I read with amazement the admission by Cabinet secretary Sir Gus O’Donnell that it was ‘too early’ to tell how much the creation of the Department for Business, Innovation & Skills had cost and that he was ‘hopeful in time that it will be negative because we will have some synergies’.
At face value, this seems to imply that no financial analysis of such a major Whitehall restructuring was ever undertaken and that there are no budgets to control the costs of the restructuring process.
It appears that where ministerial egos are concerned, any consideration of the best use of taxpayers’ money goes out of the window.
Let us imagine a hypothetical local authority carrying out a major restructuring without any consideration or budgetary control of the costs involved. Critical comments would have poured out of Whitehall, MPs, the Audit Commission, the Public Accounts Committee, the media and so on.
However, when it comes to central government restructurings, it appears that no such rules apply.
No wonder there are major financial problems in a huge range of central government projects, such as the 46% overspend on IT projects by the Department for Environment, Food & Rural Affairs and the Department of Health’s £1.76bn overspend on implementing the General Medical Services contract for GPs. It seems that basic financial planning and control do not exist.
Next time local government gets lectures from central government on matters such as cost control and efficiency, councils should point out that there are 175 billion reasons why central government should get its own house in order first, ie, the £175bn projected UK government borrowing requirement this year.
Malcolm Prowle, Nottingham Business School
