Why do we have an agriculture department? Why should a sector that generates 1 to 2 per cent of gross domestic product (GDP) be represented in the Cabinet? The best answer I have been given is that someone needs to administer the rural payments scheme, which distributes subsidies from the Common Agricultural Policy and other schemes. But I can think of plenty of people in the private sector who administer payments—from PayPal to Capita—so it’s not a compelling answer.
When you look at the functions of the Department of Environment, Food & Rural Affairs (Defra) then your bewilderment grows. Environment should surely be with the Department of Energy & Climate Change (DECC), food with other consumer interests in the Department of Business, Innovation and Skills and rural affairs with the Department of Communities and Local Government.
The answer to why the department exists is simple—not because it is necessary or efficient, but because “stakeholders” would be upset if it didn’t exist. The farmers, the fishing industry, the rural lobby would all be angrily—and noisily—against change. Year after year, government opts for a quiet life. What is lost, though, apart from any sense of rationality in the organisation of government? First, there is an opportunity cost in good policy and good governance. Separating environment from climate change—and we are one of the few countries in Europe to do so—weakens policy implementation in sustainability which is one of the challenges of the century. Second, if something as absurd as Defra is allowed to stay in existence, then who wants to address the reasons for a separate Department of Culture, Media & Sport—another industrial department—or the Department for International Development, which now props up the defence budget. Third, a signal is sent to all public bodies that an absurd “all shall have prizes” mentality is part of public administration so they need not worry about the proliferation of titles and directorates themselves.
The fundamental challenge is that all government is an overhead that needs to be streamlined. An unreformed Whitehall is the result and the emblem of an unwillingness to adopt radical change.
I’m puzzled by your call for radical change to Whitehall departments. We tried that under the last Labour government and the results were dismal. As an advisor in Tony Blair’s Number 10, you will have seen the costs and the chaos. By 2010 only four government departments—the Treasury, Defence, Foreign & Commonwealth Office and Cabinet Office—were the same as in 1997. Sprawling new departments had popped up, only to disappear again. The upheavals were a huge distraction as officials argued over budgets and vainly tried to align HR and IT systems while rip-off merchants offered them new logos at extortionate prices. The Institute for Government says that when DECC was set up, there was no IT, the staff were all in the wrong places, ministers were in a different building and there wasn’t even a nameplate on the door. Insiders say it takes two years for a merged department to settle down. Nor do mergers save money: DECC cost an estimated £16m and Defra £31m. Meanwhile the work still has to be done—somebody has to look after food safety, business regulation and Arts Council funding, for example.
I’m not saying the Whitehall architecture should never change but if it’s streamlining you want then the coalition cut civil service numbers from around 478,000 to 405,000 without departmental restructuring. There’s been a huge saving in office space, too, with government offices in London cut by more than half. That impressive Treasury building at the bottom of Whitehall houses not only the Chancellor and his officials but the Department of Culture, Media & Sport, HMRC, the Northern Ireland Office and the Cabinet Office—done almost without anyone noticing, let alone restructuring.
I agree with you that some of the mega-departments created by the last Labour government didn’t work, though you are silent on the successes such as the Department of Work and Pensions—no one would go back to having a separate Department of Employment, would they? The truth is that some of the departments were created as a form of party management rather than a contribution to good governance. There was indeed a grand project for Whitehall reorganisation which ran into political problems and was halted—though not before the proposal for a Department of Productivity, Energy and Industry replaced the Department of Trade and Industry. That too foundered when Alan Johnson, then Secretary of State, worked out the acronym and told Blair that he was not going to be the Secretary of State for PENIS.
But I am certain that much more can be achieved than merely co-locating government departments and reducing the Whitehall accommodation bill. There may well be costs for reorganisation, but those are tiny compared to the savings we would make if we abolished the Department for the National Farmers’ Union—I mean Defra. You and I know that farmers always get what they demand from the government—remember the overpayments made during the mad cow disease crisis. Removing their sponsor department would go some way to reducing their influence. But, as I have already said, good policymaking comes from the proper alignment of functions. Just as welfare policy should be considered alongside employment policy, so environmental policy should be considered together with climate change.
There are other opportunities, too. NHS England is an arm’s length body with an excellent CEO in Simon Stevens. It runs the NHS, not the Secretary of State, so why are there still so many civil servants in the Department of Health? Or what about the departmental parliamentary and correspondence units? Why aren’t they merged and moved out of London? The work could be done more effectively and, as Dfid found when they moved to East Kilbride, you can get far better staff outside London for the salaries the civil service offer.
There is so much that we could do to make Whitehall smaller, less costly and more effective. Yours is surely a counsel of despair.
As I made clear, I am not against all Whitehall restructuring. The creation of the Department for Work and Pensions has indeed been seen as a success, but there have been far more failures.
I’m confused by your dismissive attitude to the savings in staff numbers and office space made in the last five years—with bigger cuts to come. Your goal of making Whitehall “smaller, less costly and more effective” is an excellent one, but as the Tories have shown, it can be achieved without large-scale restructuring. I’m even more perplexed by your attitude to arm’s length bodies. Chunks of government can be spun off into quangos but this makes little difference to the policy, staff numbers or cost. The same work is done by the same people but under a different badge. And when things go wrong in a quango there is always a clamour for ministers to act.
You clearly have a down on farmers and their influence but that hardly justifies abolishing Defra. The teachers’ unions have always had a powerful influence on schools policy but you wouldn’t close the Department for Education, would you? Besides, closing the department wholesale would allow opposition politicians to crucify the government for abandoning our countryside.
You say policy and function should be more closely aligned but which bits of policy and why? One of the reasons for putting climate change and energy together was to sort out the running battle between the windmill-hugger greens and those who want to keep the lights on. Putting climate change into the same department as environment would do nothing to resolve the issue. In the end, policy decisions would depend not on the shape of Whitehall but, as usual, on political will.
As ever you make some sharp points. I don’t mean to dismiss the genuine reductions of the last five years. However, I genuinely think that the scale of changes required now—the 25 to 40 per cent cuts asked for by the Chancellor—requires a different approach. Incremental change is not enough. It is time for some radical surgery.
Perhaps I do have too much of a downer on farmers. But I remain to be convinced that food policy should not be combined with other consumer issues and that people who live in rural areas have radically different needs from those who live in towns and cities.
I think we may well be in agreement on arm’s length bodies. My point is that we should avoid duplication. Where there is a quango that is an operational body like the Environment Agency I fail to see why it should have policy staff—its job is surely to implement government policy. And where, as with NHS England, the body is at arm’s length from ministers precisely to allow professionals and clinicians to lead, then the Department of Health should shrink in size. Your point that in a crisis there is a demand for ministerial action is true, but if ministers hold their nerve over health and let Simon Stevens take the criticism and the praise, they will find it a liberation.
I stick too to my belief that we can devolve far more from the centre to local government. The opportunity for integrating services at a town, borough, city or county level is exciting and offers a real chance of cost savings and service improvements. Policing is connected to so many local government services—from housing to social work—that it makes sense to align not just its boundaries but its budget. Another obvious candidate is the work programme—councils will know their labour markets far better than the person in Whitehall. Give them the budget and the flexibility to shape services to local needs and demands.
We seem to agree on so much yet I remain bewildered. You say that for cuts of up to 40 per cent incremental change is not enough—and then you again speak of Defra. Defra’s budget is less than half a per cent of total government spending. Making food a division of the Department of Business, Innovation and Skills would make no difference to the price of cheese—let alone count as radical surgery.
I am with you in wanting to root out duplication in government. But are you sure you want everything left to the professionals rather than ministers? Wasn’t it the professionals who caused the mid-Staffordshire NHS scandal?
You talk of devolution to local councils which have indeed found some imaginative and successful ways to cut costs. But if you think the Treasury will hand ultimate budgetary control to councillors then you must be on... well, Planet Corbyn.
Harold Wilson, Edward Heath and Blair all tried to re-engineer Whitehall, to close some departments and turn others into super-ministries. The latter were hopelessly unwieldy to manage and somehow the number of departments always remained constant at around 20. Why? So prime ministers can hand out ministerial jobs to party apparatchiks. You may say this is no way to run a country but as Sir Humphrey Appleby once observed: “A career in politics is no preparation for government.”
