11 May 2010
The UK structure of government has the aura of great longevity. Prime Ministers have succeeded one another, the great offices of state have the outward form they had the century before last. There is no truck with a fifth republic – or a fifth anything else – here.
But behind that facade of stately permanence, the structure keeps changing.
Her Majesty may by Order in Council—
(a) provide for the transfer to any Minister of the Crown of any functions previously exercisable by another Minister of the Crown;
(b) provide for the dissolution of the government department in the charge of any Minister of the Crown and the transfer to or distribution among such other Minister or Ministers of the Crown as may be specified in the Order of any functions previously exercisable by the Minister in charge of that department;
(c) direct that functions of any Minister of the Crown shall be exercisable concurrently with another Minister of the Crown, or shall cease to be so exercisable.
And she does.
The picture below shows how departments have split and merged over the last few decades (it’s a poor quality mobile phone picture I took at last year’s Civil Service Live –
if anybody knows a source for a proper version of this image and its pair which projected forward over the next few decades, please do let me know Update: high quality images kindly provided by the good people of BIS and included in a new post here).
But the fact that it happens a lot doesn’t make it an unalloyed good thing. The National Audit Office notes ascerbically:
Central government has always reorganised, even though its fundamental activities change little.
The Institute for Government has seven lessons for a new government, the second of which is pretty blunt:
Don’t reorganise departments on a whim – build institutions to last
The creation of a new department is a powerful way to signal a change in direction and grab the headlines, but machinery of government changes do not come cheap.
More importantly, in most cases it takes at least two years for the new organisation to settle and three or more for the expected benefits to begin to flow through.
So, before playing around with the map of Whitehall, the next PM should be sure they have strong rationale for the change, and be prepared for morale and productivity to drop – especially in departments that have been frequently reshuffled in the past.
The force of this advice is only slightly diminished by the Institute’s map of Whitehall which places the Cabinet Office in Dartmouth Street, the Department of Health in Victoria Street, the Northern Ireland Office in New Palace Yard and the Department for Transport half way along the platform of St James’s Park Station.
What some of us are used to calling ‘machinery of government’ changes have a rather brisker feel in the private sector where it is known as M&A. Notoriously, many company mergers destroy value rather than creating it – which doesn’t seem to have any effect in reducing their numbers. But it does mean that there has been a lot of attention paid to the questions of how value can be maximised and of where the pitfalls are.
Apparently that’s rather less true in government. As the NAO observed in their report:
Central government bodies are weak at identifying and securing the benefits they hope to gain from reorganisation. There is no standard approach for preparing and assessing business cases setting out intended benefits against expected costs. By not identifying anticipated benefits clearly, public bodies run the risk of carrying out reorganisations unnecessarily. More than half of reorganisations do not compare expected costs and benefits of alternative options, so there can be no certainty that the chosen approaches are the most cost effective.
There are of course many challenges in managing the bringing together of organisations. Cultural issues are often particularly long running – it’s not unusual to be able trace fault lines back to the differing cultures supposedly merged years before. From outside, that might appear an entirely trivial problem for government - the civil service is, after all, homogeneous and in a single line of business. Except that it isn’t. The cultural variations between government departments may or may not be small in absolute terms, but that doesn’t stop them from being quite big enough to be an impediment to smooth integration and collaboration.
Other issues may be shorter term, but a more immediate and more immediately frustrating obstacle to effective merger. I remember a colleague who had been closely involved in the birth of DEFRA finding the complexity and cost of the apparently simple task of integrating two email systems out of all proportion to what anybody had expected or prepared for. More recently, another colleague in the thick of another merger felt overwhelmed by the process of moving people from jobs in two predecessor organisations into roles in the new organisation which, he felt, had stopped him from focussing on his real job for several months. It is the accumulation of those issues which, I suspect, have as much to do with the medium to long term success of organisational changes as the policy, political, or operational logic which drove the decision in the first place.
It’s not all gloomy though. Here as in many areas there are new opportunities. Steph Gray’s account of how he and Neil Williams found themselves in a newly merged department one Friday and had created an integrated website for it within 72 hours has a sense of urgency and achievement not always associated with the coming together of new IT systems. And yes of course to start with that was just a thin layer sitting above the two existing departmental sites, but within a few months Steph was able to report the completion of a radical and comprehensive integration project.
It’s that sort of practical experience which has the potential to make a real difference to the speed and effectiveness of integration. So back to the private sector: is there anything that the mixed experience of M&A can tell us about the mixed experience of machinery of government?
There’s a new report out on the parallels between private and public sector restructuring which strongly argues that there is – and that even in apparently hard edged areas such as IT integration, the technical challenges are not the real issues:
Three crucial lessons stand out from our conversations: the need to focus on creating value, not just cutting costs; the importance of being able to connect the very top of the new organisation to its front-line staff; and the role of decisive, sometimes dictatorial, leadership.
Source for Consulting, the company which produced the report is running a free seminar next month to launch it formally, which could be rather useful to anybody who unexpectedly finds themselves merging – or demerging – bits of government.
[Anybody tempted to follow those last links should know that they are not quite as disinterested as most of the stuff I point to - the Source report was written by my wife. But that doesn't mean it isn't good. Quite the contrary.]