Does Osborne have the stomach to put Whitehall on a diet?

The Chancellor looks set to put a few senior civil servants through their paces

George Osborne says Britain wants to ‘play a leading role within a reformed EU’ (Getty)

Government ministers are finally heading off on their holidays this week. Everyone in Westminster is rather exhausted – which also goes some way to explaining the bizarre Labour leadership contest – and in need of a break. Some MPs will be packing their suitcases with worthy books to relax with on the beach, while others plan to remind themselves of what their families look like after months of electioneering and adjusting to a surprise majority.

MPs even have their own special reading list, compiled each year by their colleague Keith Simpson, which includes relaxing tomes on Stalin and geopolitics. But some ministers won’t have much time for this sort of reading. They’ll still be bent over their books on the sun loungers this year, but those books will contain their departmental spending plans. They’ve got to come up with huge cuts in those budgets for George Osborne’s spending review, which will be published on 25 November.

The Chancellor has asked ministers to model cuts of 25 per cent and 40 per cent to unprotected departments by 2020. Overall, he says he needs to cut £20bn. Most secretaries of state suspect the 40 per cent cuts request is just a way of scaring them and making them grateful for whatever lower figure they end up settling for. They knew things were going to be difficult when Osborne announced in the July Budget that he would maintain defence spending at 2 per cent of GDP. The only sour faces on the Conservative side of the House that day belonged to ministers who weren’t lucky enough to have protected departments, and who now face even deeper budget cuts.

It’s not just ministers who are a little wary of the tricky times to come, though. Tory MPs recognise that local government already feels as though it has been stretched to the limit. Thus far the Tories have enjoyed the support of voters on reducing public spending, with few noticing a drop in the quality of services they access. But a senior Tory recently told me he feared the next spending review would see the end of that support because it will entail such big cuts that everyone would start to notice. His ministerial colleagues had reassured him that even if voters did find the next round of spending reductions unpalatable, they would have digested it by the time of the next election.

Ministers know they will have a miserable time choosing between spending areas that they really can’t do without, but will have to do without anyway. There isn’t much fat left to be trimmed. But there is one way the Chancellor could save a great deal of money. It would be to put Whitehall itself on a crash diet. Advocates of this diet, considerably more controversial than the 5:2 fasting regime that Osborne subjected himself to, call it Weight Watchers for Whitehall and claim that it could save £8bn a year.

This Weight Watchers regime would involve the abolition or mergers of several government departments. Currently there are 20 central government departments. Conservative MP Dominic Raab, now a minister in an unprotected department, proposed slimming that number down to just 11, which, he argued in a 2013 pamphlet for the Free Enterprise Group, would save £8bn a year. Raab recommended abolishing the Culture Department to save £0.7bn a year, the Government Equalities Office to save £47m a year, and the Business department to save £2bn a year. He also suggested merging the International Development Department with the Foreign Office at a saving of £2bn a year, merging the Home Office with the department in which he now serves, Justice, to save £1bn a year, merging the Energy and Environment departments to save £1.3bn a year and bringing together all the offices for the devolved administrations with the Communities and Local Government department to create a new Department for Devolved Affairs at an annual saving of £10m. The Treasury would also oversee a new Taxation and Payments Agency which would combine HMRC with the Work and Pensions department, saving £1bn. Raab wasn’t the only one keen on these changes: Ed Miliband also considered restructuring the way government works as he drew up plans for his reign as Prime Minister. And in 2013 the Local Government Association suggested merging six government departments into an England Office.

But there are a number of reasons why this diet, which sounds so attractive and easy, might not be one George Osborne adopts this autumn. The first is it is difficult to do well. Just as fad diets can lead to some unpleasant side-effects, so can changing the way government works. The Institute for Government was so worried before the election about the prospect of a hasty reorganisation it warned the parties of the cost of changing the structure of Whitehall without sufficient thought and with too much regard to politics, not policy.

That final point, about the politics, is important, too. It’s not just that closing a department dealing with climate change could quite easily be billed by the Government’s critics as a sign ministers no longer care about green issues. It’s also that every department provides gainful employment and distraction for around five MPs who might otherwise be moaning and grumbling on the backbenches. It is suspected, for instance, that Rory Stewart was offered a junior post in Defra mainly so he wouldn’t cause any more trouble as chair of the Defence Select Committee.

Osborne will have to weigh up the relative importance of upset colleagues against annoyed voters. But I understand there is considerable sympathy for these sorts of changes through all ministerial ranks, including from Cabinet ministers who are having to cut unprotected departments. In the meantime, those ministers will continue to pore over their books on the beach, wondering how on earth they might make everything stack up.