Devolution, integration, prevention: Do the government’s public service reform plans add up?

Introduction

At its first spending review since entering office the government stated a three-pronged approach to public service reform: to devolve more power out of Westminster, to better integrate services at the local level, and to shift the focus of public services towards prevention. ⁹⁶ HM Treasury, Spending Review 2025, CP 1336, The Stationery Office, June 2025, www.gov.uk/government/publications/spending-review-2025-document/spending-review-2025-html

And they are important. But, nearly two years after entering office, the Starmer government is pursuing quite a different approach in practice. 

Rather than devolving power to services at the local level it has revealed a preference for centralisation, with control over four key services (including the NHS) being moved closer to ministers. Other structural changes will at best delay and at worst complicate its objectives of local integration and a shift to prevention.

What is the state of play for the government’s reforms?

This Insight looks at six key public services undergoing reforms this parliament. All six are undergoing some form of structural reform, as outlined here.

The NHS 

The government is abolishing NHS England (NHSE), the public body set up in 2013 to put distance between ministers and day-to-day running of the service. It is bringing many of its functions back into the Department of Health and Social Care (DHSC). It is also reorganising the 42 integrated care boards (ICBs), the bodies that plan health care for their local populations. It will also introduce ‘integrated health organisations’ (IHOs) ¹⁰¹ NHS England, ‘Fit for the future: towards population health delivery models’, ENGLAND.NHS.UK, 17 March 2026, retrieved 24 March 2026, www.england.nhs.uk/long-read/fit-for-the-future-towards-population-health-delivery-models/  and single- and multi-neighbourhood providers (SNPs and MNPs), ¹⁰² NHS England, ‘Neighbourhood health framework, ENGLAND.NHS.UK, 17 March 2026, retrieved 24 March 2026, www.gov.uk/government/publications/neighbourhood-health-framework  though these plans are far less developed than the NHSE and ICB reorganisation.

Local government reorganisation

Labour has launched a programme of local government reorganisation (LGR) to consolidate areas with two tiers of local government – county and district councils – into unitary authorities. In addition, 19 existing unitary authorities have been invited to reorganise. Naturally such reorganisations will have consequences for the various services those councils deliver, from adult and children’s social care and homelessness to planning and waste collection.

Children’s social care 

The government is introducing ‘regional care cooperatives’ to the children’s social care sector. ¹⁰³ Department for Education, ‘Regional care cooperatives policy statement’, GOV.UK, 4 February 2026, retrieved 24 March 2026, www.gov.uk/government/publications/regional-care-co-operatives-pathfinder-areas/regional-care-cooperatives-policy-statement  These will sit above local authorities and will plan and commission children’s social care, with the intention of acting as a counterweight to the disproportionate market power held by providers.

Police

The Home Office has announced that it will create a National Police Service (NPS), bringing together Counter Terrorism Policing (CTP), the National Crime Agency (NCA), and Regional Organised Crime Units (ROCUs). It also intends to shrink the number of police forces from 43 to a yet-to-be-determined number. 

The criminal justice system

Among the most large-scale reforms the government is pursuing is in the courts, where it is creating a new division within the crown court, the Crown Court Bench Division. ¹⁰⁴ Ministry of Justice and HM Courts and Tribunals Service, ‘Courts and Tribunals Bill: factsheet’, GOV.UK, 9 March 2026, retrieved 24 March 2026, www.gov.uk/government/publications/courts-and-tribunals-bill/courts-and-tribunals-bill-factsheet#crown-court-bench-division  This will hear cases likely to result in a custodial sentence of two to three years with a judge only, replacing the jury trials that currently take place for all crown court cases. The government also plans to shift a large number of cases out of the crown court altogether, moving them into magistrates’ courts.

Schools

The government has announced that it will require all state schools to join or be part of trusts – aiming to complete a process of academisation that started under the New Labour government and was accelerated under the coalition and Conservative governments, albeit with councils now given the power to establish their own trusts.

Ministers are favouring structural reorganisations

The bias towards structural reforms likely occurs for several reasons. 

Ministers have expressed frustration with the slow progress of improvements in many services. ¹⁰⁶ Thomas A, Dunlop H, and Grama T, ‘A reset squandered: the civil service in Labour’s first year’, blog, Institute for Government, 30 June 2025, https://www.instituteforgovernment.org.uk/comment/one-year-labour-civil-service  It is easy to see structures as the cause of that delay.

Reorganisations are straightforward and more visible compared to other reforms. Action follows decisions relatively quickly: new organisations are created and old ones abolished; people change jobs and titles. Ministers can point to new structures as progress. In contrast, the difficult work of shifting NHS care into the community or improving productivity in the courts is complex, slow, and often invisible work.

Reorganisations are attractive when money is tight, as is the case now. Other initiatives – hiring new staff, investing in the estate, or spending on preventative services – all require large amounts of additional funding. In contrast, restructures are relatively cheap. Indeed, many are launched with the express intent of saving money over the longer-term, as discussed below.

In short, it does not seem to be a coincidence that ministers have launched many services into large reorganisations. 

Structural reforms can be necessary, and useful. But there is nothing inherently valuable about them. New structures may not solve the deeper problems with services and, worse, can distract from the reforms that would solve those more fundamental issues. No structure is ever perfect and the public bodies that emerge from these various reforms will inevitably be flawed in different, perhaps unforeseen, ways.

Some reforms will see existing local bodies merged into larger organisations

In three reorganisations (the police, local government and the NHS), ministers have chosen to bring smaller organisations together to create fewer bodies spread over larger areas. The net result of LGR will be fewer but larger local authorities. The NHS’s 42 integrated care boards (ICBs) will become 26. There will be ‘significantly’ fewer police forces. ¹¹⁷ Home Office, ‘From local to national: a new model for policing’, GOV.UK, 27 January 2026, retrieved 24 March 2026, www.gov.uk/government/publications/from-local-to-national-a-new-model-for-policing/from-local-to-national-a-new-model-for-policing-accessible

The government has various arguments for each of these reorganisations. The police reform white paper offers five reasons for consolidating forces, including cost savings from fewer back-office staff and reducing variation in quality of services. ¹¹⁸ Home Office, ‘From local to national: a new model for policing’, GOV.UK, 27 January 2026, retrieved 24 March 2026, www.gov.uk/government/publications/from-local-to-national-a-new-model-for-policing/from-local-to-national-a-new-model-for-policing-accessible  

In the case of local government, the government claims that unitary authorities deliver better outcomes, save money and improve accountability by reducing the number of politicians in a local area. ¹¹⁹ Ministry of Housing, Communities and Local Government, English Devolution White Paper: Power and partnership: Foundations for growth, GOV.UK, 16 December 2024, retrieved 24 March 2026, www.gov.uk/government/publications/english-devolution-white-paper-power-and-partnership-foundations-for-growth/english-devolution-white-paper

The new, larger ICBs are to become “lean and agile and to cut duplication of functions with providers” with the aim of delivering efficiency savings. 

Most will be controlled from the centre

Reforms in some key services give the relevant secretaries of state more direct power.

The abolition of NHSE will bring operational control of the service back into the DHSC for the first time in over a decade. The health secretary, Wes Streeting, has launched a performance management framework which gives the secretary of state the power to punish poorly performing trusts by dismissing senior staff or shifting responsibility for a function or service to another organisation. ¹²⁰ NHS England, ‘NHS Performance Assessment Framework’, ENGLAND.NHS.UK, 27 March 2025, retrieved 24 March 2026, p.13, www.england.nhs.uk/wp-content/uploads/2025/03/6-the-nhs-performance-assessment-framework-annex.pdf

The police white paper includes similar proposals. It suggests a performance framework with priorities decided in the Home Office and a new legal duty that compels police forces to comply. ¹²¹ Home Office, ‘From local to national: a new model for policing’, GOV.UK, 27 January 2026, retrieved 24 March 2026, p.57, https://assets.publishing.service.gov.uk/media/69779267276692606c013862/260125_White_Paper.pdf  Poorly performing forces will be subject to increased intervention from the Home Office, ranging from the introduction of ‘turnaround teams’, to the home secretary dismissing chief constables in ‘extreme cases of leadership failure’. ¹²² Home Office, ‘From local to national: a new model for policing’, GOV.UK, 27 January 2026, retrieved 24 March 2026, p.7, https://assets.publishing.service.gov.uk/media/69779267276692606c013862/260125_White_Paper.pdf

At a smaller scale, the Department for Education (DfE) is also seeking more control over schools. The government will now mandate that all state schools teach the national curriculum, where previously academies have been exempt, ¹²³ Brader C, ‘Academy schools: Government plans for change’, House of Lords Library, 20 January 2025, https://lordslibrary.parliament.uk/academy-schools-government-plans-for-change/  and will also increase the range of options available for intervention in an academy that the DfE deems to be failing. ¹²⁴ Department for Education. ‘Children’s Wellbeing and Schools Bill: Policy summary notes’, January 2026, retrieved 24 March 2026, p.137, https://assets.publishing.service.gov.uk/media/695e578a8ab0677c14afdfc9/childrens_wellbeing_and_schools_bill_2024_policy_summary_notes.pdf

The government is similarly giving itself some lesser powers in children’s social care and SEND, for example the power to cap the profits of certain providers of children’s social care and to refuse the opening or expansion of independent special schools.
The overall consequence of these reforms is to draw powers into Whitehall and onto the desks of secretaries of state.

Money is being allocated more effectively

The way that the last government allocated funding to services made it much harder to deliver services. They relied on single-year funding settlements for services and provided funding in an increasing number of small, ring-fenced pots of money, which often required local areas to bid for them. That resulted in poor value for money as services were unable to plan spending more than a few months in advance or to spend money where they saw fit. 

To its credit, this government has taken a much better approach. This starts at the top: in 2025, the government published the first multi-year spending review since 2021. That has flowed to frontline services. For the first time since 2016, the government provided local authorities with a funding settlement that covers more than one year. ¹²⁵ Hoddinott S and Dellar A, Public Services Performance Tracker 2025: Local government overview, Institute for Government, October 2025, www.instituteforgovernment.org.uk/publication/performance-tracker-2025/local-services/overview  In the NHS, it has also set out goals and funding for three years. ¹²⁶ NHS England, ‘Medium Term Planning Framework delivering change together – 2026/27 to 2028/29’, ENGLAND.NHS.UK, 24 October 2025, retrieved 24 March 2026, www.england.nhs.uk/wp-content/uploads/2025/10/medium-term-planning-framework-delivering-change-together-2026-27-to-2028-29.pdf

The government is trying to reduce some direction from the centre. It has reduced tightly ringfenced pots of money it allocates local authorities, and reduced the number of targets in the NHS. Both allow local areas more flexibility to set direction.

Finally, in local government, it has launched the Fair Funding Review 2.0 – an exercise which rebalances existing funding towards the more deprived local authorities that have lost out in relative terms since 2010. That is a welcome decision and should more closely match funding with need for services.

Devolution, Integration, Prevention?

At the 2025 spending review, the government said its approach to public service reform would be guided by three principles: to devolve more power, to better integrate services, and to shift to prevention. We look at each of these here.

Devolution: reforms will mostly reduce local decision making

In the 2025 spending review, the government said that it aims “to devolve power to local areas that understand the needs of their communities best, with services that are designed with and for people”. ¹³⁶ HM Treasury, Spending Review 2025, CP 1336, The Stationery Office, June 2025, p.27, https://assets.publishing.service.gov.uk/media/68627094354985706f111adc/E03349913_HMT_Spending_Review_June_2025_TEXT_CS_Accessible__002_.pdf  There are three ways these reforms run contrary to those aims. 

More power in Whitehall

The first is handing additional powers back to (some) secretaries of state. Ministers will be able to remove NHS and police leaders they deem to be underperforming. They will set tighter criteria for what constitutes good performance in those services, as well as youth justice, overriding priorities local leaders might have. 

At the start of 2026, Keir Starmer argued that “levers” in Whitehall do not work, expressing a sense of helplessness. ¹³⁷ Whannel K, ‘Politicians have given away too much power to deliver pledges, says PM's ex-aide’, BBC, 2 January 2026, retrieved 24 March 2026, www.bbc.co.uk/news/articles/c75x6ew929po  Wes Streeting’s response to this was that “where there aren’t levers, we build them.” ¹³⁸ Elgot J and Mason R, ‘Wes Streeting attacks centre-left for ‘excuses culture’ of blaming civil service’, The Guardian, 13 January 2026, retrieved 24 March 2026, www.theguardian.com/politics/2026/jan/13/wes-streeting-excuses-culture-blaming-civil-service  Streeting and his colleagues are certainly ‘building levers’ across Whitehall, but those mostly pull towards Whitehall. 

Not all new powers for departments are necessarily a mistake. Sometimes it is right to draw power and authority into the centre to redistribute it in a different way. But in pursuing these reforms, ministers need to be more cognisant than they appear to be of the effect this has on other stated aims for services as discussed in more detail below.

Fewer, larger bodies

The second way the government’s reforms run contrary to its stated aims is the consolidation of subnational organisations. A smaller number of local authorities, ICBs and police forces working across larger geographies pulls decision making further from people’s lives. Looking at recent NHS history, the service will have moved from 106 clinical commissioning groups (CCGs, the precursors to ICBs) with an average population of just over 500,000 in 2021 ¹³⁹ NHS Confederation, ‘What were clinical commissioning groups?’, NHSCONFED.ORG, 17 August 2021, retrieved 24 March 2026, www.nhsconfed.org/articles/what-are-clinical-commissioning-groups  to 26 ICBs with an average population of 2.3 million in 2027. It will almost certainly be harder for staff in those ICBs to understand the needs of their much larger populations than their counterparts in CCGs, particularly after heavy cuts to ICB staff. 

Fewer local staff

Third, proposed cuts to managerial, administrative and analytical staff will weaken local decision making. Those are the staff who are best placed to understand local need and then design services to suit that need. Reducing local capacity – from already inadequate levels – will further weaken decision making. The long-term effect will be reduced allocative efficiency and therefore worse value for money for the government. 

The government might argue that its ‘neighbourhood health service’ and ‘integrated health organisations’ in the NHS and its ‘local policing areas’ put more decision-making power near the frontline. Perhaps – though the details of these new NHS organisations are still very unclear and the government will not launch neighbourhood contracts until 2027/28 at the earliest. ¹⁴⁰ Tilley C and West D, ‘No neighbourhood provider contracts for another year’, Health Services Journal, 12 February 2026, retrieved 24 March 2026, www.hsj.co.uk/primary-care/no-neighbourhood-provider-contracts-for-another-year/7041077.article  In the police, local policing areas will be underpowered, led by mid-ranking officers with priorities coming directly from the home secretary.

The government is justifying these reforms as ways to increase democratic accountability and save money. The case is unproven on both those points, and it is hard for ministers to argue that any of these reforms meaningfully fulfil the government’s aim to devolve power to local areas.

But more flexibility for local areas

The longer-term funding settlements, increased financial flexibility and fewer targets described above tend to improve local decision-making. All those measures give service leaders more discretion than under the previous government’s approach. 

Integration: services will consolidate slowly this parliament – if at all

The government’s declaration that it wants to focus on the integration of services is welcome. The potential benefits – for the government and citizens – are huge. 

Previous work by the Institute for Government shows that in the places that integration has worked, it has relied upon excellent leadership and strong relationships between people in different services. ¹⁴¹ Glover B, Liberated public services: a new vision for citizens, professionals and policy makers, Demos, May 2024, p.31, https://demos.co.uk/wp-content/uploads/2024/05/Taskforce-Vision-Paper_May.pdf  These are normally built up over years. Structural reorganisations mean that people will either leave or move jobs, potentially destroying those relationships overnight.

It is not just the dismantling of relationships that will make integration more difficult. Structural reorganisations mean that leadership attention will turn inwards for at least the next few years as leaders shape new organisations. There will be little time to think strategically about how to work effectively with local partners.

Larger geographies will make integration harder still

As well as pulling against more local decision making, larger geographies might also make it harder to integrate services. Integration is often driven by a shared desire to solve a specific, localised problem. Those problems become less apparent and less pressing when services work across larger areas, weakening the impetus for shared endeavour. 

Mismatched geographies will also make integration more difficult. Staff working in local authorities often found it easier to work with the NHS when the local organisation was a CCG, because the CCG had a smaller geographic footprint that more closely matched their own. In contrast, ICBs must spread their attention thinly across more local authorities – and this problem will only worsen under the government’s proposed 26-ICB structure under which there will be nearly six local authorities for each ICB. The same argument holds for police force consolidation. 

We acknowledge that not all reforms push against integration. The government’s place-based budgeting pilots announced at the October budget, for example, attempt to draw services closer together by encouraging them to assess how best to spend across all services that operate in a local area. But relatively small initiatives like this are pushing against a relentless tide of structural reorganisations emanating from departments.

There is an opportunity to better align services, though this will take longer

There is an opportunity in such widespread reforms. Integration is more difficult when services’ boundaries do not perfectly overlap, as is the case under the present system. The government could improve integration by using the concurrence of its various structural reorganisations to align police, NHS, local government and mayoral strategic authority (MSA) boundaries across England. At present, this is not happening. Departments seem to be deciding new ICB, local authority, MSA, and police force borders independently, meaning that the future system may end up as incoherent as the current one. 

As a priority, the government should ensure that there is alignment between its various structural reorganisations, even if this requires reviewing the timetables for finalising reforms across all these services. Achieving a more coherent, aligned set of subnational organisations in public services would be a significant achievement.

If these structural reorganisations are effective in the longer term, they might improve integration once concluded and when new relationships between organisations develop. But this will not happen quickly and the benefits are highly uncertain. The choices the government has made will mean that integration only happens – if at all – in the next parliament or beyond.

Prevention: there are few strong signs of a more preventative approach

Under the previous government, services became more focused on the acute end of delivery while preventative areas were starved of funding. The result is a set of services that provide more expensive and less effective support. 

It is hard to measure the government’s progress towards its prevention aim – partly because it has not been clear about its priorities (or even defined what it means by prevention) and partly because the benefits of prevention can take years to materialise. In lieu of observing changes in long-term outcomes, we can look at the imperfect proxy of where the government is focusing its spending. 

In simple terms, increasing funding for services that are broadly preventative faster than for more acute services – a reversal of recent trends – would imply that it is prioritising prevention.

On that account, the current government’s record has been mixed. In local government, the government has created some ringfenced pots of money for prevention, including for homelessness. That is a welcome first step, but the government should go further. We have argued for a broad ringfence around all preventative spending, which would protect that money from being raided to fund acute pressures but would allow local areas to shift spending to where they see fit. 

Another positive decision is the government’s movement towards longer-term funding settlements in the NHS and local government, with an announcement of similar intentions for youth justice. Greater clarity on long-term income encourages investment in preventative initiatives.

The picture on NHS spending is of more concern. Taking prevention seriously in that service will require a rebalancing of funding away from acute hospital trusts towards primary care, mental health, public health, community care, and adult social care. But announcements about how the NHS intends to allocate funding diverge from that commitment. The NHS’s planning document for 2026/27 shows that it expects funding for community services to increase in line with demand, at 3% in cash terms, ¹⁴² West D, ‘Exclusive: NHS failing to honour £1bn funding deal’, Health Services Journal, 26 January 2026, retrieved 24 March 2026, www.hsj.co.uk/policy-and-regulation/exclusive-nhs-failing-to-honour-1bn-funding-deal/7040954.article  while funding for general practice will increase by 3.6% in cash terms. ¹⁴³ NHS Confederation, ‘GP contract 2026/27: what you need to know’, NHSCONFED.ORG, 24 February 2026, retrieved 24 March 2026, www.nhsconfed.org/publications/gp-contract-202627-what-you-need-know

Both are well below the 4.8% cash terms increase in NHSE’s budget between 2025/26 and 2026/27, ¹⁴⁴ HM Treasury, Spending Review 2025, CP 1336, The Stationery Office, June 2025, p.48, https://assets.publishing.service.gov.uk/media/686270a608bf2f53761219fc/E03349913_HMT_Spending_Review_June_2025_TEXT_PRINT_CS.pdf  implying that other parts of the service (most likely acute hospitals) will receive larger relative increases in funding. So, on that simple metric, it is not obviously rebalancing towards prevention, on funding at least.

The government has not made a coherent case for its reforms

The Starmer government is approaching the halfway point in its first parliamentary term, so it is possible to take a view on what impact the reforms described above are likely to have on the state, and the organisations that serve it. Realising its vision of a more devolved state, with better local integration, and in which prevention is placed at the heart of services would be a major achievement for the government. And it deserves credit for recognising that the way that services are currently delivered often does not address citizens’ underlying needs, leading to low satisfaction and poor value for money. 

However, it is not clear whether the changes so far introduced will support these aims, and some risk actively frustrating them. 

The centre of government has failed to effectively coordinate reform programmes

It seems that secretaries of state have unilaterally ploughed ahead with their own reform programmes without coordination at the centre. That is most obvious in the various structural reforms. The incoherence of the proposed system shows how little thought there has been across government about how structures will support ministers’ stated ambitions to devolve decision making and improve integration.

But it is not just structural reforms which lack coordination. The government has launched or continued a dizzying range of programmes. A non-exhaustive list includes family hubs (DfE), ¹⁶⁷ Department for Education, ‘Family hubs: Local support and advice for children and their families’, blog, GOV.UK, 10 January 2024, retrieved 24 March 2026, https://educationhub.blog.gov.uk/2024/01/family-hubs-everything-you-need-to-know/  young future hubs (DCMS), ¹⁶⁸ Department for Culture, Media and Sport, ‘Young future hubs: guidance’, GOV.UK, 9 December 2025, retrieved 24 March 2026, www.gov.uk/guidance/young-futures-hubs  youth hubs (DWP), ¹⁶⁹ UK Government, ‘Supporting Youth Hubs’, BUSINESS.GOV.UK, 19 March 2026, retrieved 24 March 2026, www.business.gov.uk/campaign/recruit-with-jobcentreplus/recruit-with-jobcentreplusyouth-hubs/  neighbourhood health centres (DHSC), ¹⁷⁰ Department of Health and Social Care, ‘Chancellor to double down on drive to cut NHS waiting times and rollout of new Neighbourhood Health Centres’, press release, GOV.UK, 24 November 2025, retrieved 24 March 2026, www.gov.uk/government/news/chancellor-to-double-down-on-drive-to-cut-nhs-waiting-times-and-rollout-of-new-neighbourhood-health-centres  Community Help Partnerships (Cabinet Office), ¹⁷¹ HM Treasury, Spending Review 2025, CP 1336, The Stationery Office, June 2025, www.gov.uk/government/publications/spending-review-2025-document/spending-review-2025-html  and Pride in Place (MHCLG). ¹⁷² Ministry of Housing, Communities and Local Government, ‘What is Pride in Place?’, press release, GOV.UK, 10 November 2025, retrieved 24 March 2026, www.gov.uk/government/news/what-is-pride-in-place  All of these are being run with good intentions and address genuine problems, indeed often the same ones. But often, they are all trying to do roughly the same thing. 

From a local perspective, services experience these programmes as a baffling flurry of funding streams, acronyms, and confused priorities. Worse, there is a sense of weariness, with local partners seeing these as yet another round of pilots that will never go anywhere and from which central government will never learn lessons. 

The government is failing to coordinate reforms that are already happening. But there is also a lack of coherence from reforms that are not happening. It is illogical for the government to reform the NHS and local government without a plan for how it intends to reform adult social care.

The blame for this failure sits at the centre of government. History shows that prime ministerial engagement is normally a prerequisite for cross-government reforms to work. For example, Gordon Brown drove the introduction of public service agreements (PSAs) under the last Labour government. Those – initially at least – set out 30 defined priorities that cut across government departments. So far, any similar form of coordination has been lacking.

Cutting ‘back-office’ staff is often a false economy

The government’s common argument for police, the NHS and local government reforms – and, albeit less directly, to children’s social care – is that fewer organisations will result in savings by removing duplication and cutting the number of administrative, managerial and analytical staff at a local level. 

The appeal is obvious but there are pitfalls for the government with this approach. Far from being slowed down by bloated middle management, most services already have too few ‘back office’ staff. For example, the NHS has fewer managers compared to both historic levels and to other industries. Across the entire economy, roughly 11% of staff are managers, compared to fewer than 3% in the NHS. ¹⁷³ Hoddinott S, Performance Tracker 2023: Hospitals, Institute for Government, October 2023, retrieved 24 March 2026, www.instituteforgovernment.org.uk/publication/performance-tracker-2023/hospitals#the-ratio-of-managers-to-staff-is-lower-than-before-the-pandemic  The number of managers for every non-managerial member of NHS staff fell by almost a quarter between September 2009 and December 2025 (23.8%). ¹⁷⁴ NHS England, ‘NHS Workforce Statistics - December 2025’, ENGLAND.NHS.UK, 26 February 2026, retrieved 24 March 2026, https://digital.nhs.uk/data-and-information/publications/statistical/nhs-workforce-statistics/december-2025

Data is poor in local government, but there is evidence that local authorities cut ‘back-office’ staff heavily in response to cuts in grant funding during the 2010s. ¹⁷⁵ Comptroller and Auditor General, The impact of funding reductions on local authorities, National Audit Office, 2014, p.20, www.nao.org.uk/wp-content/uploads/2014/11/Impact-of-funding-reductions-on-local-authorities.pdf  In the police, there are substantial bottlenecks in forensics – especially digital forensics – due to a lack of support staff.

Employing fewer people will mean that the government spends less money on salaries. And a smaller number of staff could in some instances deliver the same results. Having a single payroll system and rationalised accounting team in a new unitary authority, compared to multiple across district councils, will likely save money. 

It is wrong, however, to assume that all cuts to back-office staff will lead to better overall use of resources. The government risks making the common mistake of assuming that all work done by those staff can be consolidated without losing some quality or capacity. That is not the case. For example, staff in analytical roles conduct work such as demand forecasting, evaluating programmes, and modelling the effects of proposed policy. Cutting those staff will mean organisations do less analysis than they did before, or carry out the same amount with less detail. 

The same goes for managerial staff. Management in public services is a role that politicians consistently either undervalue or actively rile against. In reality, managers are vital. They oversee extremely complex systems and are responsible for deciding how to allocate hundreds of billions of pounds of taxpayers’ money – a skill which is even more important when money is tight. Our 2023 report The NHS productivity puzzle showed that, despite then recent surges in numbers of frontline staff in the NHS, undermanagement was one of the primary reasons for continued low productivity in hospitals since the pandemic. ¹⁷⁶ Freedman S and Wolf R, The NHS productivity puzzle: Why has hospital activity not increased in line with funding and staffing?, Institute for Government, 13 June 2023, p.42, www.instituteforgovernment.org.uk/publication/nhs-productivity

In short, few services can afford further cuts to their managerial staff. And the greater risk is that any cuts made now may end up being a false economy – saving cash in the short-term but resulting in lower productivity over the longer term. 

NHS reforms in particular were poorly planned

There are good arguments for abolishing NHSE: functions are duplicated between NHSE and DHSC, lines of accountability between those organisations and the frontline are confusing. But the government’s approach to implementing the abolition has been poor. From the start, the decision to abolish NHSE seemed more reactive than proactive, with headcount cuts decided too quickly to be justified by serious analysis. 

The government has belatedly clarified some of its reasoning. ¹⁷⁷ Dayan M, Reed S, Davies N and others, Abolished to perfection? Building a better centre for the NHS, Nuffield Trust and Institute for Government, December 2025, p.9, www.instituteforgovernment.org.uk/sites/default/files/2025-11/building-better-centre-nhs.pdf  However, even if the abolition now continues smoothly (and declining staff engagement survey results in DHSC ¹⁷⁸ Cabinet Office, ‘Civil Service People Survey 2025 - Results Highlights’, GOV.UK, 26 February 2026, retrieved 24 March 2026, www.gov.uk/government/publications/civil-service-people-survey-2025-results/civil-service-people-survey-2025-results-highlights  and in ICBs ¹⁷⁹ Health Services Journal, ‘ICB morale plummets amid restructures’, HSJ.CO.UK, 13 March 2026, retrieved 24 March 2026, www.hsj.co.uk/policy-and-regulation/icb-morale-plummets-amid-restructures/7041263.article  do not bode well), it is not clear it will help the government deliver its objectives. There is no explanation of why a reformed centre or fewer ICBs means the NHS will become more preventative, or will help shift care into the community. Instead, there is a real risk the service continues with the status quo or focusing on acute care in large hospitals.

The government took more time and care to justify its police reforms. The home secretary has outlined a clear and coherent set of police structures and a theory of change, which should address some of the overlaps and inconsistency in the current system, particularly as regards accountability and poor trust. Similarly, the current school system – with schools split between local authorities and academy trusts – is something of a mess, with different funding mechanisms, and policy and regulation required for two different structures. Moving to a unified system makes sense. 

Structural reorganisations can be a distraction and affect morale

Regardless of their merits, these reorganisations will take a toll on the government’s other – arguably more important – priorities for public services. Reorganising a national public service is time-consuming.

The NHS’s reorganisation is due to finish in April 2027, ¹⁸⁰ Kituno N, ‘DHSC-NHSE merger timetable revealed’, Health Services Journal, 27 January 2026, retrieved 24 March 2026, www.hsj.co.uk/workforce/dhsc-nhse-merger-timetable-revealed/7040985.article  though that makes the optimistic assumption that legislation will pass rapidly through parliament. For LGR, the government predicts that all areas will have a new unitary authority by April 2028, but previous Institute for Government research has shown that there has been a long tail of work from previous such reorganisations that has been disruptive for years afterwards. ¹⁸¹ Fright M, Reorganising district councils and local public services: options and challenges, Institute for Government, 17 September 2025, retrieved 24 March 2026, www.instituteforgovernment.org.uk/publication/reorganising-district-councils-public-services  That means years of disruption for the services they run. The new bench division in the crown court won’t be up and running until 2028/29, the last year of this parliament. And police reform is due to finish by the end of next parliament, with one pilot merger in this. 

Staff across these services will therefore spend most of this parliament focusing on the difficult and time-consuming work of restructures, rather than other priorities. Many – such as those working in NHSE or current ICBs in the NHS ¹⁸² Department of Health and Social Care, Prime Minister’s Office, 10 Downing Street, The Rt Hon Sir Keir Starmer KCB KC MP and The Rt Hon Wes Streeting MP, Fit for the Future: 10 Year Health Plan for England, CP 1350, The Stationery Office, 3 July 2025, www.gov.uk/government/publications/10-year-health-plan-for-england-fit-for-the-future/fit-for-the-future-10-year-health-plan-for-england-executive-su…  – will be doing this while also working out if they will still have a job once that work is done. 

Ministers should not overlook this last point, no matter how encouraging their cost-benefit analyses seem. Restructures have a negative impact on staff motivation. There is already evidence of this in the NHS. The DHSC had the largest drop in staff engagement between 2024 and 2025 among Whitehall departments (from 63% to 57%), as well as the largest decline (13-percentage points) for the “leadership and managing change” theme. ¹⁸³ Cabinet Office, ‘Civil Service People Survey 2025 - Results Highlights’, GOV.UK, 26 February 2026, retrieved 24 March 2026, www.gov.uk/government/publications/civil-service-people-survey-2025-results/civil-service-people-survey-2025-results-highlights  Morale also dropped in all 19 ICBs that completed the NHS staff survey in 2025.  ¹⁸⁴ Health Services Journal, ‘ICB morale plummets amid restructures’, HSJ.CO.UK, 13 March 2026, retrieved 24 March 2026, www.hsj.co.uk/policy-and-regulation/icb-morale-plummets-amid-restructures/7041263.article

There is a balance to be struck. It is welcome that the government is making changes that it thinks will benefit services over the long run. But it should also be aware that these choices may make delivery of other targets – for example, meeting the NHS’s target for elective waiting times before the next election – more difficult to achieve. Time and attention are scarce resources, and this government is choosing to spend a lot of both on reorganisation, often without a clear rationale for how structural changes will support the delivery of their substantive goals.

The government’s wider approach to public bodies remains unclear

A feature of the Labour manifesto was the promised creation of many new public bodies – from the National Wealth Fund to Skills England. ¹⁸⁵ Chivukula S, Gill M and Howes D, Tracker: The government’s proposed new public bodies, Institute for Government, 22 December 2025, retrieved 24 March 2026, www.instituteforgovernment.org.uk/explainer/public-bodies-tracker  In the run up to the 2024 general election, proposing new and – by implication – better public bodies seemed to be an easy answer to difficult policy problems and trade-offs otherwise ducked throughout the campaign.

In government, Labour’s approach to public bodies, new or existing, has been more circumspect. It has created new bodies, though as of March 2026 few are fully formed and operational, like the Infected Blood Compensation Authority and GB Energy – Nuclear. Others are still works in progress (the Fair Work Agency), firmly on the back burner (the National Care Service), or have been abandoned (the Audit and Reporting Governance Authority). ¹⁸⁶ Gill M, ‘The government is wrong to ditch plans for the Audit and Reporting Governance Authority’, blog, Institute for Government, 2 February 2026, retrieved 24 March 2026, www.instituteforgovernment.org.uk/comment/audit-reporting-governance-authority

Its approach to existing bodies has been controlling at best, and at times outwardly hostile. Like others before it, the desire for direct ministerial control has tended towards an anti-quango rhetoric that risks ill-planned knee-jerk decisions. ¹⁸⁷ Gill M, ‘Not another bonfire of the quangos…’, blog, Institute for Government, 10 April 2025, retrieved 24 March 2026, www.instituteforgovernment.org.uk/comment/pat-mcfadden-not-another-bonfire-quangos  What is clear is that the abolition of NHSE, or the streamlining of local authorities and the police, are not part of any grand plan to remake the state and have been pursued without a consistent blueprint for doing so or even, as the Institute has advocated, a robust approach to making case by case decisions. ¹⁸⁸ Gill M and Dalton G, When should public bodies exist?: Rewriting the 'three tests' for when government does things at arm’s length, Institute for Government, 12 July 2023, www.instituteforgovernment.org.uk/publication/public-bodies-tests

Conclusion 

The Starmer government’s large parliamentary majority gives it an opportunity to radically reshape public services to better meet the needs of the public and to spend taxpayers’ money more effectively. And, as it approaches the halfway point of its first parliament, it has correctly diagnosed the problems and set out high level principles of public service reform that will, in time, help to address them.

But there is a mismatch between its stated aims and how departments are driving change. Despite extensive interdependencies between services, there seems to have been little centralised thinking about how reform programmes will coalesce into a set of services that are more devolved, integrated and preventative.

Making a change now requires the centre to grip the government’s disparate reform programmes. That must happen as close to the prime minster as possible – it should be led by Darren Jones in his role as Starmer’s chief secretary, with the public services cabinet committee as a logical forum for coordination.

The centre also needs to define its priorities to give a clear framework under which departments and ministers can make trade-offs between approaches. A strategy requires making choices, and No.10 will need to take a view on many complicated ones, including but not limited to:

• Is it most important to ensure that services are better integrated – or should departments unilaterally move ahead with improving performance in areas like waiting times for elective care, or improving school readiness regardless of broader concerns?
• If improving school readiness is the government’s primary goal, how should DCMS, DfE, DHSC, and other departments work together to create a coherent reform programme? 
• Should departments be able to reshuffle organisations to improve long-term performance, even if it slows improvement in this parliament? 

Our assessment is that by the end of this parliament – on the government’s current trajectory - public services will be more centralised, integration will have slowed, or even reversed, and that a measurable shift towards prevention will not have occurred. This would be a failure on its own terms, and would add up to an historic missed opportunity for a government that has devoted so much energy to public service reform.