Policy Hub
A report released by the National Audit Office (NAO) on 18 March 2010 finds that between May 2005 and June 2009, there were over 90 reorganisations to central government, none of which could demonstrate value for money, given that most had vague objectives and costs and benefits were not tracked.
The average annual cost of such reorganisations is almost £200 million, around 85% of which is attributable to the reorganisation of arms length bodies. Since 1980, 25 central government departments have been created, including 13 which no longer exist. By comparison, in the United States, only two new departments have been created over the same period.
The report contends that central government bodies are weak at identifying and securing the benefits they hope to gain from reorganisation. There is no standard approach for preparing and assessing business cases setting out intended benefits against expected costs. By not identifying anticipated benefits clearly, public bodies run the risk of carrying out reorganisations unnecessarily. More than half of reorganisations do not compare expected costs and benefits of alternative options, so there can be no certainty that the chosen approach is the most cost effective.
The report concludes that a more deliberate and carefully planned process should be adopted before huge costs are incurred. It also calls for a slow down in the rate of change.