73. The Government has stated that the primary
motivation behind the reforms to public bodies is to improve the
accountability of government. Speaking in the House about the
outcome of the review process, Frances Maude, Minister for the
Cabinet Office, argued that the changes were:
principally about increasing accountability - the
important presumption that when an activity is carried out by
the state, and there is no pressing need to do so at arm's length
from government, it should be carried out by someone who is accountable
democratically, either a Minister who is accountable to this House
and, through this House, to the public, or a local authority that
is accountable to local residents.
This is a reasonable aim for the Government to pursue.
The current accountability arrangements are not always easy to
understand and the Government is often held responsible, by the
media and the public, for activities of bodies that it has a limited
ability to control.
Accountability or cost savings?
74. The Government hopes to improve accountability
by bringing the functions of public bodies back into departments
unless there is a reason why the function needs to remain at arm's
length from ministerial influence. By doing so ministers, or other
elected officials, would be directly responsible for the majority
of government activities and could be held to account by Parliament
and the electorate for the discharge of those functions. As Mike
Penning, Parliamentary Undersecretary of State at the Department
for Transport told us, a significant feature of his activity as
minister had been to pull in more closely a number of departmental
agencies. "I have several large agencies that under the
previous Administration were given huge autonomy; I've reined
that autonomy in as hard as I can."
75. Not all of our witnesses were convinced that
improving accountability was the main factor motivating the reforms.
Professor Flinders, Sheffield University, argued that originally
the intention had been to save money. He believed that it was
only after the election that the focus of the debate shifted towards
I think it's quite clear that pre-election and just
after the election the reform was couched in the language of efficiency
savings; it was to save money. Only in recent weeks did the focus
drastically shift towards increasing accountability. I have spoken
to ministers who tell me that that clearly happened because when
you sit down and look at all these executive bodies, you suddenly
realise that in opposition it is much easier to throw bombs, but
when you are in charge, you realise that a lot of these bodies
do a lot of good work and you don't want them back in your departments.
76. The Conservative party's manifesto makes
the following comments on public bodies:
Over the course of a Parliament, we will cut Whitehall
policy, funding and regulation costs by a third, saving £2
billion a year, and save a further £1 billion a year from
We will cut the unaccountable quango state and root
The explosion of unaccountable quangos, public sector
'nonjobs' and costly bureaucracy is an indictment of Labour's
reckless approach to spending other people's money. Once again,
it undermines public trust in the political process.
Under Labour, the quango state has flourished. Government
figures show that there are over 700 unelected bodies spending
£46 billion every year, but this does not even include the
range of advisory bodies, public corporations, taskforces and
regional government bodies that have sprung up under Labour. We
believe that Ministers should be responsible for government policy,
not unelected bureaucrats.
77. These comments indicate that concerns about
both cost and accountability were motivating the Conservative
party's thinking. A similar mix of concerns can be found in David
Cameron's speech on public bodies that he made on 6 July 2009.
The growth in the number of quangos, and in the scope
of their influence, raises important questions for our democracy
Questions of accountability - now vital in the light
of the damaged trust in our political system.
Questions about public spending control - now vital
in the light of the debt crisis.
And questions about sheer effectiveness - increasingly
urgent as people see their taxes going up, but the quality of
their lives going down.
However he then went on to make a number of points
which seemed to highlight the importance of using public body
reform to reduce government spending. Most notably when he said
"we'll never get control of public spending unless we
get control of quangos."
78. When we asked the Minister whether cost savings
were a consideration in the review he replied that:
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 functionssometimes functions which were
in conflict with each otherseeking 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.
ACCOUNTABILITY AND THE REVIEW PROCESS
79. The process that Government has used in the
review to evaluate public bodies partly supports the claim that
accountability was the main motive for the reforms. Both the scope
of the review and the three "main" tests were designed
to establish the appropriate level of ministerial accountability
for a public body's function.
80. However, the tests that the Government announced
would be used as part of the review do not seem to be the only
tests they are applying. The Public Bodies Reform Bill [Lords]
includes a different list of factors that the Minister must have
regard to when making reforms to public bodies. When we questioned
the Minister about this discrepancy he denied that the Government
had "moved the goal post" insisting that "everything
we [the Conservatives] said about this before the election made
it clear that this was principally about accountability."
PRIMACY OF ACCOUNTABILITY?
81. Some reforms proposed by the review do not
seem have any basis in accountability. A number of bodies that
were reviewed have had their outcome listed as "retain and
reform". In most cases there is very limited information
available about the nature of these reforms. But in some cases
the short description of the "substantial reform" suggests
that cost savings and not accountability drove individual changes.
For example, the Financial Reporting Council is to be retained
and "substantially reformed" the reform being
to "remove reliance on Government funding". The
reforms to the Equalities and Human Rights Commissions are intended
to ensure a "better focus on its core regulatory functions
and improved use of taxpayers' money." Similarly, Passenger
Focus will be reformed to focus on "core role of protecting
passengers, while reducing cost to taxpayers."
82. We asked Sir Gus O'Donnell, Cabinet Secretary,
to write to us with the latest estimates of the total savings
likely to be achieved by the review. In his response he emphasised
that the "primary reason for the reforms to public bodies
is to ensure that accountability rests in the right place."
But he continued that he expected
"the exercise will reduce duplication
of effort and activity, either by stopping functions that are
no longer vital to the delivery of public services, or by streamlining
activities and reducing administrative costs."
He was not able to give us an estimate for the total cost saving,
merely saying that public body reform would
"make a contribution" to
the achievement of wider targets for administrative savings.
83. At the outset, both accountability
and value for money were considerations, but the extent to which
quangos reform would yield significant savings was probably exaggerated.
This created a false expectation that the review would deliver
greater savings than it has been able to realise. Consequently,
the Government appears unsure about the extent to which the reform
will result in significant savings for the taxpayer.
84. We questioned why it was not possible to
use the review to deliver significant reductions in public expenditure.
Mr Sinclair, Taxpayers' Alliance (TPA), certainly thought that
there was scope for the review to have delivered greater cost
Anyone who has tried to put together a package of
cuts that would add up to a substantial amountcertainly
we found thiswithout getting rid of some of the larger
quangos, which are the ones which haven't been touchedas
you say, haven't been hit enough in this reviewwill find
it very hard to make those sums add up without putting what may
be an untenable burden on household budgets. That is why more
of these quangos need to be abolished.
85. We believe that the answer to this question
is that there is a limit to the amount of savings that can be
found by changing how functions are delivered. As the IfG notes
in its report:
much of the money 'spent' by NDPBs could not realistically
be reduced by simply abolishing a body: 75% of NDPB costs are
grants that are passed on to others, funding universities, legal
aid and other core government functions. To make cuts in these
areas, difficult policy decisions would be required.
If the Government wishes to make
significant savings in public body expenditure it needs to take
a more fundamental look at which services it wishes to continue
to provide. While it is possible to make greater efficiency savings,
there will be a limit to the reductions that can be made in public
body expenditure unless a political decision is taken for these
organisations to do fewer things. We do not believe that the Government
has used this review to undertake this sort of analysis - another
reason why the Government should have taken longer to conduct
Doctrine of ministerial accountability
86. The Prime Minister summarised this argument
in his speech of 6 July 2009 when he said:
Our starting presumption is a preference for democratic
accountability over bureaucratic accountability. That means that
wherever possible, we will expect ministers to exercise their
responsibility through their departments.
One argument advanced in favour of bringing functions
back into departments is that previously public bodies had allowed
ministers to evade responsibility for decisions that they should
have been accountable for. Mr Sinclair, Director of the TPA, argued
that when a department was directly responsible for delivery "you
don't have that ability to blame an outside body when things go
wrong." The TPA's report
ACA to YJB: A Guide to the UK's Semi-Autonomous Public Bodies
cites the delay in the marking of SATs papers in 2007 as an example
where a public body (in this case QCA) was blamed for decision when
in reality ministers had been closely involved.
87. The Minister made a similar point arguing
"in the past, various public bodies were set up in order
to avoid ministers having to take responsibility for difficult
He believed that ministers should be responsible for these
decisions "that seems to us [to be] what ministers are
for: to take decisions and justify them."
Essentially this argument can be reduced to the claim that there
are some public bodies that perform functions that do not require
independence from ministerial influence. Therefore, these are
functions properly performed by central departments.
88. Francis Maude said that the advantage of
having responsibility reside with a minister is that "minister[s]
can be held accountable in Parliament for how that function is
carried out, how the policy is set and how the policy is administered."
In essence this was an argument based on the primacy of Parliament
as a forum for accountability. The Minister summarised his position
[...] it all depends whether you believe in parliamentary
accountability. Call me old-fashioned: I believe in parliamentary
WILL IT WORK?
89. Not all those who contributed to our inquiry
agreed with the Minister's view that his proposals to transfer
functions from public bodies back into departments would result
in greater accountability. Those who currently served on public
bodies argued that there were already a number of mechanisms in
place to ensure that they were suitably accountable for their
actions. Ms Done, Chair, Youth Justice Board described the various
ways in which her organisation was held to account including:
the Secretary of State setting performance targets and signing
the corporate plan and annual review; being audited by the NAO;
and having a senior manager from the department attend board meetings.
Ms Chester of Sport England made similar points.
90. When asked if these reforms would lead to
them being more accountable Ms Chester said she was sure the current
standard of accountability and transparency would be "maintained"
following the merger of Sport England with UK Sport. Ms Done did
not believe that the transfer of youth justice functions to the
MoJ would lead to any increase in accountability "because
quite honestly we're very closely working with them [ministers]
91. Many of the academics and think tanks which
contributed to our inquiry were equally unsure whether these reforms
would deliver greater accountability. The IfG state in their evidence
that they do not think that "rationalisation of the arm's
length landscape will necessarily improve accountability."
They continued that:
there may be a trade-off between the relative transparency
of decision-making in an ALB, with a Board and Chief Executive
publically answerable for decisions, and more direct ministerial
Similarly, Christopher Banks, Chair of the Public
Chairs Forum, argued that increased accountability is not a necessary
outcome and will depend greatly on the detail of the new arrangement.
Professor Flinders was perhaps the most scathing of the Minister's
description of accountability, saying:
I was watching the appearance of the minister in
front of the Committee and it seemed that there was a very simple
line: "Bringing functions to departmentsaccountable.
Beyond departmentsunaccountable." That is like going
back hundreds of years.
He concluded that there were different forms of accountability
beyond traditional ministerial accountability.
Other forms of accountability
92. We explored these other forms of accountability
with our witnesses. One of the benefits identified in the current
system was that a public body, with a Chief Executive and a Board,
responsible for defined policy area, were in some ways more accountable
than civil servants who perform similar functions from within
departments. The IfG expanded on this point in Read Before
ALBs are not as exempt from blame and sanction as
commentators sometimes suggest. Indeed, NDPB chairs often argue
that they are in practice much more accountable than their civil
service counterparts. They are accountable to the department and
the minister, they can be summoned to appear before a select committee,
and while civil servants are rarely named and can take refuge
behind the doctrine of ministerial responsibility, ALB chairs
and CEOs appear in the media in their own right and can carry
the can for their decisions.
93. Another frequently voiced concern was moving
a function from a public body into a department meant running
the risk of neglecting some important public function. As Mr Singh,
the Social Fund Commissioner, stated in his evidence, abolishing
public bodies risks "weakening lines of accountability
and visibility for related functions, as they compete for attention
within a wide range of departmental concerns and priorities."
Ms Done said:
There is a big issue for anyone who's interested
in youth justice about how, when moving into a very big department
like the Ministry of Justicewhich has got a huge focus
on adultsthe five per cent that is the youth justice system
gets the attention it needs.
94. In addition to a lack of attention from the
department, Professor Flinders argued that these reforms could
lead to less challenge and input for outside organisations. Evidence
from previous reorganisations showed that these reforms were unlikely
to increase accountability because they would undermine the relationships
that had developed between bodies and their stakeholders in civil
society. Such relationships would not survive the functions transition
back into departments:
In Wales, where part of the devolution debate was
to get rid of all these terrible quangos, the Welsh Assembly Government
has taken them back in and now there is a backlash because all
the different civil society groups that had built very positive
working relations with those bodies now say those relationships
and accountability channels have been closed down.
Ms Done also used her evidence to highlight the importance
of these other channels of accountability.
In terms of wider accountabilities, which I think
are really important, we're very accountable to the youth justice
system as a wholeall those people out there working with
young offendersand that's done through our relationships
at local and national level. [...] So we feel very accountable.
In fact the prison reform lobby is not unwilling to come forward
and be demanding information at any time or explanations. So very
accountable for what we do.
The Executive Agency model
95. Professor Talbot argued that bringing a function
into a department could make it more difficult for a minister
to exercise direct control over it, owing to the number of levels
of civil service management between the minister and the responsible
policy officer. Speaking about the establishment of Executive
Agencies in the 1980s. He said that:
The reason that at the time people argued that it
would improve ministerial accountability [...] was because if
you take a large department like the Home Office, for example,
a small part of that department, something like [... the] Passport
Agency as it now is, [it] is in practice, within the normal hierarchical
structure, very difficult for ministers to hold to account because
they have to go down through the whole chain of command, through
about four or five layers of civil servants, before they get to
it. The creation of executive agencies created this parallel structure
outside of that, where agency Chief Executives were allegedly
directly accountable to ministers for what they were doing in
running the agencies. So that's where it was argued it improved
While this is an interesting argument, there is a
fundamental difference between Executive Agencies and public bodies.
Ministers are directly responsible for the activities of Executive
Agencies, which is not the case with public bodies. However, it
does suggest a possible solution to the problem the Government
currently faces. Where possible, it should convert public bodies
into Executive Agencies; this would allow ultimate responsibility
to lie with ministers and allow them to have a degree of control
to match that responsibility but without the risk of functions
getting ignored within a large departmental structure.
96. The Government has not made
the case that these reforms will improve accountability. We believe
that its narrow definition of accountability has inhibited its
ability to develop mechanisms that will actually deliver a more
responsible and transparent system. We sympathise with the desire
of ministers to have direct responsibility for functions for which
they are likely to be held to account. But we also believe that
bringing functions back into sponsor departments is likely to
undermine other channels of accountability, particularly with
relevant stakeholder groups, and risk leaving policies fighting
numerous other priorities for ministerial attention. This will
mean less effective accountability and challenge on a day-to-day
97. We believe that the Executive
Agency model offers a possible solution. It allows ministers direct
responsibility for policy, combined with the ability to influence
it, while still enabling high quality "day-to-day" accountability
by stakeholder groups. We recommend that the Government consider
converting those organisations which it intends to retain and
move into Government departments into Executive Agencies. If this
is not feasible, we recommend the Government explain why this
is not a workable solution.
Accountability to Parliament
98. Another important way that public bodies
can be held to account is through the Select Committee system.
Departmental Select Committees are charged with the scrutiny of
public bodies that fall within their department's remit, and many
appointments to public bodies are subject to a pre-appointment
hearing. However the Minister did not believe that this was a
substitute for having a minister directly responsible for a policy
area. "They [Chairs of public bodies] can be summoned
in front of a Select Committee, for sure, but the essence of parliamentary
government is that ministers are accountable in Parliament."
99. We believe that accountability to Parliament,
including the appearance before Select Committees is an important
mechanism for scrutinising public bodies. Many of our witnesses
argued that there should be a greater role for Select Committee
in monitoring the activities of public bodies. We
intend to bring forward proposals to strengthen Select Committees'
role in scrutinising changes to public bodies in our future report
on the detail of the Public Bodies Reform Bill.
86 HC Deb 14 October 2010, col 505 Back
Oral Evidence taken before the Public Administration Select Committee
on 7 December 2010 Q 231 [Mike Penning MP] Back
Q 239 [Professor Flinders] Back
Q 52 (Our emphasis.) Back
Please see para 8 ff for a fuller description of the scope of
the review and tests used. Back
Q 55 Back
Ev w13 Back
Ev w13 Back
Ev w13 Back
Q 286 Back
Institute for Government, Read Before Burning, p11 Back
Taxpayers' Alliance, ACA to YJB: A Guide to the UK's Semi-Autonomous
Public Bodies, p 9 Back
Q 51 Back
Q 51 Back
Q 87 Back
Q 24 [Ms Done] Back
Q 24 [Ms Chester] Back
Q 28 Back
Ev 50 Back
Ev w2 Back
Q 240 Back
Institute for Government, Read Before Burning, p 43 Back
Ev w4 Back
Q 39 [Ms Done] Back
Q 239[Professor Flinders] Back
Q 24 [Ms Done] Back
Q 238 [Professor Talbot] Back
Q 76 Back