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

Written evidence from Christopher N Banks CBE


  In common with many business people who become involved in public service, my motivation has been to use the skills I have developed and the experience I have accumulated (for example as MD of Coca-Cola GB and Chairman of my own business) to help improve the efficiency and effectiveness with which public services are delivered; and in so doing contribute in a small way to improving our country.

  My particular focus has been on helping young people and adults, irrespective of background or abilities, to achieve their potential. As a founding member and subsequently Chair, of the Learning and Skills Council, I was closely involved in its establishment, management, abolition and transition to successor bodies. I hope that my comments will add a practical perspective which complements others the Committee will have received.

  I remain intent on making a contribution and currently chair the Public Chairs Forum (PCF), a network of Chairs of public bodies committed to improving public service delivery ( I offer these comments, however, in a personal capacity and not on behalf of other Chairs.


  This submission focuses on the process used to reform Arms Length Bodies and considers that:

    — A more transparent and engaged process is likely to lead to better results—this is not happening at the moment, and is set against a backdrop clouded by counterproductive rhetoric.

    — The Government needs to ensure service continuity as some ALBs manage big sums of money and perform important functions. This means that effective management of transition is very important—focusing on future performance as well as on closing down.

    — The people aspects of these changes are crucial—but have been absent so far.

    — Chairs and non-execs have a key role to play. Government should use them and make sure they remain in post to lead and support the transition.

    — The Boards of remaining ALBs should be reformed to ensure they are representative, to reinforce neutrality and to increase public confidence.


  1.  There is an assumption being made that Quangos are a bad thing and therefore the number of them should be reduced. But before deciding what sort of organisation or structure is appropriate, the starting point has to be decide the objectives that need to be achieved and the work that needs to be done to achieve them. By starting here, government will be best placed to evaluate the most efficient and effective way to organise itself in order to deliver these objectives—whether it be through re-organised ALBs, taking services back into departments, or stopping the delivery of this function altogether. It will make it easier to develop a system with clear focus, tailored to achieving the end goal.

  2.  The principle of using the three tests outlined by government in conjunction with the nine value for money questions detailed in the spending review framework document seems appropriate to me. Again, rather than focusing on how many public bodies should be abolished, it is instead an opportunity to consider whether the right organisation is in place to get these things done. The creation of the Office for Budget Responsibility by the new Coalition Government demonstrates that the Government understands that there are circumstances when putting a function at arm's length can increase public confidence.

  3.  My experience in the private sector (and the inherited wisdom) is that the majority of mergers (maybe as many as 70%) fail to deliver the benefits envisaged when they are planned. All too often, instead of 2+2=5 (which may have been in the business plan), the result is 2+2=3. Sometimes, this may be because the strategic rationale is not sound. But more often than not, people issues and in particular culture issues are cited as the reason for failure to achieve the business result.

  4.  The process so far appears to be carried out without much focus on people issues. The anti-quango rhetoric prevalent in the media coupled with the uncertainty created by the recent leaked document to the Telegraph on 23 September 2010 are unhelpful. Transparency in the process is important, provided that there is an element of control to ensure affected organisations are informed of key decisions before information is put in the public domain.

  5.  Communication and engagement with ALB heads throughout the process is crucial in order to alleviate uncertainty and enable management to provide leadership and direction to staff. This will help to ensure performance within public bodies is not affected.

  6.  There can be a sense of tokenism in engagement with ALBs in the current decision-making process. One longstanding Chair recently told me he had the impression that the Government's version of involving an ALB in the decision about its future appears to be telling it that it is being reviewed and that they will be told of the outcome at the end of process. Chairs understand the need for cuts in the current climate and want to make a positive contribution to the reforms.

  7.  Chairs of Public Bodies are able to offer unique insight and expertise on the potential to reorganise or restructure their organisations and there is no doubt that government could benefit from tapping into this when deciding whether an ALB should be merged, abolished or reabsorbed into a department. Involving the Chair and non-executives may prove invaluable as they have a detailed understanding of their organisation and its workings yet are able to adopt more objective, independent approach than members of the executive team. The PCF has been supporting Chairs by encouraging them to think radically about alternatives to their current organisations, including publication of a useful guide "Alternative models of delivery". You can find a copy at:

  8.  According to the recent Institute for Government report "Read before burning", Executive NDPB's alone (a sub-set of ALB's) are responsible for the management of £42 billion in the delivery of public services. The scale of the potential changes is unprecedented, so it is vital that the reductions in overhead costs achieved by mergers, abolitions and changes to new arrangements are not wiped out by deterioration in the service delivered.

  9.  Transition management is therefore crucial in minimising the disruption caused by changes to the structure and remit of public bodies. It is important for departments and ALBs to pay as much attention to legacy bodies as to successor bodies and new arrangements, because they will continue to be the delivery bodies until handover. Ensuring departments have equal responsibility and vested interest in both parts, although more challenging, is vital.

  10.  The continuity of management and the non-executives is very important during any restructuring. Internal focus is very easy at these times, and the non-executive plays an important role in ensuring the CEO remains focused on the customer. Attention should be paid to retaining management and non-executives during these periods.

  11.  Whether the abolition of public bodies will lead to increased accountability depends very much on what the new arrangements are, but if there is a genuine desire to increase accountability, it should be made very clear where this should sit from the offset.

  12.  In order to improve the accountability and effectiveness of remaining public bodies, Chairs and their boards continue to be appointed through open competition to ensure political neutrality. Boards should be constructed to reflect the communities which they serve and should properly fulfil their role of scrutiny as well as for strategy.

  13.  Chairs of Public Bodies should be encouraged to share best practice within their organisations via member organisations like the PCF. There needs to be rigorous control of remit, purpose and objectives of all future arrangements, to avoid mission creep and to hold public bodies to account.

  14.  I believe the work of the PCF with Chairs on their key role through the series of impending transitions is important; particularly in ensuring staff are helped through the inevitable uncertainty. By bringing Chairs together to share best practice, running seminars and producing publications specifically focused on these issues, the PCF is able to improve the efficiency and effectiveness of public services. The PCF is running a joint seminar with the Institute for Government which will consider strategies for managing transitions. As an outcome of this meeting, it is our intention to publish a comprehensive guide for ALBs and departments on closing down, merging and restructuring organisations.

October 2010

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