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Coffee House

How central government could slim down – and why it probably won’t

17 June 2013

1:58 PM

17 June 2013

1:58 PM

The Treasury is entering its last minute negotiations with recalcitrant departments ahead of next week’s spending review announcement. But for all the talk of ‘difficult decisions’, the settlement doesn’t look as though it will take some of the more difficult decisions about the shape of government itself. In a Free Enterprise Group paper published today, Tory MP Dominic Raab argues that ministers should be looking for savings by scrapping departments altogether, not coming to settlements which merely maintain the current messy setup.

Raab argues that Britain has many more government departments than other developed countries such as the US, Germany and Sweden. He seems quite keen to rule himself off the Christmas card lists of many Secretaries of State, suggesting that the Culture, Media and Sport; Equalities Office; Business, Innovation and Skills; and International Development should be abolished, while other departments should be merged. Mergers should include the Home Office and Ministry of Justice, Energy and Climate Change with Environment, Food and Rural Affairs, HMRC with the DWP to form an agency under the Treasury, while the Communities and Local Government department should subsume the Scotland, Wales and Northern Ireland offices.

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This would cut the number of departments to 11, and Raab believes £8 billion a year could be saved. He’s not the only one who thinks this way: many of his colleagues in the Free Enterprise Group have long wished certain departments – particularly DECC and DEFRA – were merged to reflect their overlapping portfolios and to save money.

There are a couple of reasons why this is unlikely to happen any time soon, though. The first is that it is initially costly to close a department, largely because of the associated redundancies. It is also a dramatic decision – although that in itself can be a good thing – to close a department, as governments traditionally structure Whitehall to send a message about their priorities as much as they pay regard to how efficient that set up might be. It would be easy for the Labour party to claim that the Tories no longer care about being the ‘greenest government ever’, for instance, if DECC and DEFRA merged, even if that made no difference to policies or indeed their delivery. None of these are particularly good excuses, though, for not thinking properly about whether government is working as well as it could.

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