Is Brexit leading to the recentralisation of Whitehall?

How far are the massive changes brought on by Brexit accelerating the reversal of 1990s decentralisation, and will they usher in a more centralised machinery of government in the long term?


PA

Last month, business department permanent secretary Alex Chisholm told the BEIS select committee that: “The overall process of EU exit is something for which there is no look-up guide. It is a very big enterprise, there are a lot of moving parts and it requires unparalleled co-ordination within government.”

That is, probably, an understatement. As well as 300 plus workstreams – each the responsibility of a department, but with overall coordination falling to the Department for Exiting the EU – Brexit is creating significant upheaval in Whitehall headcounts and machinery of government. According to the Public Accounts Committee, more than 5,000 civil servants were reallocated across Whitehall just to create the two new ‘Brexit’ departments – DExEU and the Department for International Trade (DIT).


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The Department for Business, Energy and Industrial Strategy is also a new creation – the old business department lost its “skills” portfolio and nearly 300 staff to the Department of Education, but gained nearly all the former Department for Energy and Climate Change portfolio, along with around 1,400 staff. It has had to create a further 350 posts, according to the NAO, to cope with its 68 Brexit workstreams.

DIT meanwhile, created to foster trade for a UK outside of the EU, drew its core from existing BIS staff and has faced the challenge of building up government’s hitherto extremely limited trade negotiation function. Latest NAO figures show that DIT staff numbers grew to 3,745 while its budget was £364m in 2016-17.

Whitehall has always been subject to rapid organisational changes. The Cabinet Office used to have a Machinery of Government Group (MOGG) to organise the moves, but it was abolished under prime minister Tony Blair. He was following a decentralisation trend begun under Margaret Thatcher, who gave departments greater control of their budgets through the Financial Management Initiative, and continued by John Major, who decentralised some HR functions.

The doctrine of decentralisation was based on the idea that decisions about allocation of money, personnel policies, roles and pay and managing resources were best done as close to frontline as possible. Centralised, top-down systems were deemed inefficient and clumsy. The doctrine, though not always fully implemented, led to a lot of change across Whitehall – much of which is now being hastily reversed.

Recentralisation had already started long before the Brexit result. Under the coalition government, former Cabinet Office minister Francis Maude drove a reform programme that had significant elements of recentralisation at its core. Much of it is being continued by civil service chief executive John Manzoni.

But the scale and pace of change required to meet the Brexit challenge has accelerated recentralisation. Manzoni recently told the Public Accounts Committee that Brexit allows the Cabinet Office to “have a grip across the system”, alluding to existing reforms including central recruitment for digital and technology roles and the centrally-driven functional leadership models.

The chief executive also stressed that Brexit was an opportunity to cement long-lasting civil service reforms. “We need to figure out how to use this moment to accelerate a set of changes that the civil service has been putting in place for the last few years,” he said.

Government has not, yet, reversed all the decentralising changes introduced in the 1990s. Departments still largely recruit, grade and set pay themselves, while some “Next Steps” executive agencies, introduced under Thatcher, still exist. Brexit will also make some quangos grow, such as the Medicines and Healthcare Products Regulatory Agency, which will likely have to expand to replace work currently done by the European Medicines Agency.

But the scale and pace of Brexit changes do seem to support the shift back to centralising, command-and-control tendencies of the pre-90s era. It remains to be seen just how far “a grip across the system” will develop into full scale and long-term recentralisation – perhaps under the guise of new functional structures – and how much will be a temporary feature of the Brexit transition period.

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