In our recent article, Reorganisation Without Resignations, we explored the workforce risks associated with Local Government Reorganisation and the importance of retaining talent through periods of structural change. The central argument was simple: whilst organisations can redesign structures relatively quickly, replacing capability, knowledge and leadership confidence is considerably harder.
The same principle extends far beyond local government. Across Integrated Care Boards (ICBs), NHS organisations, Civil Service departments and the wider public sector, leaders are navigating a period of almost continual transformation. Operating models are evolving, functions are being consolidated, budgets are under pressure and expectations around productivity and public service reform continue to rise.
In this environment, the question is not whether organisations can adapt, public sector organisations have demonstrated remarkable resilience over many years. The more pressing question is whether they can reform at pace without losing the people whose experience, relationships and expertise underpin delivery.
The risk beneath the reform agenda
Much of the language surrounding reform is understandably focused on efficiency, scale and organisational design. Yet from a leadership perspective, the greatest risks are often less visible and as organisations enter periods of uncertainty, attention naturally turns towards structures and future roles. However, the individuals most likely to be affected by uncertainty are often those with the strongest external opportunities. Experienced programme leaders, finance professionals, digital specialists, policy experts and system leaders rarely wait for a final organisational chart before considering their next move. This creates a familiar paradox. The people best equipped to lead organisations through change are often the very people most likely to leave during it.
For ICBs, this may mean losing commissioning expertise, transformation capability or system leadership experience. For government departments, it may involve the departure of scarce policy, digital or programme delivery talent. In both cases, the impact extends far beyond vacancy numbers. Organisations risk losing institutional memory, established relationships and credibility at precisely the moment they need them most.
Why capability loss matters more than vacancy numbers
When experienced individuals leave, the impact extends far beyond recruitment activity, a vacant role can be filled however lost capability is often far harder to replace. An experienced finance leader may hold years of organisational knowledge alongside technical expertise. A programme director may possess relationships and credibility built across multiple partner organisations. A policy specialist may understand legislative, political and operational complexities that are difficult to replicate through recruitment alone. In local government, these losses can affect service redesign, financial planning and community outcomes. Within health systems, they may weaken system leadership, commissioning expertise or transformation capability. Across central government, they can diminish policy continuity and delivery confidence. The cost of capability loss is therefore frequently hidden and it appears not as a vacancy, but as slower decision making, reduced organisational resilience and diminished capacity to deliver change.
Leaders do not always have immediate answers during periods of reform, however, they can provide clarity of intent, visibility and honest communication. When employees understand where an organisation is heading and how they contribute to that future, they are significantly more likely to remain engaged. Where that narrative is absent, uncertainty often fills the vacuum. The most effective leaders recognise that preserving capability is not simply about retaining individuals. It is about maintaining confidence in the future organisation.
A leadership challenge, not a workforce challenge
One of the most important observations from local government reorganisation is that retention cannot be viewed solely through an HR lens, it’s fundamentally a leadership issue. People rarely leave because an organisation changes shape. More often, they leave because they are uncertain about their future within it and this distinction matters. Leaders do not always have immediate answers during periods of reform, however, they can provide clarity of intent, visibility and honest communication. When employees understand where an organisation is heading and how they contribute to that future, they are significantly more likely to remain engaged. Where leaders are visible, honest and consistent, uncertainty becomes more manageable. Where communication is sporadic or unclear, people will create their own narrative, and it is rarely an optimistic one.
The organisations navigating reform most successfully are not necessarily those with the clearest answers today. They are often those that have been most effective at creating confidence in tomorrow. For senior leaders, this means investing as much effort in building belief as in building structures.
What ICBs can learn from local government reorganisation
Integrated Care Boards face many of the same challenges currently being experienced across local government. Both operate within complex systems, rely heavily on partnership working and are managing increasing demand with constrained resources. Most importantly, both depend on a relatively small number of highly skilled individuals whose expertise is difficult to replace quickly. As health systems continue to evolve, there is a risk that capability becomes an unintended casualty of reform. The strongest systems approach change through a talent lens as well as an organisational one and they are identifying critical roles before redesigning structures, engaging key individuals early and ensuring that future opportunities are visible to those they most need to retain.
This shifts the conversation from “What jobs will exist?” to “What capabilities must we protect?” It is a subtle but important difference.
A similar challenge for the civil service
The Civil Service faces a related challenge. Successive reform programmes have sought to improve efficiency, strengthen delivery capability and respond to changing government priorities. Yet organisational change can inadvertently place institutional memory at risk. Experienced officials often hold knowledge, stakeholder relationships and operational insight that cannot easily be replicated through recruitment alone.
The most effective departments recognise that organisational redesign and workforce planning must move in parallel. Identifying key talent, understanding where critical knowledge resides and creating credible opportunities for progression should be viewed as central components of reform rather than supporting activities. At its best, reform should strengthen organisational capability, not deplete it.
Supporting the next generation of leaders
Another lesson that applies across sectors is the need to look beyond today’s leadership team. Periods of transformation create opportunities for the next generation of leaders to emerge. New responsibilities appear, organisational boundaries become more fluid and individuals are asked to operate at greater scale and complexity. Yet these opportunities can quickly become vulnerabilities if support is absent.
The most effective organisations recognise that succession planning is not something that happens after reform. It is one of the mechanisms that enables reform to succeed. Mentoring, coaching, leadership development and visible sponsorship all play an important role in helping emerging leaders step into more demanding roles with confidence. Retention, after all, is not simply about keeping people. It is about creating an environment in which talented people can see themselves succeeding.
Culture remains the long term determinant of success
Perhaps the most transferable lesson from local government reorganisation is the importance of culture. Structures can be implemented through programme plans and governance frameworks. Culture is built through leadership behaviours, shared experiences and a collective sense of purpose. Whether organisations are integrating teams, redefining responsibilities or creating entirely new operating models, people need something to connect with beyond the organisation chart.
The most successful transformations invest early in defining what the future organisation stands for, how leaders are expected to behave and what employees can expect from one another. When that work is delayed, fragmentation often follows. When it begins early, organisations are more likely to retain engagement, commitment and trust throughout the transition.
A broader lesson for public sector leaders
The public sector is entering a period where change is likely to remain a constant feature of organisational life. The challenge for leaders is therefore not simply how to deliver reorganisation, but how to build resilience through it. That means thinking beyond structures and focusing equally on capability, leadership and culture. It means identifying the people whose contribution is critical to future success and ensuring they remain engaged in the journey ahead. Ultimately, reforms may be remembered for the structures they create, but they succeed or fail because of the people who are asked to make them work.
Public sector reform will continue. Operating models will change, structures will evolve and expectations will rise. The organisations that succeed will not necessarily be those that redesign themselves fastest, but those that retain the capability, leadership and culture needed to turn reform into results. Successful transformation is ultimately a people challenge, not a structural one.
Continuing the conversation
Many of the themes emerging from Local Government Reorganisation are now being echoed across health, central government and the wider public sector. As reform programmes continue to evolve, leaders have an opportunity to learn from experiences across sectors and consider how capability, leadership and culture can be protected during periods of change.
For those interested in exploring these challenges further, Gary Evans, Principal Consultant in GatenbySanderson’s Local Government practice, would welcome a conversation on the workforce and leadership lessons emerging from reorganisation and what they may mean for ICBs, Civil Service departments and other public sector organisations navigating transformation.
If you would like to explore with us how our Local Government practice can support your current leadership priorities and challenges, get in touch at info@gatenbysanderson.com