Changing the machinery of Government

Cogs21 We’ve said repeatedly that the constant changes in the machinery of Government are obstructive to good policy-making. The National Audit Office (NAO) today says that 90 of these reorganisations of central Government happened between 2005 and 2009. Many of our past reports have cited this as a reason why Government is run inefficiently, and why money is wasted. But now we can see how much the changes themselves have cost.

The NAO’s report shows that this constant state of flux has cost £780 million between 2005 and 2009. The report does say that they have not taken into account financial benefits of reorganisation so this is not a net figure. But the reason they discount benefits is “because [we] found limited evidence of measurable benefits, or of reorganisation being the most cost effective way to deliver those benefits”. No need to deduct these from costs, then.

In our report on capital project overruns, we showed that changing departmental structures and personnel lead to poor project management. The NAO found that reorganising departments were cases of poor project management themselves:

“Any reorganisation is a project, sometimes a very large one, but adherence to key 8 principles of good project poor. Having good project management systems in place as early as possible, ideally when a reorganisation is announced or as soon after as possible, is essential for success.”

Our latest quangos survey argued that changes meant that bodies were transferred across to different departments that might be there one year and gone the next. Bodies themselves were also likely to reorganise regularly. This means that it’s extremely difficult to keep a check on the proliferation of the semi-autonomous state as a whole, as well monitor the growth and acquisition of unnecessary functions of individual bodies. Reorganising quangos themselves has taken up much of the £750 million cost and the NAO today say:

“Three-fifths of arm’s length bodies did not conduct investment appraisals to 7 compare expected costs and benefits of alternative options before taking a decision to reorganise. As a result, they could not be certain that reorganisation was justified or that the chosen approach was the most cost effective.”

To put this into context, the report says that since 1980, 25 new Government departments have been created, with only 13 still in existence. In the US, 2 have been created in the same time – both still exist.

This is heavily linked to our post earlier this week. Government is too big: it tries to do too much; there are too many ministers; and the organisations that departments try to run are too big for them to handle. Government has become more complex, but much of it is down to their own doing. And it costs the taxpayer dearly. 

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