BEIS budget not yet settled, says perm sec Alex Chisholm

Business, Energy and Industrial Strategy permanent secretary tells MPs that overall financial envelope for the combined energy and business ministry "hasn't yet been resolved" – and says he hopes majority of merger complete by March

By Matt Foster

18 Oct 2016

The budget for the new Department for Business, Energy and Industrial Strategy has not yet been finalised, the organisation's top civil servant Alex Chisholm has told MPs, as he remained tight-lipped on whether job losses could result from the merger of the former business and energy ministries.

Prime minister Theresa May ordered a wide-ranging shake-up of Whitehall when she took office in July, with the Department for Energy and Climate Change (DECC) being folded into the Department for Business, Innovation and Skills (BIS) to create BEIS. Meanwhile, key BIS policy areas of higher education and international trade were transferred out of the organisation to other ministries.

Both DECC and BIS agreed tight spending settlements with the Treasury only last November, as part of the government-wide Spending Review.

New Department for Business, Energy and Industrial Strategy swallows up DECC and BIS — full details and reaction
Long-serving business department chief Martin Donnelly to move to international trade – as Alex Chisholm takes over at BEIS
BEIS set to lose consumer and competition policy director

But, appearing before MPs on parliament's business committee on Tuesday, Chisholm, the recently-appointed BEIS permanent secretary, made clear that the merger of the two departments did not mean a straight combining of their resources.

Asked whether the new department would press ahead with former business ministry's "BIS 2020" plans for office closures and staff cuts – particularly controversial with MPs because of the plan to slash the department's policy presence outside of London – Chisholm said BEIS had decided to "look afresh at what we want to try and achieve in terms of our connectivity with the whole of the UK".

But he added: "We need to determine what our overall financial envelope is, which hasn't yet been resolved [...] We will know more after the Autumn Statement, more again after the Supplementary Estimates which are finalised in February.

"Once we have a final figure for what our overall financial envelope we have to operate in is, then we'll be able to finalise our workforce planning, including how we are represented in the UK."

Chisholm said the spending totals for BEIS were "subject to negotiation" ahead of the Autumn Statement, and pointed out that a substantial proportion of the former business department's work – higher education policy and international trade – had not moved over to the new organisation.

"Efficiently and at low-cost"

The BEIS chief also revealed that the new department was in the second phase of a three-stage merger process, and said he wanted to have the majority of work done to fully integrate DECC and BIS by March.

The first stage of the DECC-BIS merger was, he said, "mobilisation" – creating a single department "at the top and to the outside world" in the first few weeks following May's appointment as prime minister.

"That is complete," Chisholm said. "And then from September through to the beginning of March we're running what we call the transition phase."

Chisholm explained that this second part of the merger process involved bringing all staff together in a single building in central London, and making sure the two former departments were "working off a common IT system" with "a single set of HR policies",

"There's obviously a great deal to that wider transition task," he added. "We aim to have that complete by the end of this financial year, so roughly a six-month process.

"I've merged bodies before, both in the public and private sector. Six months would be going some, that would be rapid, that would be good going. But we're very keen to make sure we can achieve this efficiently and at low-cost to the taxpayer and make sure that doesn't effect our ability to function externally fully effectively."

The BEIS perm sec said there would then be a "final phase" kicked off in April, focused on getting the "full benefits of the merger".

Chisholm was also pressed on the staffing implications of the merger, with committee chair Iain Wright asking whether there was now a "possible duplication of responsibilities" after combining the two departments.

While the BEIS perm sec said there was "likely to be some duplication, particularly in the corporate services area", he said the department had not "at this point completed our plans for how best to address that".

"But clearly there is going to be some duplication and that's something which we'll be engaging closely on with staff and with ministers in the department in the weeks ahead," he added.

Asked specifically whether there would be job losses as a result of the creation of BEIS, Chisholm replied: "I wouldn't like to speculate at this point in time. And obviously we're still going through the machinery of government processes.

"Quite a number of staff have transferred – some 400 or 500 – to the Department for Education. I think around about 170 have gone to the Department for International Trade.

"We also, in ordinary times, continue to lose people at one end and recruit some people at the other end. So we're not really in a position yet to be able to make any general statement about what the future implication would be for staff."

Share this page