7 February 2023

A new Science and Tech department is good news – but one crucial issue remains unsolved

By Jonathan Simons

‘It’s not what they talk about down the Rat and Parrot’, chuckled Chris Mason to Justin Webb this morning on the Today programme. Oh how niche, they laughed, to an audience of people who voluntarily listen to politics news at 7.40 in the morning.

I mean, of course, on the one hand they’re right. Reshuffles, and especially ‘machinery of government’ (MoG) changes don’t tend to set the world alight. As anyone who has watched a politics question on Pointless would tell you, not a lot that consumes Westminster passes the Rat and Parrot test.

But that doesn’t mean it isn’t important.

Reshuffles are needed for several reasons: to move the most effective people into the policy areas that count; to move out misfiring ministers; to deal with what could gently be called ‘personality’ issues; or to promote rising stars. You shouldn’t do them too often, but the risk is also the other way – that Prime Ministers shy away from difficult conversations and let areas of government ossify.

MoG changes are rarer because the hassle is greater. But doing them is based on the same question: as Prime Minister, how can you structure your resources (officials, budgets, ministers) behind the things you most want to get done. Because while government will always have silos, and there will always be institutional arguments between different bits of the state who want to achieve different things, the ideal is to not have a departmental break between different groups of people, or policy areas, who are all trying to achieve broadly the same thing.

And so to the newly minted Department of Science, Innovation and Technology (DSIT), which is one of the new ministries created by dividing up the Department for Business, Energy and Industrial Strategy (BEIS). As well as DSIT, we now also have stand-alone departments for Business and Trade, and Energy Security and Net Zero.

The rationale for splitting up BEIS is to deal with three issues – two of which will be solved by this, and one which won’t.

The first is that BEIS today is, above all, an energy ministry. It is the department responsible for subsidising energy bills on a daily basis; for ensuring security of energy supply including by building new power stations; and driving a programme of Net Zero across the economy through decarbonising the power sector. That’s quite enough for one Secretary of State to be getting on with.

The second is that BEIS is also responsible for a lot of policy areas under what is clunkily called ‘innovation’, as well as responsibility for science policy. The Government already spends a lot of money on the latter – some £22bn a year by the end of this Parliament – financing some of the most exciting and potentially economically beneficial things the UK is doing, including nuclear fusion, clean energy, reforms to the bioeconomy, life sciences and pharma, space technology, communications, and AI. But the importance of all that good stuff risks being lost when the Secretary of State is focused on energy bills.

By splitting science into a new department, and bringing across digital policy from DCMS, we now have two departments that are each focused on one issue: how we maintain energy supplies, and how we drive forward growth in high-tech and innovative new sectors to – sigh – become more like Silicon Valley.

The only thing missing from the new DSIT is universities, which are vital recipients of research money and generators of growth through spin-outs. Indeed, last year alone over 19,000 active new businesses and spin-outs came from UK universities, employing tens of thousands of people and bringing in new private spending. Universities are currently largely ignored within the DfE, which is focused on schools and skills, so a proper growth strategy would have brought higher education over to this new department as well.

While most of these changes sound thoroughly positive, there is a significant downside to MoG changes – they require a lot of energy and focus to manage the change.

A whole number of new issues raise their heads. Which ministers will be appointed for the new department and what issues will sit in their portfolios? Which staff from BEIS will move across and which will stay? For those who move, do they stay on the same payscales, or will the new department operate a different salary structure? Where will the new department physically be based? What will the new IT architecture look like and how quickly can new email addresses be set up for all the new staff? For the new Permanent Secretary and senior officials, this will consume a lot of their time – time that won’t be spent on addressing policy issues.

Above all there’s one critical issue that isn’t resolved by creating DSIT – and it’s a problem that at least partly explains why BEIS wasn’t successful. Rishi Sunak butted heads with the department when he was Chancellor, and the institutional power of the Treasury meant that he won. In fact, the Treasury almost always wins these battles, because it holds the purse strings in its role as the finance ministry.

But – and this is crucial – the Treasury is also an economics ministry, responsible for driving growth and productivity, even when that means spending money. The bravest MoG change would be to split the overly powerful monolith on Horse Guards Road, and allocate some of its duties to DSIT. Clipping the wings of the Chancellor? Now that might just pass the Rat and Parrot test…

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Jonathan Simons is a Partner and Head of the Education Practice at Public First.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.