Treasury considering cull of departments ahead of Spending Review

Written by Kevin Schofield on 3 January 2019 in News
News

Proposals could include move to create infrastructure ‘super ministry’ by merging three existing departments

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The Treasury is developing plans to scrap or merge a number of government departments as part of moves to reduce spending, it has been reported.

Civil Service World’s sister title PoliticsHome has been told that senior Treasury figures believe the 25 Whitehall departments could easily be reduced without affecting government output.

They point out that in contrast, the government of the USA – which has a population five times the size of the UK - manages to carry out its functions with just 15 departments.


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Under proposals being considered by the Treasury, the departments for international development, exiting the EU and international trade could be integrated into the Foreign Office.

Meanwhile, the departments for transport, and business, energy and industrial strategy, as well as the Ministry of Housing, Communities and Local Government, could become a single ministry with responsibility for major infrastructure projects.

A senior Treasury source told PoliticsHome said: "The current Whitehall set-up is crazy – we have more government departments than the United States. Every time you create a new department it comes asking for more money – we need to start rolling that back.

"Why do we need a massive foreign aid department when we have the Foreign Office? Why have we got a load of different departments taking a piecemeal look at our infrastructure needs?

"If you cut the size of the machine you can release money for the front line – you could save billions rather than raising taxes."

The Sun has reported that the project is being championed by chief secretary to the Treasury Liz Truss, who is in talks with Cabinet Office minister David Lidington about possible implementation ahead of the Spending Review, which has been announced for later this year and is expected to take place in the autumn.

Joe Owen, the associate director at the Institute for Government, told the paper that reorganisations are often done for political signalling purposes to reset priorities, but added: “The cost of disruption can be quite significant in the first few years, as everything needs to change from email addresses to co-locating people.”

The role of some department has long been subject to speculation over possible changes. DfID has been subject to rumour over its future since it was spun out of the Foreign Office by the incoming labour government in 1997. Speaking to CSW last year, DfID permanent secretary Matthew Rycroft said the department had “established itself as a separate, independent department of state working alongside all the others, I hope, in an effective and collaborate way”.

Asked about any possible reorganisation, Rycroft said he “will do whatever the government of the day so decides” on departmental structures, but added: “I think we have got a very good set up with development and humanitarian [work] in one place, working incredibly closely with the Department for International Trade and others.

“The system is one which is good for international development, good for the UK and my job is to make it work ever more effectively, and that is what we’re trying to do.”

A report by the Policy Institute at King’s College London in 2017 argued that a beefed-up BEIS was needed to deliver the government’s industrial strategy in order to tackle Whitehall’s “silo mindset”.

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