Examination of Witnesses (Question Numbers
42-148)
Rt Hon Francis Maude MP
3 November 2010
Q42 Chair:
Minister, welcome. Thank you very much for joining us this morning.
I should explain that we're a little short-handed on the Committee,
partly because so many of our Labour members have been appointed
to the Labour Front Bench, and partly because of the tube strike.
Francis Maude: I
can take responsibility for neither of those events.
Chair: IPSA doesn't provide
for tube strikes.
Q43 Greg Mulholland:
Thank you for coming before us so soon. I shall start by asking
you about the consultation as part of what we all acknowledge
is a very major reorganisation of government functions. There
has been some criticism, as you're aware, from the Public and
Commercial Service union, saying that they have a major concern
about the lack of consultation, and Christopher Banks, the Chair
of the Public Chairs' Forum, said that he believes there's a sense
of tokenism and says that the Government's version of involving
an arm's length body in the decision about its future appears
to be telling it that it's being reviewed and that they will be
told the outcome at the end of the process, which is clearly not
real consultation at all. Do you recognise that description or
do you reject it? And can you tell us what consultation there
actually has been in this process with those bodies?
Francis Maude: Well,
it will be very varied really, because the lion's share of the
work on the reviews was done by individual departments looking
at the bodies within their purview and reaching a conclusion;
subjecting them to the three tests, the existential tests and
then the three subsequent tests to test whether they're needing
to be independent. What process each one went through, I suspect,
will have varied enormously. These are essentially decisions in
principle; these are decisions made where departments will know,
or should know and I'm sure do, in a great deal of detail what
those bodies do, what their functions are and how they are carried
out. The decisions we made during the review are decisions of
principle: is this a body or a function that has to be carried
out in a way that isn't directly accountable, either to an elected
local authority or to a minister.
Q44 Chair:
Can I just ask you to stick to the point about consultation, because
we're going to come to the criteria in a moment?
Francis Maude: Well,
the answer is: it would be very varied and, in some cases, will
have been quite extensive; in other cases, will have been very
little. But there's a further stage, obviously, a consultation,
which is beginning now, which is about the implementation plans—what
actually happens in practice—and there are discussions certainly
being had at a broad, cross-cutting level between my officials
in the Cabinet Office and our Public Bodies Group with the civil
service unions, but obviously much more at departmental level
with the unions there.
Q45 Greg Mulholland:
Was there any reason why the consultation was so different between,
clearly, some bodies being fairly well consulted and others not
being? Does that suggest, perhaps, a prejudice about the future
of those organisations or those functions?
Francis Maude: Well,
I don't know the extent to which it was fair. I would not expect
to have monitored in intimate detail exactly what consultation
each department went— We're talking about 900 bodies here,
so there was a lot of reviewing to be done, and departments will
have taken their own decisions about how to and the extent to
which they would consult.
Q46 Greg Mulholland:
To what extent do you feel that there's a danger that, because
this was a clear pre-election policy and people talked about I
think a rather unhelpful phrase, "bonfire of the quangos"—and
it's very easy to say, "Far too many pen-pushers and bean-counters,"
to use the words of Nick from the last session—some of these
organisations didn't really stand a chance and weren't given the
proper chance to put their case to the departments?
Francis Maude: Well,
as I say, departments should know what each body does, so there
should be a high degree of knowledge about it. This was a perfectly
public review process. It was highlighted before the election
by the Conservative Party. It then appeared as a key item in the
Coalition Programme for Government, so everybody knew that this
review was going on. The phrase you used is not one that I've
ever used, but I have read it in newspapers. So those chairs and
chief executives of public bodies who had opinions about whether
they should be able to continue were well able to express those
views, and did so—some of them in very vigorous terms, as
they're perfectly entitled to do.
Q47 Chair:
We asked the witnesses we've just had whether they had been formally
asked in any shape or form about whether they felt their organisation
fitted your criteria, and they said they hadn't. Wouldn't it have
been sensible to do so?
Francis Maude: I
expect—I don't know to what extent they were asked. Obviously,
if they say they weren't asked by their departments, that's obviously
the case. Others may have been; I don't know.
Q48 Chair:
So, have you set down a procedure for how departments should go
about this?
Francis Maude: No,
we simply said, "These are the tests which you must apply,"
and we then have oversight of the results of the review, and we
test the conclusions that the departments have reached and, as
I made clear in the statement whenever it was—two weeks
ago—some of the reviews are not yet complete and some of
the bodies are still being considered.
Q49 Charlie Elphicke:
On that point, I'm looking through the schedule to the Bill. There
are oddities; for example, the British Waterways Board is on that
list, but trust ports are not, and yet both are quangos.
Francis Maude: Do
trust ports not appear at all in any of the schedules?
Charlie Elphicke: Not
that I'm able to see, but the British Waterways Board is definitely
there.
Francis Maude: It
may well be that the trust ports weren't within the scope of the
review, for reasons which I can't now elucidate, but I know that
you have some views about that.
Q50 Robert Halfon:
Good morning. How did you decide the criteria and come up with
the various tests?
Francis Maude: Well,
we gave a lot of thought to what a function needs to satisfy in
order to justify not being accountable. Our presumption is that
something that is done by the state should be accountable; decisions
made should be accountable, either through ministers to Parliament
or to a local authority. If it's not done by the state, then the
accountability doesn't arise in the same way, so there needs to
be quite a hard-edged reason for a state function not to be accountable,
and we gave a lot of thought to what would justify that, and the
three tests we arrived at seemed to us to cover all serious eventualities.
If it's a body that is there to measure facts in a way that requires
it to be seen to be independent of government, then that meets
the test; if it's doing something that obviously requires political
impartiality, that oversets the presumption; and if it's doing
something that is clearly very technical, then again that would
overset the presumption.
Q51 Robert Halfon:
How much of your decision was based on whether these quangos were
giving value for money to the taxpayer?
Francis Maude: That
was a secondary consideration. We've said throughout that the
primary consideration here has been to improve accountability.
It is our view that, in the past, various public bodies were set
up in order to avoid ministers having to take responsibility for
difficult decisions, and that seems to us what ministers are for:
to take decisions and justify them.
Q52 Robert Halfon:
Why wasn't the value for money higher up the agenda, given the
state of the economy and the cost of some of these quangos?
Francis Maude: Well,
it's a factor, but it's a secondary factor. Certainly it was a
factor in taking the decisions to remove duplication where there
were bodies which were duplicating their activities, with overlapping
functions—sometimes functions which were in conflict with
each other—seeking to remove those, driven primarily by
the desire to save money and improve value for money, but as I
say, the primary consideration throughout has been to increase
accountability.
Q53 Chair:
Can I follow that up for the moment? Clause 8 of the Public Bodies
Bill says, under "Matters to be considered" at (1)(a):
"achieving increased efficiency, effectiveness and economy
in the exercise of public functions". That would seem to
be about value for money.
Francis Maude: I
didn't say it isn't about value for money.
Q54 Chair:
But that's the first criterion, and then the second criterion
is about accountability. The other tests you mentioned are not
in the Bill.
Francis Maude: No.
Well, those are the tests which we've applied to deciding which
category the bodies go into, but the fact that they're listed
in a different order does not alter what we've consistently said,
which is that this is primarily about accountability.
Q55 Chair:
But efficiency and value for money is the first criterion, whereas,
initially, it wasn't in your criteria at all. Have the goalposts
moved?
Francis Maude: No,
they haven't, with respect. Everything we said about this before
the election made it clear that this was principally about accountability.
If you go back to speeches made about this by the now Prime Minister
before the election, the principal objective here was to increase
accountability, and that remains the case.
Q56 Robert Halfon:
Why is ACPO not included in the Bill, given that it seems to be
quite an unaccountable organisation?
Francis Maude: I
don't believe ACPO is a public body in that sense. I don't know
quite what its formal legal status is, but it's a voluntary association
of chief police officers—kind of a trade body that then
attracts some public funding because of functions that are delegated
to it, I guess, by the Home Office.
Q57 Robert Halfon:
On the technical function criterion, couldn't it be argued that
all quangos perform some kind of technical function? Can you explain
what that actually means in precise terms?
Francis Maude: Well,
if it's doing something that does not require—where the
decisions being made are purely technical, I think that's the
consideration: where you're not making policy judgments. The concern
we had was that too many bodies were setting policy in some cases,
which, it seems to us, should not be done, unless in a way that's
directly accountable. But if it's merely administering a technical
process or making technical decisions, that seems to us to overset
the presumption. This is not an absolutely precise science; most
of these bodies do lots of different things, and what you're doing
is making a judgment about: what is this body primarily doing?
In some cases, this is not as simple as some people
would like it to be because, in some cases, we're saying a particular
function in a body will be brought within a department, because
it's a policy-making function, but the Environment Agency, for
example, actually has some policy-making functions; Ofcom has
some policy-making functions. We think policies should be decided
by ministers accountable in this place. But none the less there
are continuing functions, which both the Environment Agency and
Ofcom have, that are technical but that also will require clear
political impartiality, and those functions meet the test sufficiently
that they overset the presumption of accountability through Parliament.
Q58 Robert Halfon:
Could you give an example of a technical function of a quango?
Francis Maude: The
Environment Agency will be taking decisions about the detail of—I'm
trying to think what it would be doing—but there must be
a range of detailed decision-taking on enforcement of regulations
on environmental pollution, which you would not expect a minister
to be directly accountable for.
Q59 Robert Halfon:
Can't a technical function be done by an executive agency rather
than an arm's length organisation?
Francis Maude: Yes,
some can, I guess. As I say, it isn't absolutely precise. Our
presumption is that things should be done in a way that an executive
agency is accountable through ministers to Parliament, and that's
why, for example, the Child Maintenance and Enforcement Commission
will become an executive agency, because actually that is fulfilling
an important public function—not a technical one in that
sense—which should be accountable to Parliament. Sometimes,
there are technical functions that the public will expect to be
clearly not capable of being interfered with by ministers, and
some of the pollution-type activities may fall into that category.
Q60 Robert Halfon:
Why are no specific reasons given for the retention of some bodies?
Because there's some confusion, with some bodies who've gone and
some bodies who have stayed, and from what you've described this
morning, you could argue that some of the bodies that have gone
had some of those functions and some didn't, and I think there's
still some confusion about the criteria.
Francis Maude: Well,
we don't think we provided an exhaustive explanation of all 901
bodies that were subject to the review, and we made the point
as well, consistently, that this is a work in progress. There
are 40 bodies of those 901 where decisions are still awaited,
either because there's a formal review under way or because simply
it wasn't possible in the time to get final decisions made, and
we've also said that all remaining public bodies will be subject
to continuing triennial review. Circumstances change, the needs
change, and this is not set in stone for all time.
Q61 Robert Halfon:
Have you made any estimates of the cost savings to government
of the ones that are going?
Francis Maude: No,
and because, as I said earlier, the decisions we made were decisions
in principle of whether particular functions met one of the three
tests sufficiently that their continued existence in an independent
body was justified, it's then for departments and the bodies themselves
to draw up detailed implementation plans. That there will be savings
is clear, because all of these are functions that are carried
out in an administrative manner, and the Spending Review has placed
on all government departments and all remaining bodies a very
stringent trajectory in terms of their administrative cost base.
Q62 Chair:
One of your criteria is "does it perform a technical function?"
as a criterion for maintaining an arm's length body. But you've
also said that technical functions can be transferred to expert
committees in departments, or executive agencies. Is this really
a criterion for judging whether to keep a quango or not? What
do you mean by "technical function"?
Francis Maude: What
I think we mean is that this is a function that the public would
not expect to be carried out—it overlaps into the criterion
about political impartiality—a function that requires political
impartiality—where you would not expect the decisions on
technical issues to be able to be overset by ministers or councillors.
Q63 Chair:
In which case, delete "technical function" and stick
to "political impartiality". Technical function has
got nothing to do with it, has it?
Francis Maude: Yes,
I think it has because it overlaps, but there are plenty of these
bodies that will continue to exist because they in some way meet
more than one of these tests.
Q64 Chair:
So, it's important to keep these tests flexible.
Francis Maude: Well,
this is not a precise science. These are judgments which we as
ministers make and are willing to justify, and I've made the point
consistently that these are not set in stone for all time, which
is why we're saying there will be triennial reviews.
Q65 Chair:
But again, the question of a technical function doesn't appear
in the Bill at all. It's not a criterion referred to in the Bill
at all.
Francis Maude: These
are criteria that are being used—tests that are being used—for
the purpose of the review.
Q66 Chair:
But what is the point of having criteria unless they help you
provide consistency?
Francis Maude: Well,
they have helped us to provide consistency. I believe that the
results of the review are reasonably consistent.
Q67 Chair:
This is a very complex and difficult area, isn't it?
Francis Maude: Well,
at the end of it, we're making judgments about whether we think
public functions—state functions—have to be delivered
in a way that is unaccountable. These are tests that help us to
reach those judgments; this is not a precise science. We're making
judgments, which we're happy to be accountable for.
Q68 Chair:
But impartiality is not a criterion that appears in the Bill.
Francis Maude: No.
These three tests are the tests that we applied in the
review.
Q69 Chair:
But the Bill is to implement the review; one would expect there
to be some consistency between what you're publicly saying the
criteria are and what appears in the Bill. Can you explain why
that's not the case?
Francis Maude: The
Bill is to allow the continuing decisions of the Government to
be implemented, if that's what Parliament chooses to happen.
Q70 Chair:
So, these criteria are more sort of rules of thumb, rather than—
Francis Maude: These
are tests to which we submit each function, to see whether it
justifies oversetting the presumption that functions carried out
by the state should be accountable.
Q71 Chair:
Some people have suggested to us that these were tests to justify
a broadly predetermined outcome. That would be unfair, I guess.
Francis Maude: Yes,
that would be unfair.
Q72 Chair:
And there must be one or two public bodies that are such hot political
potatoes, whatever criteria they do or do not match, you will
not touch them.
Francis Maude: I
think there are decisions we've made that indicate a willingness
to take on controversial bodies.
Q73 Chair:
The Equality and Human Rights Commission—it's not a technical
function. Does it require political impartiality? It's governed
by legislation that is applied politically impartially by the
courts. Does it require to be independent to establish facts?
That's what the courts do in those cases. So, why have you kept
the Equality and Human Rights Commission?
Francis Maude: Well,
there is an argument, certainly, that it meets the last of those
tests: that it acts to establish facts, it has an obligation to
measure developments in terms of equalities, and certainly an
argument that it requires, in some of its functions, to be politically
impartial.
Q74 Lindsay Roy:
Good morning, Minister. Are you saying quite categorically that
the reforms are not being ideologically driven, but have very
much a pragmatic focus?
Francis Maude: Well,
I don't think they're ideological, nor purely pragmatic. They
are guided by some principles, which are set out in those three
tests.
Q75 Lindsay Roy:
Would it surprise you to hear that the witnesses this morning
have indicated quite clearly that they feel highly accountable,
that there are clear monitoring procedures, there are success
criteria, they have reporting mechanisms, and they feel they're
fit for purpose? How are these reforms going to change that accountability?
Francis Maude: Well,
where the conclusion is that a function should be made accountable
in the way I've set it out, the difference is that a minister
can be held accountable in Parliament for how that function is
carried out, how the policy is set and how the policy is administered.
Q76 Lindsay Roy:
You're saying that's not the case for some of the quangos at the
moment?
Francis Maude: Absolutely
not the case. They can be summoned in front of a Select Committee,
for sure, but the essence of parliamentary government is that
ministers are accountable in Parliament, and we think that's good.
It's not always comfortable, but it's quite good.
Q77 Lindsay Roy:
There's obviously a great deal of interest in this, so when will
you be publishing the analysis that was undertaken to come to
the decision whether to reform, abolish or retain public bodies?
Francis Maude: Well,
I think all of the departments, when I made my overarching announcement,
put out at that stage their own explanations for the decisions
that were made as part of the review, and such analysis as they
chose to accompany the explanation.
Q78 Lindsay Roy:
Will you be preparing an overview of that for public consumption?
Francis Maude: I
wasn't planning to, but I suppose we could. I don't know—is
there an appetite for that?
Q79 Chair:
Well, it does seem that you've set out some criteria; you're making
a judgment of each public body against those criteria—that's
what you've asked departments to do. There presumably should be
something in writing about each public body that's been reviewed.
Is there any reason why departments shouldn't publish that analysis
in the interests of transparency and openness and accountability?
I appreciate it might fall into the category of advice to ministers,
but these are decisions being made about public bodies which I
think the public is entitled to know about.
Francis Maude: Absolutely,
and I would expect, as you examine, as I'm sure you will, the
individual announcements made by all the departments in relation
to the bodies within their purview, you can make a judgment of
whether that meets your expectations of the explanations that
you think the public are entitled to; if not, I'm sure other departmental
Select Committees will want to examine what those departments
have decided and the explanations they're giving.
Q80 Chair:
But would it be reasonable for us to recommend that each department
publish how they've applied the criteria to each public body?
Francis Maude: I'd
recommend you looking in detail at what each department has said
and see whether you think they're meeting that—what you
would like to see. I think you'll find that quite a lot of them
have done that.
Q81 Lindsay Roy:
Is that not part of your ministerial accountability?
Francis Maude: No.
My ministerial responsibility was to oversee the review, to ensure
that it was carried out in a way that was reasonably consistent
and met the commitment we'd made in the Coalition Programme for
Government, and then to oversee the Bill going through Parliament,
which is an enabling Bill, not setting out the detail of what
will happen to each department, because that will flow subsequently
in detailed secondary legislation.
Q82 Lindsay Roy:
I beg to differ on this, because, given your role in this—a
pivotal role—I feel that the public deserve an explanation
as to why these reforms have taken place in different ways.
Francis Maude: Well,
I hear you and I'll reflect on that, but as I say, I think the
primary— I made a statement to Parliament where I set out
both the detail in terms of what broadly we expected to happen
with each body—the detail could be worked out and set out
subsequently—and primarily we took the view for departments
themselves to explain in greater detail and depth what they expected
to happen and why the decisions had been reached in that particular
case.
Q83 Chair:
May I ask very briefly about the scope of the review? We talk
about quangos; I think we're talking about arm's length bodies—ALBs—but
there are some organisations like, for example, BBC and Channel
4, which are arm's length bodies, technically, but they're not
included in the scope of the review. What are the criteria for
including organisations within the scope of the review?
Francis Maude: Well,
the BBC is a public corporation set up under royal charter.
Chair: I appreciate that
but—
Francis Maude: And
Channel 4, I think, is in the scope.
Q84 Chair:
It is in the review, is it?
Francis Maude: As
far as I remember, it is, yes.
Q85 Chair:
There is a case for applying these criteria to a far wider selection
of public bodies than you have.
Francis Maude: Well,
I'm willing to—
Chair: I'm ambitious for
you.
Francis Maude: Well,
I'm very grateful. I'm very grateful for all the support I can
get. Any suggestions of bodies you think we ought to be looking
at that we haven't—
Q86 Chair:
Executive agencies?
Francis Maude: Well,
we deliberately exclude executive agencies on the basis that those
are already accountable. Ministers take responsibility for what
executive agencies do.
Q87 Chair:
Well, we want to talk about accountability, because it has been
put to us that we're really just swapping one kind of accountability
for another—an identifiable chairman or chief executive
for a civil servant. That, it could be argued, is a reduction
in visibility in terms of accountability.
Francis Maude: Well,
it all depends whether you believe in parliamentary accountability.
Call me old-fashioned: I believe in parliamentary government.
Q88 Chair:
Doesn't merging some public bodies lead to a reduction in accountability?
Francis Maude: I
don't see why. Why would it?
Q89 Chair:
Well, because more functions are answerable under one body or
one person.
Francis Maude: Well,
if they're fundamentally not subject to parliamentary accountability
anyway, I don't see that there's a reduction in accountability.
No, I wouldn't accept that.
Q90 Chair:
There would still be 608 arm's length bodies.
Francis Maude: Yes.
Q91 Chair:
Are they less accountable than the ones you've moved into civil
service departments?
Francis Maude: Well,
yes, because they have met one of the tests for that function
continuing to be exercised without direct accountability.
Q92 Chair:
In a letter that was leaked about this process, it was stated
that you intended "working with the Liaison Committee and
the Public Administration Select Committee to strengthen Select
Committee scrutiny of public bodies and of appointments to boards
of public bodies." Can you expand on that? How do you think
we could help?
Francis Maude: On
appointments to public bodies? Well, there was a recommendation
by the Liaison Committee, as far as I remember, before the election,
for looking at the pre-appointment scrutiny process, and we responded
to the suggestions they were making—the recommendations
they were making—and I think my recollection is that I've
offered to meet with the Liaison Committee to discuss how we take
that forward.
Q93 Chair:
But what exactly do you have in mind?
Francis Maude: Well,
part of it was about scope—which appointments are within
scope—and I think the Liaison Committee wanted to extend
the number, and I think I've indicated that we are willing to
consider that and discuss in detail which appointments should
be brought within scope. Our view is that Select Committees should
not have the ability to veto appointments, because these, at the
end of it, have to be ministerial appointments, but we're very
content with the scrutiny being carried out in a way that's public
and the advice made public.
Q94 Chair:
If Parliament wants to scrutinise an appointment, should the Executive
be involved in deciding what scope of public appointment should
be so scrutinised? Surely, it's a matter for the individual Select
Committees themselves.
Francis Maude: Well,
there's nothing to stop select committees doing it, but I think
the process that was set up was one that was done by agreement,
and where there was built into the appointment process a period
in which the select committee could look at it before the appointment
was finalised. If the select committee just decides it wants to
review an appointment and that's not agreed, then it's just going
to happen after the appointment is made, which would not be very
useful.
Q95 Chair:
No, I understand that. Thank you. Finally, we wrote to you on
27 July following your suggestion that the committee should have
a role in scrutinising the creation of—
Francis Maude: I
think it was your suggestion, in fact, but it was one—
Chair: Well, I think you
agreed with it, but we haven't had a reply to our letter yet.
Is this something you're giving a lot of thought to?
Francis Maude: I
wouldn't say it's occupying every waking hour, but it's certainly
something we're thinking about. I think it is useful for there
to be a role in scrutinising and advising on the creation of new
bodies. Our view is that there have been too few tripwires along
the way—too few hurdles in the way of public bodies being
set up. They've been set up in a fairly incontinent manner in
the past, as I say, with a tendency for ministers to set them
up to avoid them having to take difficult decisions, we kind of
think.
Q96 Chair:
So, when do you think you might be able to give us a definitive
answer? Or maybe perhaps we can make some more recommendations
in our report first.
Francis Maude: Well,
why don't you make some more recommendations? Because I think
your suggestion was that this Select Committee should have a role
on it. I think one of the things we would want to explore is certainly
that, but also whether departmental select committees should have
a role in relation to public bodies being set up in their particular
arena, so I think there's—
Q97 Chair:
That makes sense: select committees in general rather than just
one select committee.
Francis Maude: Yes.
Q98 Chair:
Let us move on: triennial reviews. There used to be quinquennial
reviews, which were scrapped in 2002, after the Alexander report
found that they cost about £5 million a year.
Francis Maude: I
think we can do it a bit more cheaply than that.
Q99 Chair:
Well, we hope you can, but how would your cheaper system differ
from previous systems? How will you make it cheaper?
Francis Maude: Well,
I don't know how on earth they managed to spend £5 million
doing that.
Chair: I know. The mind
boggles.
Francis Maude: Yes,
I will investigate that. That does seem to me startling—
Q100 Chair:
But I notice, again in the Bill, you're not tying yourself to
triennial reviews. It's not mentioned in the Bill. Shouldn't it
be something that you're required to do by law?
Francis Maude: It
could be, and it hadn't occurred to me, and if someone wanted
to table an amendment to that effect on the Bill, I'd certainly
consider it. I would expect this to be done in a way similar,
but at slightly more leisure, than the review we've done in the
last four or five months, which obviously had to be fairly rapid.
It was done seriously and thoroughly, I think, but we were looking
at 900 bodies in a short space of time.
Q101 Chair:
But will the triennial reviews just be about whether a body should
continue to exist, or will there be a wider purpose to look at
the efficiency and transparency and accountability of the body
as a whole; to recommend changes rather than just a binary question?
Francis Maude: Well,
I'd expect us to set out, in more detail, in the new year, how
we expect this process to run, but what I envisage is that the
triennial reviews will go through the same sort of process that
we've done with this overall review to look at, first, does this
function still need to be carried out? One of the things we discovered
was lots of functions seemed to be necessary at the time and probably
were necessary at the time, but the need for them has now faded.
So to look at whether the function needs to be carried out at
all, and then to subject it, if the answer's yes, to the three
tests to see whether it meets one of those three tests, but also
subsequently to look at efficiency, transparency and value for
money, so that those factors can be fed into the decision-taking.
Q102 Chair:
Who will carry them out? If they're carried out by the departments
concerned, that is what was abolished in 2002. Shouldn't they
be somehow independently carried out?
Francis Maude: Well,
if you start to set up sort of external reviews, then you—
Q103 Chair:
Or by the Cabinet Office?
Francis Maude: Well,
I think we will be from head office and there to help.
Q104 Charlie Elphicke:
Minister, if I may, I'd like to ask you about the bringing-in
of the Big Society into the land of quangos to foster a new era
of community engagement. There's a lot of talk about the Big Society,
a lot of rhetoric, and I'm interested in the reality and how we
implement it on the ground. The Government have announced this
idea of devolving—creating mutuals, and charities and local
organisations playing a role; why have you found it so difficult
to transfer functions currently performed by non-departmental
public bodies to the voluntary or private sector?
Francis Maude: Have
we found it difficult? It's happening in some cases. The expectation
is British Waterways Board will become a mutual, which I think
is arousing quite a lot of interest among aficionados of the canals.
Some of the consumer functions we expect to move to the Citizens
Advice Bureau, which are very much in the civil society world.
So, I think we've done a certain amount. Have we found it—
Q105 Charlie Elphicke:
But isn't it the case that only nine out of 901 bodies are being
transferred? This isn't great progress; this is less than one
per cent, or about one per cent.
Francis Maude: Well,
it's a considerably large proportion of those to which changes
are being made.
Q106 Charlie Elphicke:
Looking at the British Waterways Board, as I understand it, you
said the BBC could not be within this particular thing because
it was a statutory corporation, but then the British Waterways
Board, as you'll know, was established by the Transport Act 1962
and is also a statutory corporation, and as we visited earlier,
trust ports seem to be omitted from this altogether, and they
are the worst sort of quangos, which are completely unaccountable
to anyone. Is there any kind of method in drawing up this list,
and can we have more included in it, as it goes through the House
of Commons?
Francis Maude: We'd
look at all amendments tabled with care and thought. Going back
to your point about how many bodies or functions are being transferred
to civil society organisations, it certainly is being considered,
and if there are suggestions being made as to how that can be
extended, we're very receptive to that.
Q107 Charlie Elphicke:
I don't know about colleagues, but it seems to me that we should
make change faster, deeper and wider when it comes to delivering
the Big Society and fostering community engagement, particularly
as a lot of these corporations are very unaccountable. The British
Waterways Board is an attractive mutualisation but, in the case
of my constituency, I have a chief executive of a quango paid
more than the Prime Minister. They've instructed lobbyists like
Bell Pottinger to brief against the elected Member trying to foster
a Big Society project. Is that how you, as a minister, would like
to see a quango behave, or would you like to see the Big Society
shine light into the land of quangos to a greater extent?
Francis Maude: Well,
transparency is very valuable. It sounds as if you're shining
the light of transparency on to that particular body. To be honest,
I don't know the exact status of the trust ports and why they're
not in the scope of this, and it's something I will undertake
to look at with some urgency.
Q108 Charlie Elphicke:
But given that nine out of 481 have been changed, I'm just wondering:
will you, as minister, be champion of faster, deeper, wider change
and modernisation of quangos, so that we can have more of these
sort of community mutualisation-type things, and will you be the
champion in government for that, particularly if Members of this
House are keen on fostering that kind of change to deliver the
Prime Minister's vision of the Big Society?
Francis Maude: Well,
I'm a huge enthusiast for it; indeed, my department has responsibility
for the Big Society programme to the extent that it's a programme,
and delivering particular elements of it, including the National
Citizen Service, the whole process of sponsoring and promoting
mutual spinouts from the public sector, which is a very exciting
process and where there's huge amounts of interest within the
public sector in pursuing that option. Faster, deeper, wider—I
need little encouragement but would welcome any support.
Q109 Robert Halfon:
Given what Charles just said about lobbying organisations and
quangos, do you not think that quangos should be banned from using
taxpayers' money to hire lobbyists?
Francis Maude: Well,
there are already guidelines that should prevent quangos from
hiring lobbyists to lobby government, which they have done in
the past. We don't think those guidelines are sufficiently tight,
and we'll be tightening them up. Again, I think taxpayers find
it pretty offensive that a quango should hire a lobbyist at taxpayers'
expense to lobby the Government—often, to lobby the Government
to give it more taxpayers' money.
Q110 Robert Halfon:
What about lobbying local councils and businesses and other organisations,
private and voluntary? Surely, they shouldn't have any money to
hire lobbyists in the first place.
Francis Maude: Well,
they're all going to find themselves facing very much more constrained
finances in the years ahead, but that's one of the things about
accountability and the lack of it in the past. Some of these bodies
have spent money in a way that is hard to justify, and we've seen
that with the salaries that have been paid, which we've shone
a light onto, and as I say, we're going to tighten up the rules.
I will look specifically at how widely the constraints on hiring
lobbyists are. We're particularly concerned with the tendency
to hire lobbyists to lobby for more money and for things which
seem to the public to be self-interested by that body, but I'll
look at it to see whether it should be cast more widely.
Q111 Charlie Elphicke:
Do you think it broadly is unacceptable for public funds to be
used to brief against government policy or brief against an elected
official?
Francis Maude: Yes,
I would say so.
Q112 Charlie Elphicke:
And were such a case to come to your attention, would you investigate
it and take appropriate measures and give appropriate guidance?
Francis Maude: I'd
certainly look at that, yes, and see whether we need to take steps
as a result.
Q113 Charlie Elphicke:
My understanding is, as you say, members of the public regard
that kind of abuse of public funds as simply unforgivable, particularly
if it is to further an interest of the public body, rather than
accountability or transparency.
Francis Maude: Yes—that's
my point. If it looks like it's self-interested, if it's promoting
the vested interests of that body, I think people will find that
very offensive.
Q114 Chair:
Obviously, public bodies don't give money to political parties,
but they do take stands at political conferences and pay quite
handsomely for those stands. Do you think that's a legitimate
use of public money?
Francis Maude: I
think it would vary. Do I think it's unacceptable? Probably not
as an absolute cast-iron rule. Some of them would say that it's
justifiable to make decision-makers more aware of what they do,
but I think, in all of these circumstances—
Q115 Chair:
But usually it's the minister that's taken to the stand and questioned.
Isn't there a bit of a conflict of interest there, where the public
body concerned is actually trying to get visibility with their
own minister?
Francis Maude: Well,
in any event, all of this kind of activity now falls under the
advertising and marketing moratorium that I introduced soon after
taking office.
Q116 Chair:
So there won't be any public bodies taking stands at party conferences
from now on?
Francis Maude: I
imagine that actually—this is a thought that has only just
occurred to me, now that you've mentioned it—it will all
have to be approved by me.
Q117 Chair:
Well, that presents a conflict of interest, doesn't it?
Francis Maude: It
does, doesn't it? I shall have to reflect on that one. I think
I only see one way in which that can be resolved.
Chair: Sadly perhaps with
a different hat on.
Francis Maude: Yes.
Chair: As a former chairman
of the Conservative Party. Shall we move on? Mr Halfon: managing
the transition.
Q118 Robert Halfon:
Yes, the transition with the machinery of government: how are
you going to manage the reorganisation?
Francis Maude: Which
reorganisation?
Robert Halfon: The reorganisation
from the quangos to the ones that are coming into the department.
Francis Maude: Well,
it has to be done by individual departments. They are responsible
for the implementation of this. They have the spending constraints,
they have the budget, and they have to manage it in their way.
We will be available to help and there will be common experience
and toolkits that can be made available more widely, which we
can facilitate.
Q119 Robert Halfon:
What do you expect to be included in the business plan for the
reorganisation?
Francis Maude: The
implementation plan? Well, it would need to set out what the process
is; how the new body, if there is a merger, say, is to be set
up. I'm acutely aware of the criticism in the Institute for Government
report on arm's length bodies, where they said mergers have tended
to cost money, which I completely accept—they've tended
to be costly, but plenty of mergers in the private sector have
been costly as well.
Q120 Robert Halfon:
I was going to ask you about that, to ask you what's going to
be the cost of doing this. Is it going to be an incredible burden,
as you just pointed out and some are suggesting?
Francis Maude: Well,
there is an upfront cost in most restructurings, whether in the
private sector or the public sector, and the task that departments
will have is how to do that in a way that is most cost-effective,
to control the costs, and to ensure, where there is a merger,
for example, that the savings are absolutely harvested and they
will have to take responsibility for ensuring that, but we will
be available to help.
Q121 Robert Halfon:
Are you going to publish the costing figures of the reorganisation?
Francis Maude: I
guess departments will want to do that as they finalise the plans,
yes.
Q122 Robert Halfon:
And the Cabinet Office, presumably, approves all the implementation
plans. Is that right?
Francis Maude: I
can't remember, to be honest. I've generally required most things
to be approved by me, and I can't remember whether we've specifically
required that, but we are getting departments to submit their
implementation plans. My main concern is to ensure that this doesn't
drag on—that, when a plan has been outlined for changes
to a public body and, therefore, concerns raised in the minds
of people who work in those public bodies, that certainty should
be created as quickly as possible, because these are people's
jobs and lives we're talking about.
Q123 Robert Halfon:
Do you recognise the quote from the Institute for Government,
which suggests that the ability of departments to manage arm's
length bodies is particularly poor? Is that right? Do you agree
with that?
Francis Maude: Well,
I think it would vary enormously, but most of them don't manage
them. The whole point is these are meant to be autonomous and
not accountable, so if there's a justification for the function
being carried out in a way that's independent of a department,
then the ability of the sponsoring department to interfere with
its management is strictly limited. I think that has resulted
in a lot of waste; for example, I think there's been huge duplication
of communications functions. A lot of arm's length bodies have
cheerfully gone ahead and spent huge amounts of money on IT projects,
when frequently there will be a comparable IT system already commissioned
somewhere else in government that they could have used. This is
one of the things about accountability that is really important:
they haven't been accountable sufficiently for the way in which
they've spent public money, so there has been this duplication,
and some of these bodies have grown out of all recognition.
Q124 Robert Halfon:
Have you got specifics to improve the civil service ability to
manage these bodies as they come in?
Francis Maude: Well,
as the functions are transferred in, there will need to be managers
who can manage them. These are not generally new functions, so
there will be someone managing these functions as it is, and people
who are carrying out the function in a public body, if that's
going to come within the department, the expectation would be
that those people will come in and run it in the department. There
may be restructuring as a result within the department.
Q125 Robert Halfon:
But do you have an estimate of how many jobs are going to be lost
specifically from those quangos that are coming into departments?
Francis Maude: No.
Again, that would be very much part of what the department's detailed
implementation plans would throw up. All departments are going
through at the moment, following the Spending Review, a huge amount
of detail: how are they going to deliver the trajectory on spending
that they have agreed with the Treasury? And this is very much
part of that and it'll be very difficult and painful.
Q126 Robert Halfon:
Some have suggested that with some of the quangos coming into
the departments, in essence, all you're doing is moving deckchairs,
and that there actually won't be any cost-saving, or very minimal
cost-saving, to the public. What's your answer to that?
Francis Maude: Well,
the answer to that is, if it is straightforwardly saying, "Here
is a reasonably freestanding function in a quango which is being
moved into a department and all you do is pick it up and move
it into the department," then there will be neither a cost
nor a saving, but it will have fulfilled our primary objective,
which is to increase accountability, because that function will
then be carried out in a way that's accountable. Separately, but
importantly, there will be a trajectory on spending affecting
that function, agreed as part of the Spending Review, that will
require the department to take out administration cost, and the
expectation is, pretty much across the piece, we're expecting
to take out a third of administration cost over the period.
Q127 Robert Halfon:
Some of these quangos will have their own buildings or have office
space. Do you estimate that you'll make quite substantial savings
from that, because will the office space then literally come into
the department, or will they still be in the buildings that they're
in, just under the separtmental aegis as opposed to their own?
Francis Maude: I
definitely expect there to be savings in terms of occupancy costs,
but it's not particularly driven by this, but this will help.
The main tool for delivering property savings is the moratorium
we've put in place, and we've just put in place some wider controls
on property, but early on, within days of us taking office, we
put in place a moratorium on signing leases or on not exercising
break points in leases without, again, my approval, and that's
for anything in central government, including arm's length bodies.
The result of that has been significant reductions in government
spending—taxpayers' money being spent on property. We are
getting out gradually. It has to be quite slow, because of the
points at which leases fall in, but it also enables us to make
decisions on property configuration in a way that benefits the
taxpayer and the Government as a whole, rather than serving the
interests of a particular department or body.
Q128 Robert Halfon:
So, in essence, you envisage some of the quango people who are
going into the department to be able to work from departmental
buildings.
Francis Maude: Well,
they may do. It will vary enormously. In general, government offices
are relatively under-occupied compared with the best practice
more widely, and that's one of the things we're seeking to address,
not just in respect of the public bodies review, but in relation
to government overhead generally.
Q129 Chair:
Can I just press you on two points? Public sector reorganisations
have a notorious reputation for costing more money rather than
saving money. How are we going to measure, in each case, that
there has actually been at least flat funding or, better still,
a substantial reduction as a result of the reorganisation rather
than just from the squeeze? Are you going to get them to use up
all their old stationery, for example?
Francis Maude: Well,
I always remember that when the then Prime Minister took the view
that the old Department of Health and Social Security was too
large and cumbersome, and it was split into the Department of
Health and the Department of Social Security, the then Prime Minister
said to Ken Clarke, appointing him as the first Secretary of State
for Health, "And I don't want you to have any new stationery
printed until the old stuff's been used up," and for months
afterwards, the letters went out with "and Social Security"
carefully crossed out, which I thought was an admirable signal,
and I would expect the same approach to be taken here.
Q130 Chair:
I remember trying to do the same in Central Office when you changed
the logo, but you wouldn't let me.
Francis Maude: That
was different.
Q131 Chair:
Can I just also press on this question of a skills gap? The Institute
for Government says that skills gaps also undermine the effectiveness
of arm's length government. "The role of sponsorship is often
undervalued in Whitehall, meaning that sponsors receive relatively
little specialised professional development, and sharing of best
practice is limited."
Francis Maude: What's
that a quote from?
Chair: That's from the
Institute for Government's submission to this Committee in their
evidence.
Francis Maude: Okay.
Q132 Chair:
Yes, arm's length bodies are independent, but they do need to
be managed by their sponsoring departments, and managed effectively,
and that seems to be what's lacking.
Francis Maude: Well,
I think I would say in general that there has been too great a—
Well, if I'm going to make a wider and rather partisan point,
I would say that in the last Government there was a reluctance
of ministers to involve themselves in the less glamorous parts
of public administration; i.e. ensuring that money is spent well
and doing the sort of stuff which I spend my day doing, which
I rather enjoy doing, but a lot of people don't find very glamorous.
I think that's simply a symptom of it. People weren't concerning
themselves with how money was being spent well, and that has to
change.
Q133 Chair:
Because modern air-to-air missiles are called "fire and forget",
but we don't want "fire and forget" quangos, because
they just atrophy. Ministers have to hold them accountable.
Francis Maude: This
is what all of this is about really.
Chair: Mr Elphicke, you
have a question and then we must move on.
Q134 Charlie Elphicke:
Just to underline the issue about lobbying, it's a serious concern
to all Members of Parliament. Will you consider issuing guidance
explicitly banning any public money being used to lobby?
Francis Maude: I
will definitely look at that, and come back to you on that, because
we are looking to tighten up the rules anyway. I would not want,
on the hoof, to say absolutely, as an absolute dogmatic thing,
that no public money should ever be spent by any public body on
lobbying.
Q135 Chair:
But if there's not a reason for having such a ban, would you let
us know, because we might recommend it?
Francis Maude: Sorry,
say that again. If there's not…?
Q136 Chair:
If there's not a reason to have a ban—or if there was a
reason not to have a ban, would you let us know before we are
in danger of recommending it against your wishes? We'd want to
know why you don't want it.
Francis Maude: Yes,
exactly. I'll look at that urgently and write to you, if I may.
I do understand the point and I understand the—
Q137 Robert Halfon:
And the distinction between lobbying government and lobbying business
and so on; to me, there's no difference.
Francis Maude: You
would take the same view on both, would you?
Chair: I think we're going
to have to curtail this bit of the conversation. We'll come back
to it, possibly.
Q138 Greg Mulholland:
Just going back to some live questions from Mr Elphicke, going
back to the idea that perhaps this really is a bit timid and is
very much not a bonfire of quangos—I'm not saying that that
should be—
Francis Maude: A
damp Sunday afternoon barbecue.
Greg Mulholland: Yes.
Francis Maude: As
one of our colleagues referred to it in the House of Commons.
Q139 Greg Mulholland:
That's an excellent phrase. The Institute for Government produced
a list of 11 different types of arm's length bodies: we've got
advisory NDPBs, executive NDPBs, other NDPBs, tribunal NDPBs,
executive agencies, NMDs, public corporations, independent statutory
bodies, special health authorities, parliamentary bodies and the
central bank. That's an awful lot of different types of arm's
length bodies. Do we really need 11 different types?
Francis Maude: Probably
not. It is a very complicated landscape. The first part of this
review is trying to find out what's the list. Under the last Government
there was no definitive list, and this probably isn't definitive
because, as we've heard in the course of this morning, there are
arguments about whether particular bodies should be inside or
outside the scope. I think you're quite right that there is a
huge variety in the ways in which bodies have been set up, the
different formats, the different ways in which appointments are
made, the different forms of governance that exist.
I'd be a little wary of trying to impose a rigid
single uniform structure on them all, because they do exist for
different purposes. Something which is a tribunal may be formally
an NDPB but would be regarded as a sort of quasi-judicial-type
body. At one stage I noticed the Supreme Court came up in the
list of public bodies, and we kind of thought that's probably
outside the scope. So, the—
Q140 Chair:
Technical function, I think.
Francis Maude: Definitely
requiring political impartiality. So, yes, it is very untidy,
and it has been a random process, actually, of establishing a
lot of these bodies, and there are some very complicated ONS-type
definitions for what counts as a public body, or an NDPB for these
purposes. There are some bodies that have a different format;
the Central Office of Information, for example, is a Non-Ministerial
Government Department, an executive agency and a trading fund,
and I haven't yet fathomed exactly how it has this tripartite
status, but it will change.
Q141 Greg Mulholland:
The Institute for Government have come up with a model of four
different types, based on different levels of impartiality. Have
you had a chance to consider that model and pass comment on it?
Francis Maude: No,
not at this stage. I'm kind of temperamentally slightly allergic
to trying to create a top-down overall scheme of arrangement for
all of this, but it is very complex and confusing, and simplification
is desirable, but I think not in order to meet the demands of
administrative tidiness. But I'll definitely have a look at that,
and thank you for raising it.
Q142 Chair:
How will the merging of the roles of the First Civil Service Commissioner
and the Commissioner for Public Appointments help enhance accountability?
Francis Maude: I
don't think it will particularly help enhance accountability.
These are both roles that require political impartiality, for
obvious reasons. It will help to drive some modest efficiency
savings—one person rather than two—so I think it's
worth doing, but it's not particularly about accountability.
Q143 Chair:
Did you consult about this?
Francis Maude: I
think we consulted the First Civil Service Commissioner and the
current Commissioner for Public Appointments.
Q144 Chair:
And did they agree?
Francis Maude: Yes.
Q145 Chair:
Did they have an option?
Francis Maude: They're
both very robustly independent individuals, as you would expect
in those roles.
Q146 Chair:
PASC has previously rejected the idea of a single ethical regulator,
and recommended a more collegiate arrangement, but by combining
the roles, aren't you effectively abolishing the Office of the
Public Appointments Commissioner?
Francis Maude: No,
we're simply saying that that function can be carried out by the
same person who is the First Civil Service Commissioner. The support
functions for a variety of these offices—including the Committee
for Standards in Public Life, the Office of the Commissioner for
Public Appointments, the Civil Service Commission—all operate
in the same building, and there is a certain amount of common
support, I think. I haven't involved myself very much in how that's
organised, because these are bodies, obviously, which expect to
be independent and fairly resistant to ministerial intervention,
rightly.
Q147 Chair:
My predecessor Committee has previously recommended against a
merger.
Francis Maude: Against—?
Q148 Chair:
Against such a merger, and Sue Cameron in the FT wrote
last week that "this smacks of dismantling an important safeguard
for our impartial civil service".
Francis Maude: I
don't follow that at all. I haven't read Sue's piece, and I'm
sure the reasoning is impeccable, but I don't see how she could
reach that conclusion. The role of the Civil Service Commission
has just been put in statute, so in fact this is about to be the
creation of another NDPB, because the Civil Service Commission,
having been given statutory form in the Constitutional Reform
and Governance Act, which was passed just before the election,
now for the first time ever has a statutory existence, so it has
been enhanced, not diminished.
Chair: Minister, thank
you very, very much indeed for your time and answers this morning.
Francis Maude: Thank
you. It's a pleasure.
Chair: We look forward
to preparing our draft Report.
Francis Maude: Very
good. Thank you.
Chair: Thank you very
much.
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