Andy Burnham has created a powerful new prime minister's department, the Office of the Prime Minister and Cabinet, led by his ally Louise Haigh, merging parts of the Cabinet Office, Treasury and housing ministry to become the "dominant driver of the UK's economy".
New department structure
The Office of the Prime Minister and Cabinet will oversee the No 10 operation in London, the forthcoming No 10 North in Manchester, and parts of the Cabinet Office. Teams responsible for local growth and devolution from the Treasury and Ministry of Housing, Communities and Local Government will be sent to the No 10 North unit, ultimately overseen by Haigh.
However, sources stressed that housing secretary Angela Rayner would retain devolution policy, with only strategy functions transferred from the Ministry of Housing. The government statement said: "This ensures that local economic growth policy and regional empowerment are no longer isolated from one another, establishing No 10 North as the dominant driver of the UK's economy."
Cabinet Office breakup
Other parts of the Cabinet Office will move into a new agency called OneGov, controlled by cabinet secretary Antonia Romeo, handling government HR functions such as pensions, recruitment and security vetting. The equality office moves to the housing ministry; digital ID to the Department for Culture, Media and Sport; the public sector fraud authority to the Department for Work and Pensions; and the investment security unit to the Department for Business, Innovation, Science and Trade.
Relocation incentives
The government will offer relocation packages to civil servants willing to move north to the No 10 operation. Whitehall sources said generous incentives would be needed to persuade staff working on local growth to move from London to Manchester quickly.
A No 10 spokesperson said the shift was about "taking power and decision-making out of SW1 and putting it closer to people's lives", adding that staff including senior staffer Caroline Simpson are already working there. Burnham will work from Manchester at least one day a week, with the spokesperson saying: "The time for resisting devolution is over."
Reaction from experts
Hannah White, director of the Institute for Government, welcomed the move: "This is excellent news. Finally, an incoming prime minister has accepted the fundamental weaknesses of the centre and is implementing the reforms called for by the Institute for Government."
Other changes
Angela Smith, leader of the Lords, said: "Today, we are fundamentally rewiring the state, changing the geography of government to deliver a stronger, more strategic centre that empowers local leaders, and acts as the engine room for driving economic growth across the whole country."
The Department for Science, Technology and Innovation is abolished, with most functions returning to the business and culture departments. Responsibility for artificial intelligence will go to the new Office of the Prime Minister and Cabinet, with a new prime ministerial adviser on AI. The minister for AI, Kanishka Narayan, will get a cabinet seat and sit within this office.
