Rishi Sunak’s Whitehall shake-up could cost over £100m, says think tank

New Tory chairman defends cost and ‘fantastic’ appointment of Lee Anderson

Rishi Sunak’s sweeping shake-up of Whitehall which saw the creation of four new government departments could cost over £100m, a leading think tank has warned.

The prime minister announced the set-up of a new department for energy security and net zero, another for science and tech, while there are major changes at business and culture.

But the Institute for Government said the overhaul, the biggest reorganisation since Brexit, could amount to over £100m and take years to implement.

“This is a massive reorganisation of government,” director Hannah White told the FT, saying the changes should bring greater focus to key areas like science in the long-term.

Downing Street, which has not put on a cost on the shake-up, admitted the changes will not be a “silver bullet” to address the major problems facing the UK but said the moves have been worked on for some time.

Senior Tories questioned the political value of the move. “What’s the point of it,” one minister told The Times. “We’re not going to win an election by changing the machinery of government.”

Speaking to broadcasters, Mr Sunak insisted his reforms would have tangible benefits, claiming that the new energy department will “mean that we can reduce people’s energy bills”.

New Tory chairman Greg Hands – who replaced Nadhim Zahawi in the mini-shuffle – defended the cost of Whitehall reorganisation.

Put to him that it could cost £100 million, he told LBC: “The last time there was what’s called a machinery of government change was in 2016, now seven years ago. I think it is right that these things happen from time to time.”

Grant Shapps said he was “delighted” to head up the new Department for Energy Security and Net Zero, while Kemi Badenoch, who was international trade secretary, will now lead the joint Department for Business and Trade.

Lucy Frazer joins the cabinet as culture secretary in a diminished department, while Michelle Donelan moves from culture to the new Department for Science, Innovation and Technology.

Lee Anderson is new deputy chair (UK Parliament / Jessica Taylor / PA)

Mr Sunak has suffered a backlash after appointing right-wing MP Lee Anderson, the outspoken backbencher who has questioned whether people really need to use food banks, as deputy Tory chairman.

One former Tory minister told The Independent Mr Anderson would be a “walking embarrassment” in the job. Another Tory told Sky News that the red-waller is “everything that is wrong with the Conservative brand”.

But Mr Hands praised his party colleague, calling Mr Anderson a “fantastic asset” and someone with “great integrity”.

The Tory chairman told Times Radio: “Fantastic background, former coal miner and actually until, not that long ago, a member of the Labour Party and so he’s somebody I think who bring something different to the party and I think he and I will work very well together.”

It emerged that Mr Anderson wrote an article in 2016 – when he was still a Labour councillor – calling the Tories “ghastly” and stating: “They don’t truly understand working people and they never will.”

Mr Sunak continued to face questions about the future of deputy prime minister Dominic Raab, who remained in place after the reshuffle. Mr Raab is being investigated by senior lawyer Adam Tolley KC over bullying allegations.

One civil servant told BBC Newsnight last night that Mr Raab “behaved like a monster at times” and used “demeaning tactics to make himself the most powerful person in the room”.