changes.
 Affirmative
parliamentary
resolution
before
substantial
change work
begins
 CO provides
organisational
change
expertise
 Business plans
including costs
of the change
available in
advance of the
debate
18-24 months
post:
Post-change
assessment
 Department
Select
Committees and
NAO audit the
change against
the original
business plans
18-24 months
post-change.
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FOR DISCUSSION:
CHANGES BY THE CURRENT ADMINISTRATION
12
High impact/low profile changes so far
New
Office of the Deputy
Prime Minister
Office of the Deputy
Prime Minister
Office for Civil Society
Office for Civil Society
Who
Title
Responsibilities
Political/const.
reform
Department(s)
Nick Clegg
Deputy Prime
Minister
Norman Lamb
Chief Parliamentary
and Political Advisor Coalition
to the DPM
management
CO
Nirk Hurd
Minister for Civil
Society
CO
Nat Wei
Government Advisor, Structure for big
Big Society
society
Charities, social
ent.,vol orgs.
CO / MoJ?
CO
National Security
National Security Advisor Sir Peter Ricketts Advisor
CO
Department of Education Michael Gove
DfE13
Intl security agenda
No change from
Education Secretary DCSF
High impact/low profile changes so far
Cabinet Committees
Coalition Committee
National Security Council
Banking Reform
Chair
Responsibilities
Clegg/Cameron
Referee Cabinet disputes between Tories
and Lib-Dems
Cameron
Join-up foreign, defence, home, energy
and intl develop.
Osbourne
Set up independent commission to report
on banking industry
Possible changes
Rumoured
Who
OGC Reform/
PMSU/ PMDU
gone?
Francis Maude
Universities to
Education
Vince Cable
Operations
Director
Lord Browne
Title
Minister for the
Cabinet Office
Business Secretary
TBD
Responsibilities
Department
ICT/Cabinet Office units
CO
Trade, competitiveness,
competition policy,
consumer protection
Scrutinising performance of
all Whitehall
BIS
CO
14
The emerging picture?
No. 10
Treasury
Cabinet Office
Operations
Security
Civil
Society
Const.
Reform
Defence
DECC
DCLG
Health
Foreign
Affairs
Defra
Scot/Wales/
NI
DWP
DFID
Transport
Education
Home Office
MoJ
BIS
Operations
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EXTRA SLIDES FOR Q&A
16
Department reconfigurations, 1950-2009
30
Depts affected
Total Number of Departments
25
20
15
11
10
10
7
7
7
7
7
6
5
5
5
4
3
3
2
1
1
3
2
1
3
3
3
3
3
2
11
1
1
1
1
1
0
505152535455565758596061626364656667686970717273747576777879808182838485868788899091929394959697989900010203040506070809
Labour expands while Conservatives consolidate
# Departments Affected
Brown
11
1
Blair
19
Major
0
9
-3
1
1
Wilson 2
6
4
Heath
14
Wilson 1
7
13
3
3
-1
8
Labour Average
Conservative Average
-2
-5
McMillan
Churchill
-2
28
Douglas-Home
Eden
2
6
Thatcher
Callaghan
Net Change
-2
13
9
1
Conservative
Labour
-1
Note that the averages calculated for Labour and Conservatives are averages for the political parties over this time period. They do not reflect premier tenures.
Department reconfigurations
are common after leadership changes
11
11
Conservative
Labour
7
7
7
7
7
6
6
5
5
5
3
3
2
1
5
3
2
2
1
1951 1955 1957 1963 1964 1970 1974 1976 1979 1990 1997 2007
Post-appointment department changes
3
1
1950 1951 1955 1959 1964 1966 1970 1974 1974 1979 1983 1987 1992 1997 2001 2005
Post-election department changes
Figures in red are for emphasis only and indicate the years when new PMs abstained from reconfiguring departments.
Prime Ministers changes by term
Brown
11
Blair
5
Major
Thatcher
11
19
14
3
6
3
2
Rest of Term
First 2 Years
9
7
Callaghan 1 1
Wilson (2)
6
6
Heath
Wilson (1)
7
Douglas-Home
7
Macmillan
Eden
Churchill 1
2
12
21
28
7
2
13
11
3
14
3
7
8
20
Legislative process for select MoG changes
Methods of Reform Process
Examples
Loopholes
Formal dissolution
and transfer of
statutory functions to
another department or
departments
Ministry of Overseas
Development
The choice between negative and affirmative resolution
procedures is not clear cut: (Pollitt 1984)
Secondary Legislation:
Proceeds by Order in Council
subject to the affirmative
resolution procedure
Transfer of statutory
Secondary Legislation:
functions from one
Transfer of Functions Order
department to another under the negative resolution
procedure
Examples: Department of Trade and Industry in 1983 was
created via a "merger" and Transfer of Functions Orders
were utilised instead of dissolving its former parts;
Department of Economic Affairs was dissolved via a
Transfer of Functions Order rather than using the
affirmative resolution procedure.
Civil Service Department
Transfer of Functions regularly delayed: (PASC 1995)
Department of Trade
Department of Trade and
Industry
DCLG: Created May 5, 2006; Order July 31, 2006
ODPM: Created May 29, 2002; Order November 4, 2002
Defra: Created June 8, 2001; Order November 12, 2001
DEE:
Created July 5, 1995; Order December 4, 1995
Transfer or cessation
of non-statutory
functions
Cessation of statutory
functions
No need for the use of
statutory instruments in this
case
Primary Legislation:
Approval of both Houses
None identified
None required
None identified
Delayed legislation: Pollitt 1984 claims there are countless
examples of statutory functions falling into disuse and
waiting to be formally eliminated in revising legislation.
Creation of new
statutory functions
Primary Legislation:
Approval of both Houses
Department of Constitutional
Affairs: Constitutional Reform
Act of 2005 confirmed changes
to the judiciary.
Bodies may be created administratively and then
subsequently become statutory or created by administrative
action pending statutory authorisation: (Pollitt 1984)
Example: Department for Constitutional Affairs was
effectively created in 2003 but not confirmed until 2005.
Creation of new
government bodies
under new Secretaries
of State
Secondary Legislation:
Proceeds by Order in Council
subject to the negative
resolution procedure
Department of Economic Affairs None required
Welsh Office
21