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House of Commons

Friday 16 November 2001

The House met at half-past Nine o'clock


[Mr. Speaker in the Chair]

Public Bodies

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Caplin.]

9.33 am

The Parliamentary Secretary, Cabinet Office (Mr. Christopher Leslie): I am pleased to have the opportunity to set out the Government's policy on the important issue of public bodies, their work and composition, and the challenges that lie ahead. The debate has been initiated by the Government precisely because we are keen to report on the situation to date, enter into dialogue on developments and elaborate on our policies and intentions for the future.

We choose as a society to deliver services to meet the needs of individuals through the collective organisation of government at local, regional and national level. Ministers are ultimately accountable to Parliament and the electorate for the quality and efficiency of service delivery. Yet the processes by which services are delivered have evolved greatly in recent years, and the classic model of direct departmental implementation has been supplemented by a variety of other effective and appropriate organisational systems.

The term "public bodies" covers a wide range of organisations. The quango, or quasi-non-governmental organisation, is now known by the equally illuminating term, NDPB, or non-departmental public body, which perhaps better describes the position of those units in the overall government framework. There are four types of NDPB. Those based on the executive model, of which the Environment Agency is an example, carry out a wide variety of administrative, regulatory and commercial functions, and operate under statutory provisions. They employ their own staff and have responsibility for their own budgets. Advisory public bodies, such as the boundary commissions and the Historic Buildings Council, are generally set up by Ministers to advise on matters within their departmental sphere of interest.

Tribunal NDPBs, such as NHS or employment tribunals, are bodies with jurisdiction in a specialised field of law. Tribunals generally operate under statutory provisions and, independently of the Executive, decide the rights and obligations of private citizens towards a Government Department or other public authority. Finally, boards of visitors, such as prison visitors and visiting committees in Northern Ireland, are also classed as NDPBs.

Not all public bodies fit neatly in one of those four categories—for example, English Nature has both an executive and an advisory function—but the models provide the most comprehensive definition of the wide variety of quangos serving the nation.

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The Government are committed to keeping the number of public bodies to a minimum. There are now fewer in the UK than at any time in the past 20 years. As at 31 March 2000, there were 1,035 public bodies in the United Kingdom, with approximately 20 per cent. operating in Scotland, Wales and Northern Ireland under the responsibility of the devolved Administrations. The total number of public bodies in the UK has fallen by around 10 per cent. since 1997, down from 1,128. I intend shortly to publish the updated figures setting out the position at the end of the last financial year.

Mr. Andrew Turner (Isle of Wight): I am interested in the Minister's definition because clearly there are many local public bodies, such as governing bodies of schools, which are, as far as I can see, executive bodies. They are non-departmental, public and fulfil all the criteria that he set out, but they do not appear in either of the figures that he quoted.

Mr. Leslie: There are several different classifications of statutory bodies, but the issue is which of them are defined as NDPBs, and I shall elaborate on those classifications. Certainly, there are local statutory bodies with which we all work on a constituency basis and are familiar.

NDPB expenditure was about £24 billion in the last year for which records have been compiled, so these bodies are an extremely important component of the public sector. The vast majority of that sum was programme expenditure: the awarding of grants, legal aid and funding for further and higher education. However, only £18 billion was from the Exchequer, the remainder being raised through a combination of statutory levies and other charges. I shall endeavour to publish greater detail and financial information in the next edition of "Public Bodies", which is published by the Cabinet Office annually.

Ministers are accountable to Parliament for the grant in aid given to NDPBs, and it is right that Parliament should scrutinise, on the Floor of the House and through the Select Committee system, how well that money is spent. Ministers set performance targets to drive forward improvements in the quality of services, and are keen to see policies implemented in the most effective way. The process of review and accountability undertaken by both Houses of Parliament is important and greatly valued.

The Government are keen to ensure that those who sit on the boards of public bodies are appointed on merit. It is also important that public appointments increasingly reflect the composition of the nation as a whole, and that we achieve an equal representation of men and women, and, as closely as possible, a pro rata representation of ethnic minorities and a greater proportion of disabled people. It is also a priority of mine to increase the national diversity of those appointed to public bodies, so that all parts of the country have an equal voice about the public services that they need and expect.

The Government are looking to encourage applications to public bodies from people with the skills and qualities that we seek, but who might not be aware that opportunities exist, or might not at first consider themselves suitable for a place in public life.

Gradual steps are being made in the direction of a more diverse pool of public appointments. Of the 30,000 individuals who serve as board members, 33 per cent. are

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women and 4.4 per cent. are from an ethnic minority. However, greater effort needs to be made to speed up progress in that respect. In particular, I want greater attention to be paid to appointing disabled people to NDPBs, so I aim for the first time to give more information on those numbers in the next edition of the snappily titled, "Public Bodies 2001". I hope that that will establish a baseline from which the Government's commitment to increased participation can be assessed.

It is crucial that people appointed to public bodies should be of the highest quality and the best available for the tasks required. That is why the Government take considerable care in how the posts are filled. Ultimately, appointments are made by Ministers, and Ministers are held accountable for those decisions and for the performance of the bodies concerned.

To ensure that the process is properly carried out in each case, a Commissioner for Public Appointments is now in place to ensure that appointments are made on the basis of merit and in accordance with the code of practice. I pay tribute to Dame Rennie Fritchie, the current Commissioner for Public Appointments, for all her hard work and energy in fulfilling that important role. The code of practice seeks to promote appointment on merit, equal opportunities, probity, openness, transparency and proportionality. The commissioner's efforts have helped to secure an increasingly high quality of individual on the boards of those important organisations.

Once a public body has been established, it is important that Ministers and Parliament continue to monitor and review its performance and structure, and do not regard them as set in concrete. All NDPBs are subject to regular and thorough review every five years, but where it makes sense, that formal review can be brought forward or rescheduled, especially if its results can be linked with simultaneous changes in government. Public bodies do not exist in isolation from the rest of Government, but contribute to wider departmental and governmental objectives, and consequently form a key element of our programme for reform of public services.

In seeking to increase the accountability of NDPBs, the Government are keen for Select Committees to take a more active role in scrutinising the work of larger bodies, and Departments are required to inform the relevant Select Committee when the quinquennial review begins so that its views might inform the process. Fundamentally challenging questions are asked, such as whether the public body is required at all, whether it could be abolished, or whether it should be altered to achieve its objectives more effectively. If, at the first stage of the review, a decision is taken to remain as a non-departmental public body, the review will go on to examine the scope for future improvements, such as how new technology or closer co-operation with the private sector might be incorporated into its work.

I take this opportunity to thank the thousands of individuals who, through appointment to public bodies, give their time serving the public in pursuit of better services. There are some excellent examples of good practice, and I hope that the House will have an opportunity to consider some of them today. Many of the key quangos set up by the Government, such as the Low

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Pay Unit, the Disability Rights Commission and the new deal taskforce, are a response to specific manifesto commitments.

In my short time at the Cabinet Office, I have worked closely with the Better Regulation Task Force, which provides the Government with independent advice to help ensure that our regulatory programme is necessary, fair and does not impose unreasonable burdens on business and the public sector. To date, it has published 20 substantive reports containing 337 recommendations. Of those, 19 are still under consideration, and all but nine of the remainder have been accepted in whole or in part. That is a classic example of an effective advisory body that makes a significant contribution to the regulatory debate. The best public bodies are those that listen to the needs of the people they serve, and respond swiftly and efficiently.

During the substantive debate on this subject last year, the House spent some time discussing the taskforces set up by the Government since 1997. Taskforces, ad hoc advisory groups and review teams provide independent, expert advice to the Government on a wide range of important issues, including health, education, transport and crime. They are an effective means of securing high-quality advice on matters of public concern.

However, taskforces are not a new phenomenon. Previous Administrations have created their own taskforces and equivalent bodies, but it was this Government who made available for the first time detailed information on the number of such bodies in existence, their remit and membership.

Today, I announce the publication of the first annual report on taskforces, advisory groups and reviews. By producing in the form of an annual report information on details of the composition, names and background of the chair and membership, and dates when those bodies have been wound up, I hope that greater transparency and accountability can be achieved.

The number of taskforces is steadily decreasing. Of the 359 bodies in existence during the last financial year, 12 taskforces have been wound up, 28 reviews have concluded their work, and 86 advisory groups have ceased to exist. A further 22 bodies are due to be terminated imminently.

The House will be familiar with the development of Government agencies, which although not quangos in the traditional sense, are clearly public service bodies that exist outside the classic departmental model. The agency concept came into being in the mid-1980s in a very different political climate, and the next steps reviews have had a major impact on the organisation of the public sector.

The Government now believe that it is a good time to review the work of the agencies at large, both to define best practice and to share it, while recognising some of the difficulties that have been faced—and in some cases still remain—in the agency model. That review is being led by Pam Alexander, the former chief executive of English Heritage, with the support of a small team in the new Office of Public Services Reform.

The review has been designed to make sure that it takes account of the perspectives not just of Departments, agencies and non-departmental public bodies, but of service users. It will investigate relationships between Departments, Ministers and agencies, the extent to which

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operational freedoms have been devolved, and the impact on front-line delivery and innovation. The review puts a strong emphasis on consultation—so far, the review team has carried out 70 visits and meetings. I anticipate that the review will be in a position to report around the turn of the year.

While the existing system of public bodies and public appointments works well, I am keen to develop a number of improvements. First, I want to look at new methods of improving and extending the way in which appointment opportunities are publicised, and raise awareness generally about posts that arise. While specific appointment opportunities are, of course, already publicised in accordance with rules set out by the commissioner, the Government believe that more can be done to broaden the range of applications, so that not only insiders or those with privileged access are aware of potential vacancies in advance. The Cabinet Office will restructure the existing website on which information on public bodies is made available, and that should be launched next year. It must include key facts about public bodies and details of who holds what appointment at present.

Secondly, the Government believe that the development of regional governance will change the terms of debate on the accountability of regional and local quangos. Directly elected regional government would precipitate a review of how those public bodies should be held accountable to new structures, or subject to their scrutiny, and what future relationships might exist. Clearly, those matters are at a very early stage, and although it is too soon to consider specific arrangements, I am determined to promote wider awareness of the regional dimension in the formation of future public bodies. Specifically, I am keen to ensure that the membership of NDPBs increasingly reflects the regional breadth of all parts of the United Kingdom, and that boards and trusts are not dominated by any particular corner of the nation.

Thirdly, the Government must keep a close eye on the proliferation of public bodies, and check the number and growth of quangos. That is often more easily said than done, but it is important for Ministers to send to officials the message that we must always bear down on bureaucracy and layers of organisation where they are superfluous or can be replaced by more efficient and simple structures.

The topic of public bodies may seem dry and esoteric, but beneath the complexity and theory lie practical and relevant questions that are at the heart of public service delivery. Both the Government and Parliament have a duty constantly to scrutinise and improve the public sector, and I sincerely hope that today's debate will contribute to that process.

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