First Secretary of State Louise Haigh announced a new government agency named the OneGov Delivery Agency in the House of Commons to reform and streamline the civil service.
Conservative deputy leader Alex Burghart condemned the move, accusing the Labour government of creating a massive new quango that will strip ministers of authority while retaining responsibility for public services.
Speaking after Ms Haigh delivered a parliamentary statement on rewiring the state, Mr Burghart argued that the creation of the new body represents a step in the wrong direction for Whitehall management.
A quango, or quasi-autonomous non-governmental organisation, is a public body funded by taxpayers that operates at arm's length from government ministers. While established to manage technical or administrative functions independently, quangos have long generated political debate over whether they reduce direct ministerial accountability to Parliament.
Clash Over OneGov Delivery Agency
Mr Burghart told MPs that previous non-departmental bodies had diminished ministerial agency over key decisions affecting local constituents.
"On quangos, we've seen over time that they have led to ministers having less agency over important decisions that affect our constituents' lives," he told MPs.
He warned that the new body would oversee significant public expenditure while taking direct operational control out of ministerial hands.
"So it is unfortunate that the [First Secretary of State] has today announced the creation of a massive new quango in OneGov delivery agency."
According to Mr Burghart, the OneGov Delivery Agency will take charge of government recruitment, civil service pensions, shared services, and security vetting.
"This is going to be in charge of government recruitment, civil service pensions, shared services, security vetting, and so on."
"It will oversee considerable public money. It is a step in the wrong direction because ministers will retain responsibility for those services, but they will lose power over them."
The UK civil service employs hundreds of thousands of staff across government departments, with administrative operations coordinated through Whitehall in London. Functions such as security vetting, personnel recruitment, and shared departmental services are central to maintaining government operations across the country.
Civil Service Headcount and Red Tape
Ms Haigh defended the government's plan, telling the House of Commons that central civil service headcount is expected to shrink as administrative power is decentralised.
She rejected Conservative claims that civil service staffing levels had expanded by 11,000 since the general election, insisting that ministers hold a serious commitment to tear away red tape.
"We've already been very clear that the central civil service is expected to shrink, that we do want it to be more streamlined, more efficient, and that our commitment to devolution and to rewiring the state absolutely means fewer civil servants at the centre," she said.
Ms Haigh emphasised that shifting focus to regional administration is intended to repair long-standing damage caused by historic spending constraints on local authorities.
"And building the capacity and capability of regional and local government, which has been a huge, huge victim of the decade of austerity and has held back growth in our local economies."
The decade of austerity refers to fiscal policies implemented following the 2008 financial crisis, during which central government funding grants to local councils across England were substantially reduced, squeezing municipal budgets and regional investment programmes.
Debate Over Treasury Dominance
During the Commons exchange, Mr Burghart questioned why Ms Haigh, acting as Andy Burnham's Cabinet Office enforcer, had not restrained the traditional authority of the Treasury.
He noted that Ms Haigh had previously described 11 Downing Street as an imperial finance department during the summer, expressing disappointment that she had failed to dismantle its power.
"So I was genuinely interested to hear (Ms Haigh) say over the summer that the Treasury was an 'imperial finance department', and I rather hoped that she was going to lead the charge to smash over the barricades and destroy this terrible imperial power."
"But instead, it appears that the empire has struck back, because the briefing that we were given initially was that Number 10 North was going to take control of growth. That seems to have been watered down."
Mr Burghart asserted that real economic power remains concentrated within Number 11 South under Chancellor John Healey.
"The Treasury… was the behemoth created in its modern form by Gordon Brown, designed to control Whitehall, designed to reduce department ministers' authority over their spend and over their decisions," he said.
HM Treasury is the British government's chief finance ministry. Under Gordon Brown, who served as Chancellor of the Exchequer from 1997 to 2007 before becoming Prime Minister, the Treasury expanded its public expenditure tracking mechanisms, establishing central control over spending decisions across Whitehall departments.
Transfer of Powers to Number 10 North
Mr Burghart demanded details regarding the budget, levers, and running costs of Number 10 North, asking how much the new regional hub had cost taxpayers.
Ms Haigh responded that the regional office in central Manchester had been fully funded within existing Cabinet Office budgets without requiring extra financial allocations.
She explained that strategic economic functions had already been removed from Whitehall departments and assigned to the Manchester location, describing the transfer as a chip in the Treasury's empire.
"In terms of the new functions of Number 10, we have transferred a number of strategic functions into Number 10 North, including moving local economic growth and devolution strategy from the Ministry of Housing, Communities and Local Government and local economic growth policy from HM Treasury," she said.
The Ministry of Housing, Communities and Local Government oversees housing policy, planning regulations, and council governance, while the Cabinet Office manages central civil service strategy. Number 10 North was established as an extension of the Prime Minister's Office in Manchester to bring executive government operations closer to northern England.
Government Taskforces and Devolution
The exchange followed Ms Haigh's broader statement outlining government plans for economic growth, resilience, and structural reform of the state.
She announced the creation of three separate taskforces focused on tackling the cost of living, community renewal, and control over essential services including housing, water, energy, and transport.
Under Andy Burnham's devolution plans, the government intends to maintain a continued drive for regional decentralisation.
Ms Haigh confirmed that she will work directly with elected regional mayors across the country to execute the planned structural changes and transfer powers away from Whitehall.
