Smaller Government: Shrinking the Quango State - Public Administration Committee Contents

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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