Written evidence from Christopher N Banks
CBE
BACKGROUND
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
(www.publicchairsforum.org.uk). I offer these comments, however,
in a personal capacity and not on behalf of other Chairs.
EXECUTIVE SUMMARY
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.
KEY POINTS
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: http://www.publicchairsforum.org.uk/alternative-models-of-service-delivery-report-%e2%80%93-26-july-2010/
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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