The most important department of the Coalition: the Cabinet Office

Two months into Britain’s ongoing political experiment, the Cabinet Office is fast emerging as the most important department in Whitehall and the one for interims to watch.

In past years, the department has not always had the opportunity to flex its muscles, despite the fact that it acts as an extension of Downing Street (both politically and physically), however much is changing.

A focus on efficiency and value for money
With the government embarking on the deepest and most sustained spending cuts since the Second World War, Francis Maude (Minister of State) has been given a direct mandate from David Cameron to cut and streamline central government. Mr Maude, emerging as a big beast of the government, co-chairs the new Efficiency and Reform Group, responsible for driving through £6.24 billion of efficiency savings in 2010. The Group is ‘assisting’ departments to deliver these savings in specific areas, including renegotiating contracts and maximising collective buying power.

In early July, the Group begun exploratory meetings with nineteen of the biggest government suppliers to ‘ask’ them what they could do to renegotiate costs. Other priorities that the Group has already started to deliver on include a freeze on non-critical civil service recruitment, including cutting the number of temporary staff. Also, there has been a focus on centralising procurement for commodity goods and services. One other area the Group will take up is implementing a programme to simplify HR functions across Whitehall and eradicate duplication. Non-critical spending on consultancy and advertising also falls under its remit. In addition, the department recently announced that the functions of the Office of Government Commerce and Buying Solutions (two major purchasing organisations for government) will be moving into the department. On ICT, the Group is implementing an immediate freeze on all new ICT spend above £1 million; and reviewing the biggest projects (also non-ICT projects) to assess where costs can be reduced and savings made.

Reforming how Whitehall works
Also important is the work the department is doing on reforming the corporate operations of Whitehall. It is developing the use of non-executive directors (from the commercial sector) who will sit on all departmental boards. Lord Browne (former BP boss) is the Government’s lead non-exec and will be leading this process from the Cabinet Office. Further change sees Labour’s Public Service Agreement regime scrapped (along with departmental annual reports). In future, all departments will publish rolling three-year business plans showing structural reforms to be implemented and how departments will ensure resources are best used following funding allocations from this October’s Spending Review.

The Government also wants to reform the Civil Service for the long-term, creating a flatter, more streamlined and effective Service, with a strong centre focused on achieving value for money and driving improvement in performance.

All of this work and thinking by the Cabinet Office will inevitably feed into the Spending Review process – Mr Maude (and Oliver Letwin – another Cabinet Office minister) is sitting on the new Public Expenditure Committee that will grill cabinet ministers on their spending bids. No doubt that announcement (due on October 20th) will result in even more efficiency saving work for the Cabinet Office into 2011.

Paul Thompson has worked as an interim for Veredus and is Managing Director of Cameron Alexander Public Policy