The reshuffle demonstrates the PM’s power – but does not mean the end of the Treasury

We do not know whether the defenestration of Sajid Javid was a classic example of a reshuffle going wrong or a planned stunt to force him out. The immediate result is it strengthens No.10, although over the full course of this government it would be unwise to bet on the Treasury’s reign being over.

There are benefits and risks to a strong centre

We saw over the second half of last year that this is a No.10 adept at turning tricky political situations to its advantage. The appointment of a new chancellor and instruction for No.10 and Treasury special advisers (SpAds) to work as a single team will play to the PM’s advantage. The new join-up will cause some confected outrage among commentators and perhaps even Treasury officials, but it is not a bad thing in itself – No.10 and Treasury SpAds need to work closely together.

It is also a simple reflection of the fact that Boris Johnson is currently a particularly powerful prime minister. He can drive his agenda through the government and in the end it is reasonable that he appoints a chancellor in whom he has confidence.

So this is good for the government’s overall sense of direction, but not necessarily a recipe for better decision making. And any proposal to abandon the fiscal rules (introduced by Javid) would be a mistake. Less challenge from departments means that problems will not be surfaced and decisiveness might tip over into rashness. What would the Blair government have looked like without Brown’s counter-balance, and did the Cameron administration after 2015 suffer from a lack of constraint?

The Treasury endures

For all the focus on the relationship between No.10 and No.11 Downing Street, a cohesive centre also then strengthens the Treasury’s influence over the other government departments. Rishi Sunak will be a powerful chancellor among his cabinet colleagues and as long as he has the PM on board will be able to make decisions stick.

The first example of that will be the budget. Already only three-and-a-half weeks away, in reality the new chancellor has even less time to shape his first set-piece fiscal event, as his work will need to be submitted to the Office for Budget Responsibility a reasonable period in advance. His involvement in the process as chief secretary to the Treasury will help, but there will still be a vast number of decisions to make at speed, not all of which will hit the radar of the PM and the No.10 team.

The Treasury has a habit of surviving and preserving its influence. It is true that the PM won’t want to lose another chancellor, and there are few institutions more adept at using the levers at their disposal. Treasury influence is in hundreds of bilateral relationships between officials at all levels of the civil service.

Treasury staff will of course be guided by the government’s overall political direction, but the department’s approach will not change with the fusing of some SpAd teams. And to the extent that its ministers and officials reflect economic reality and the inevitable trade-offs every government must make, their position will also ultimately prevail. I wouldn’t write the Treasury’s obituary just yet.