Smaller Government: Shrinking the Quango State - Public Administration Committee Contents

4  Managing the transition

53.  The Government has decided which bodies to reform, and how it wishes to see them reformed, but arguably the largest challenge still lies ahead - managing these reforms. With 192 bodies earmarked for abolition, 118 due to be merged and a further 171 which will be retained but undergo "significant reform", these changes represent a major restructuring of the machinery of government.

54.  It is not only the Government that finds managing these kinds of reform difficult, as the NAO note in their report Reorganising central government "Achieving successful change to organisational structures is challenging whether in the public or private sector."[60] Mr Banks, Chair of the Public Chair Forum, notes that the majority of mergers - including those in the private sector - "fail to deliver the benefits envisaged when they are planned."[61] Nevertheless, BDO, the UK's 6th largest accountancy and audit firm, raise particular concerns about the public sector's ability to manage change on this scale arguing that reform of public bodies has the potential to be "an unsupported government agenda", due to a lack of expertise in public sector organisations.[62] BDO argued that:

Ministers and sponsoring departments [should] draw upon private sector experience with organisational restructuring to ensure any operational wind-down is done efficiently, while maximising value and technical efficiency from organisations which remain in operation.[63]

55.  A number of organisations used their evidence to highlight the scale of the challenge and recommended ways the Government can best manage the associated risks. The PCS Union's evidence states that transitional arrangements will involve:

i.  harmonisation of highly varied terms and conditions;

ii.  legal and other obligations to carry out collective and individual consultations;

iii.   negotiating complex transfer rights; and

iv.  individual job assessments to determine full or part transfer of functions.[64]

56.  The IfG believes that the "process of closure and reorganisation will need to be tightly managed in order to deliver savings and realise potential benefits". It highlights the potential for considerable legacy costs in organisations which might require substantial upfront expenditure, and recommends that the Government should learn lessons from past rationalisations.[65]

57.  Mr Banks, Chair of the Public Chair Forum, emphasised the importance of transition management in minimising the disruption caused by changes to the structure and remit of bodies. This was particularly important in the case of the legacy body, which were often neglected, but continue to be responsible for delivery until the day of the handover. He recommended that, as far as possible, there should be continuity in the management and non-executive directors during this period.[66]

58.  Rona Chester, Sport England, told the Committee that she felt that some form of "consistent framework" would be helpful to provide bodies with guidance as to how they should manage the transition. She noted that although many organisations had gone through these kinds of reorganisations before there was "a real danger" that a lack of guidance would lead to each body reinventing the wheel.[67]

59.  Some work has already been done to draw together lessons from previous restructurings. The Hearing Aid Council has recently published a document on the lessons to be learnt from its own abolition.[68] The National Audit Office has previously conducted a study of the reorganisation of central government departments and formulated a number of principles that should be followed in any future reorganisations, and how they should be applied in practice. These principles include:

i.  Ensuring the implementation team has detailed plans in place and the necessary skills in project and change management;

ii.  Communicating openly, honestly and regularly with staff and stakeholders, and seek to deliver early benefits to maintain/build their support;

iii.  Being clear about the outcomes sought and track benefits and key performance measures regularly;

iv.  Recruiting and appointing key senior executives early;

v.  Implementing decisively and swiftly to limit uncertainty;

vi.  Phasing in implementation of major changes - which can often be more effective than a 'big bang' approach; and

vii.  Ensuring the 'nuts and bolts' work during transition and that normal business is maintained.[69]

60.  Many of these principles are equally relevant to successfully managing changes to public bodies. Therefore we have been working with the NAO to develop guidelines for the reorganisation of public bodies that builds on there original work. We are publishing these guidelines as Appendix A to this Report. While inevitably they do not cover all the possible issues that might come up during a transition process, we believe that they set out expectations that every transition plan should meet. The Cabinet Office is also intending to issue its own guidance in the New Year.[70]

61.  It is important that clear guidance is issued to departments to help them manage what will inevitably be a complicated reorganisation process. Failure to do this will result in duplication of effort and unnecessary costs. We recommend that the Cabinet Office incorporate the guidance we have developed with the NAO into the guidance it is developing for departments.

Role of the Cabinet Office

62.  When we questioned the Minister about what role the Cabinet Office would play in the transition he said that it would, "be available to help and there will be common experience and toolkits that can be made available more widely, which we can facilitate."[71] However, he stressed that responsibility for the transition would primarily lie with the sponsoring departments:

They are responsible for the implementation of this. They have the spending constraints, they have the budget, and they have to manage it in their way.[72]

63.  The Minister seemed unclear as to whether the Cabinet Office would need to approve each department's transition plans:

I can't remember, to be honest. I've generally required most things to be approved by me, and I can't remember whether we've specifically required that, but we are getting departments to submit their implementation plans.[73]

We asked the Government to clarify, in its response to this Report, what role the Cabinet Office will have in scrutinising departments' implementation plans, and whether the Minister for the Cabinet Office will personally approve each plan.


64.  The Cabinet Office's Business Plan states that the one of its actions is to "support departments in developing a robust implementation plan"[74] for managing changes to public bodies. When this plan was published at the start of November this action was listed as "completed". We wrote to the Cabinet Office and queried how this was possible, given that some bodies were still under review. Its response contained much information on the Cabinet Office's role in support of departments; including a future plan to issue a "checklist" to help departments evaluate their own transition plans. However, it did not address how its business plan can claim to have completed this task when work was still ongoing.[75]

65.  We are concerned that an ongoing task is listed as a "completed" in the Cabinet Office's business plan. We welcome the intention behind the publication of departmental business plans, but they will only be useful tools to help the public hold the Government to account if the information contained in them is accurate. We request the Cabinet Office update its business plan to reflect the reality of the situation.

60   NAO, Reorganising central Government, HC 452, Session 2009-10, 18 March 2010, para 3.1 Back

61   Ev w1 Back

62   Ev w8 Back

63   Ev w11 Back

64   Ev 58 Back

65   Ev 49 Back

66   Ev w2  Back

67   Q 39 [Ms Chester] Back

68 The Hearing Aid Council's functions were transferred to the Health Professions Council. The decision to do this was taken on 2005 and the transition was completed in 2010. Back

69   National Audit Office, Reorganising Central Government, HC 452, Session 2009-10, 18 March 2010,  Back

70   Ev 63 Back

71   Q 118 Back

72   Q 120 Back

73   Q 122 Back

74 objective 1.16.ii Back

75   Ev 63 Back

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