5 Sponsoring
Public Bodies
66. During our inquiry we encountered wider concerns
about departments' abilities to sponsor the public bodies that
fall within their remit. One of the key findings of the IfG's
report on arm's length bodies, Read Before Burning, was
that:
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. Good performance
management is essential for effective arm's length government,
yet Whitehall's capability in this area is particularly weak.
Many departments do not make clear their expectations in terms
of performance, nor the sanctions for different levels of overspending.[76]
Sir Ian Magee, IfG, gave some examples to illustrate
the problem when he appeared before us to give evidence.
The evidence that we collected suggested that their
interventions ranged on the one end of the spectrum from micromanagement
with a number of different Directors General getting involved
so that the agency was almost inhibited from doing its job properly,
right the way through to almost benign neglect on the other, where
the agency or non-departmental public body has taken on its own
life, as it were, and where Secretaries of State get frustrated
because a policy unit has built up within the non-departmental
public body that appears to be mirroring and duplicating the functions
within the department.[77]
Professor Talbot, Manchester University, said that
this was a theme that had emerged from his own research. He believed
that departments found it very difficult to establish a suitable
relationship between themselves and their public bodies and ended
up tending toward one of two extremes:
either the parent department taking this liberal
parent approach of, "Well we don't have to manage that anymore
because it has been set up as an agency" or whatever it has
been called in different countries, or they continue to micromanage
as if it was still part of the department. They find it very difficult
to develop a more adult relationship[...] That is a major problem.[78]
67. When these points were put to the Minister
he replied that most Government departments did not manage their
public bodies. He explained that this was because:
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.[79]
We are concerned about this response, which seems
to indicate that the Minister has adopted the "liberal
parent" approach that Professor Talbot warned against.
68. This also does not reflect the reality of
public bodies' relationship with their sponsoring departments.
There is a role for sponsoring departments to play in providing
oversight. Frances Done, Chair of the Youth Justice Board, gave
several examples of the way the MoJ was involved in overseeing
her organisation:
the Secretary of State:[..] sets my target for performance
and the performance targets for the Youth Justice Board. Ministers
sign our corporate plan [...].[80]
The Prime Minister, when in Opposition, made it clear
in his speech of 6 July 2009 that even when powers were devolved
to public bodies it did not mean that the Minister had no role
to play:
Even when power is delegated to a quango, with a
new Conservative government, the minister will remain responsible
for outcomes. They set the rules under which the quango operates.
And they have the power to ensure that the people operating the
quango are qualified to do the job.[81]
69. The Cabinet Office's own guidance on non-departmental
public bodies also requires sponsoring departments to have an
oversight of public bodies that fall within their remit:
NDPB managers should have: clear objectives and the
means to measure output and performance against them, clear responsibility
for best use of resources including output and value for money;
and access to the necessary management information, training and
expert advice.
How these functions are dealt with should be left
to the NDPB; but it is important that the sponsor department's
Accounting Officer should ensure that adequate arrangements are
in place.[82]
70. The most likely reason for this confusion
over the proper relationship between departments and the bodies
they sponsor is the fact that there are numerous different types
of public bodies. Different types of public body are supposed
to be subject to different levels of involvement with their parent
department, but the lack of clarity about these different types
is leaving departments unsure about what approach to adopt. As
Professor Talbot explained:
if you have too many different sorts of relationships
between your various satellite organisations and the corporate
centre, it makes it incredibly difficult for the corporate centre
to know what sort of managerial relationship it has with these
different bodies.[83]
We will return to the issue of how the Government
could simplify the public bodies' landscape in Chapter 7.[84]
71. Departments need better guidance about how
their sponsoring role should strike the right balance between
oversight and independence. The most recent guidance on public
bodies was issued over four years ago and is largely silent on
this issue. We welcome the indication, given in the Cabinet Office's
most recent memorandum, that the Government is revising its guide
to departments on public bodies to include "guidance and
examples of good practice, on sponsorship."[85]
72. The Cabinet Office should
revise its guidance on public bodies as quickly as possible, placing
more emphasis on the proper, on-going relationship between departments
and the organisations they sponsor. It should make clear what
kind of decisions are purely the responsibility of the bodies,
when the department should be consulted and whether any decisions
- such as the overall business plan - should be subject to ministerial
approval.
76 Institute for Government, Read Before Burning,
p12 Back
77
Q 256 Back
78
Q 257 Back
79
Q 123 Back
80
Q 24 [Ms Done] Back
81
http://www.conservatives.com/News/Speeches/2009/07/David_Cameron_People_Power_-_Reforming_Quangos.aspx
Back
82
Cabinet Office, Public Bodies: A guide for Departments, chapter
4 paragraph 2.3.1-2.3.2,July 2006 Back
83
Q 257 Back
84
See para 124 ff. Back
85
Ev 63 Back
| 
