3 Future Reviews
40. In his statement to the House the Minister
made clear that he did not regard the current review of public
bodies as a one-off exercise. He told the House that this would
be a recurring process, with all bodies being subject to a "rigorous
triennial review to ensure that the previous pattern of public
bodies outliving the purpose for which they were established will
not be repeated".[49]
41. Many organisations have supported the need
for there to be regular reviews of public bodies to ensure that
they still served a useful purpose and to guard against "function
creep". John O'Connell, Research-Director, Taxpayers'
Alliance warned that unless a more rigorous and robust approach
was taken to reviewing public bodies they were likely to steadily
increase their budget and responsibilities.[50]
42. The IfG's Read before Burning report
recommended that the Government introduce Governance and Performance
(GAP) reviews for all public bodies, every three to five years.
These reviews would:
Ensure that both ALBs and their sponsor departments
are delivering against their responsibilities and that these responsibilities
are clearly defined. Reviews should be conducted by individuals
who are sufficiently independent of government and the review
methodology should include a 'peer review'.[51]
43. This Government is not the first to introduce
a system of reviews for public bodies. Until eight years ago,
each government department was obliged to conduct five-yearly
reviews of the public bodies for which they were responsible.
These "Quinquennial Reviews" were scrapped after the
2002 Alexander Report found that 'an estimated £5 million
per annum is spent on Quinquennial Reviews, yet there are few
examples of the […] process itself producing significant
business change.'[52]
This report concluded that this was largely due to the fact that
the reviews were conducted by departments themselves. This led
to them failing to provide challenge to ministers on decisions
to set up and retain specific bodies. In addition, they did not
assess how departmental practices might be inhibiting public bodies'
effectiveness.
44. Quinquennial Reviews were replaced in 2003
by 'end-to-end' or landscape reviews linked to Public Service
Agreement targets set for each government department. The intention
was to examine the entire process from policy to delivery. These
were entirely optional for departments. As a result, several large
public bodies have not been subject to review for 10 years or
more, while others have never been subjected to independent review.[53]
45. Professor Talbot emphasised the need for
a new process to avoid the mistakes made by previous reviews.
The agencification of executive non-departmental
public bodies in the 1990s, and most of the triennial or quinquennial
reviews that took place then led to no change at all to those
bodies. In most cases, they were fairly routine processes [...]
they were conducted entirely within the ministries and there was
no external input into those processes.[54]
To avoid this he suggested that the new arrangements
include "external input, some peer review element to it
and some parliamentary input."[55]
46. We asked the Minister how this new review
process would operate. He explained that he foresaw it operating
in a very similar way to the review that the Government had just
conducted. However, he also said that transparency, effectiveness
and value for money could also be included:
what I envisage is that the triennial reviews will
go through the same sort of process that we've done [...] but
also subsequently to look at efficiency, transparency and value
for money, so that those factors can be fed into the decision-taking.[56]
47. We welcome the Minister's
comments which indicate that future reviews will include considerations
about efficiency and value for money. This seems a sensible way
to proceed. However, we would ask him to clarify how it will avoid
some of the flaws of previous review processes, particularly the
lack of external input and challenge.
48. The cost and burdens involved in the previous
Quinquennial review process was one of the main reasons it was
discontinued. We asked the Minister how he would ensure that the
current system would be more cost-efficient. He seemed confident
that devising a less expensive arrangement would not be difficult:
"I don't know how on earth they managed to spend £5
million doing that."[57]
49. We are pleased that the
Minister was confident that he would be able to devise a more
cost-effective review system than previous efforts. We invite
him to provide us with his most recent estimate of the cost of
the future review process.
Reviews and the Public Bodies
Reform Bill
50. When asked whether the process for conducting
future reviews should be written into legislation Professor Flinders
replied that "some acknowledgment that a regular review
of some kind would be a matter of common good governance [...]
would be very helpful." The other academics who gave
evidence to us agreed with this sentiment.[58]
51. When this suggestion was put to the Minister
he admitted that the thought had not occurred to him. He indicated
that he would be willing to consider an amendment to put the review
system on a statutory footing.[59]
52. We welcome the Government's
intention to introduce a regular review of public bodies. We recommend
that the process for conducting these reviews, including the criteria
that they will be evaluated against, should be included in the
Public Bodies Reform Bill.
49 HC Deb 14 October 2010, col 505 Back
50
Q 301 Back
51
Institute for Government, Read Before Burning, p13 Back
52
Cabinet Office, Better Government Services: Executive Agencies
in the 21st Century (The Alexander Report), 2002 Back
53
Institute for Government, Read Before Burning, pp 37-38 Back
54
Q 252 Back
55
Q 253 Back
56
Q 101 Back
57
Q 99 Back
58
Q 258 Back
59
Q 100 Back
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