With the prime minister’s reshuffle creating four departments where there were three, Giles Wilkes assesses the thinking behind Sunak’s decisions – and whether or not the restructuring can deliver his priorities
There are plenty of wrong ways to judge a “MOG-change” (for the non afficionados, “machinery of government”). The worst is to fail the government at an impossible question. For example: has the Rishi Reorganisation solved his political problems? Obviously not – in the mordant words of the FT’s Stephen Bush, “I don’t think anyone thinks that the Tory Party woke up yesterday only a science ministry away from good political health.”
Nor does it fix policy problems on its own. Creating a department for energy security won’t magically make our energy more secure. Problems of perception will not go away either, though I would reject any column based on the stunning insight that this tinkering still leaves Sunak without a growth plan. If you could not discern the government’s plan – which is based like most of its predecessors on macro-economic stability, a patient improvement in the core ingredients of long-term growth (infrastructure, skills, the science base) and some determined-sounding words about improving regulation and fixing spatial inequalities – last week, then the new departmental name-plates will not have helped.
As I set out elsewhere, any organisational rationale usually reflects a balance of considerations, and how Sunak has chosen to remould departments reveals his priorities plainly.
Sunak’s restructuring choice was between bigger departments or dividing up policy focus
There are routes to restructuring government departments. On the one side, there is an agglomerating tendency to bring policies and functions all within one place and follow a single strategy. This was the justification for recent incarnations of the business department. Under Peter Mandelson and Vince Cable, BIS encompassed education, technology and trade in order to mould all of these together around one vision. Our university priorities and applied science should reflect our business strengths and trade, went the logic. Similarly, under Greg Clark, its successor BEIS reflected the thought that energy, a long-term, high-investment, regulation-affected sector if there ever was one, should be thought of as an industrial strategy priority. Business thinking and energy should be working together, not at loggerheads.
On the other side, there is the demand for focus. Who wants the same department worrying about the Premier League and scrutinising broadband investment? Or a secretary of state fretting about the steel industry while negotiating student maintenance grants? Similar arguments have been made in the corporate world, about the wisdom of having an industrial conglomerate or a more focussed business. The ebb and flow of the fashions has created good work for mergers and acquisition bankers down the years.
In Rishi Sunak’s case, his restructuring reveals a preference for smaller departments with a narrow focus.
Sunak’s restructuring shows exactly where his priorities lie
Sunak has created four departments where there were three before, revealing a preference for focus. He has long felt that energy and business were not working well together, a dysfunction that must have felt more urgent after a year of soaring energy bills. There was always some logic to digital sitting with culture and media – most of our entertainment and news now arrives electronically. But there was similarly a sense that a policy area of such economic importance sat oddly within one of the less-economic ministries. Cultural industries are important, but film and music combined maybe generate £8–10bn GDP in the UK – less than a week’s revenue of the biggest five tech firms. Culture has a better chance of getting a hearing if not competing against the needs of start-up computer firms. 7 Hallas D, An outdated Culture Department prioritised Centre Parcs over innovative start ups, City AM, 8 February 2023, www.cityam.com/an-outdated-culture-department-prioritised-centre-parcs-over-innovative-start-ups/
Where Sunak has chosen to agglomerate reveals his priorities plainly. Science and technology is a new combination, and a manifestation of how the prime minister sees 8 HM Government, Making Government Deliver for the British People, February 2023, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1134989/Making_Government_Deliver_for_the_British_Peo… the future of growth. As he puts it, the UK needs to respond to the “increasingly central role played by science and technology in the global economy”. Digital companies are being told that they have one place to go in government, one champion to stand up for them, a single locus of expertise. The new department embodies the ambition of many Conservative ministers past: that we should have a better institutional production line converting the UK’s fantastic universities and science base into exciting start-ups and future global champions. I long ago lost count of the number who have called for the UK to create its own Silicon Valley and who imagine that California’s digital cluster operates in the same linear fashion.
Sunak needs his departments to work with each other – and with the Treasury
Focus usually suits prime ministers, who like a clear line of accountability. If the Daily Mail is shouting at them about some issue, they need a single cabinet minister to shout at in return, not a bewildering org-chart. It can suit stakeholders too, who might prefer one place and one ministerial champion to several. The problems come where functions slip away over departmental boundaries. Plenty of regulations relevant to technology and energy will sit with the Department for Business and Trade, as will consumer and competition issues, for example. But these fissures can always be found. Planning affects most businesses, and that sits in the Department for Levelling Up, Housing and Communities. A similar point can be made about higher education. If the prime minister and Cabinet Office cannot make his departments work together, there will always be problems.
The other challenge is whether these new, mostly smaller departments will have the clout to stand up to the Treasury during a time of fiscal strain. Credible longevity is the essential missing ingredient in UK economic policy making – particularly when it dares to have an industrial strategy. Although Rishi Sunak is said to dislike the term, a long-term plan for clean, secure energy and scientific and technological leadership is just that.
I do not agree with those who portray the Treasury as a malign enemy of all such planning, but like the spending departments that it confronts, it has its own political pressures to assuage and its own outlook on the world. Its own certainty is to the detriment of others’. Next year’s budget is generally a bigger priority than anyone’s 10-year plan. It also has some of the highest-quality thinkers in government. Having them involved earlier in these new department’s plans will be key to their success.
Ultimately, long-term thinking and co-ordination are where the real achievements lie. Whether Rishi’s Reorganisation succeeds or fails does not come down to the excellence of any one department but how well they all work together.