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.
BUSINESS PLANS
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
http://thehearingaidcouncil.org.uk/ 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
http://transparency.number10.gov.uk/transparency/srp/view-srp/1
objective 1.16.ii Back
75
Ev 63 Back
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