We make the following recommendations to address the clear and significant risks to value for money that current arrangements present. They are not intended to affect the ability to change ministerial portfolios but to separate those changes from major departmental restructuring.
a) There should be a single team in government with oversight and advance warning of all government reorganisations. Over time we would expect the impact of having such a team in place to be that the number of reorganisations would reduce. This central team should have the skills and experience to exercise quality control over reorganisations, with the authority to insist that any conditions it judges necessary are in place and, if they are not, to assign people with relevant skills to the reorganisation project. In order to intervene effectively, the central team would need prior notice of all proposed reorganisations. The central team should:
• oversee a 'cool-off' period for reorganisations of departments, during which time most staff would stay in their current organisations and change would be achieved through, for example, a small support team for ministers and changed reporting lines;
• oversee a review process of these minimally disruptive arrangements after two years, leading to the implementation of more permanent change, if appropriate, at that stage;
• undertake continual assessment of how well the interaction of central government bodies is working and where there is scope or need for improvement; and
• be accountable for overseeing the overall reporting set out in subsequent recommendations.
b) For announcements of significant reorganisations, a statement should be presented to Parliament, quantifying expected costs, demonstrating how benefits justify these costs and showing how both will be measured and controlled. Recognising the Treasury principle of 'cost neutrality' for reorganisations, the statement should identify which activities are expected to be cut to pay for the reorganisation.
c) Intended benefits should be stated in specific measurable terms that enable their later achievement (or otherwise) to be demonstrated. The broad terms in which reasons for reorganisation are currently expressed do not enable a clear assessment to be made of whether reorganisation is necessary. A lack of clearly stated intended benefits hinders subsequent assessment of whether the aims of reorganisation have been achieved.
d) The planned and actual costs of reorganisations should be separately identified within financial accounting systems so costs can be managed and subsequently reported. All bodies affected by a reorganisation should set planned costs before implementation begins, or soon after where this is not practicable.
e) A breakdown of planned and actual costs and financial benefits of every significant central government reorganisation should be reported to Parliament in the organisation's annual report in the year the reorganisation is announced. This report should also set a date for a final report on reorganisation costs and benefits, and for an interim report at three years if the final report is expected later. The central reorganisation team should consider the level of detail Parliament requires, but this should include all significant costs and financial benefits. The team should also set a clear and appropriate definition of what constitutes a significant reorganisation for reporting purposes.
f) Each body at the heart of a central government reorganisation should share with the Cabinet Office an analysis of lessons learned within two years of the date of the reorganisation. Such analysis should collect insights from other bodies involved in the reorganisation and draw on feedback from staff and stakeholders. The Cabinet Office should review and update its own guidance annually on the basis of its analysis of these submissions and of the reports recommended above on costs and benefits. The current lack of systematic analysis is a lost opportunity to improve implementation in an area of central government activity that is repeated many times a year.