The government is committed to seeking better value for money, but an obvious source of common-sense savings has been ignored. There are 25 ministerial departments in the government, far more than is necessary; in 1980 the government had far more power, but there were only 18 departments. Many perform roles that ought to be within the remit of another department. Consolidating them would provide substantial efficiency savings with minimal political cost.
The clearest targets for consolidation are the Wales Office (WO), Scotland Office (SO) and Northern Ireland Office (NIO). The devolution of powers to regional governments has seen these departments become, in effect, the government body that works with their respective devolved governments. The Department for Communities and Local Governments does the same thing for other, far more numerous, devolved authorities. In 2015/16 the costs of running the WO, SO and NIO were £3.9 million, £12.4 million, and £19.7 million, a total of £36 million; the vast majority of this could be recouped by placing their roles into a new Communities and Local Governments department. Such a department could also be of service in promoting a coherent strategy for handling devolution at all levels.
Then we have the four departments tasked with our foreign policy. Of these, the Department for Exiting the European Union (DExEU) will presumably dissolve shortly after Brexit has occurred, saving the money used to run it. It is estimated that DExEU will cost up to £65 million a year. The Department for International Trade (DIT) and the Department for International Development (DFID) have roles that would be best performed by a single department that brings together all the foreign policy expertise of the civil service, like an expanded Foreign and Commonwealth Office. DIT has not yet published a yearly accounts, but it spends £26.5 million on contractors alone, and the annual costs of running DFID are given at £101 million: the efficiencies of merging them into the FCO would save much of this sum, and bringing together foreign policy expertise may even improve their efficacy
Closer to home, our industrial policy is effectively set by three departments: Business, Energy and Industrial Strategy (BEIS), the Department for Environment, Food and Rural Affairs (DEFRA), and the Department for Transport (DfT). Agriculture, fisheries and transport are industries populated by businesses, and so could fit into BIS’ remit, perhaps even making for a more integrated approach to our industries, and a transport system that better responds to the needs of businesses. The costs of operating DfT in 2015-16 were £372 million, and DEFRA in 2015-16 cost £351 million to run. A substantial fraction of this could be saved on top of the benefits of a more integrated approach to the business world, although a large fraction would still need to be spent on those specialist services the merged department would provide.
The savings from these consolidations, assuming even half the administrative costs are recouped, would run into the hundreds of millions. It wouldn’t close the deficit, but would be a fair step towards it. By bringing relevant expertise, the enlarged departments could well be more effective than the sum of their parts. What’s more, the consolidations would also demonstrate bold reformism and a commitment to seeking value for the taxpayers. A possibility worth considering.