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


Written evidence from the Appointments Commission

1.  INTRODUCTION

  1.1  The Appointments Commission exists to build better boards for the public sector through the attraction, appointment and development of the best possible people. We are responsible for a wide range of public appointments to health and social care bodies sponsored by our host department, the Department of Health. The Commission also provides recruitment services to NHS foundation trusts and government departments across Whitehall and delivers a comprehensive induction programme during the first year of appointment.

  1.2  Established in 2001, the Commission has developed the expertise required to support the Department of Health, NHS partners and government departments across Whitehall in making independent and transparent appointments, as well as promoting robust governance arrangements to strengthen public confidence, accountability and transparency. Significant policy changes within health and social care mean the Commission will be abolished in April 2012 but until then we will continue to play an important role in supporting good governance arrangements across the public sector.

2.  THE RESPONSE

  2.1  The Coalition Government's Programme for Government set out the intention to reduce the number of public bodies, with the twin aims of cutting costs and strengthening accountability. The Public Bodies (Reform) Bill will set out proposals to provide ministers with greater powers to abolish, merge or transfer the functions of public bodies.

  2.2  The Commission has focused this submission on the areas in which we are acknowledged experts. It is important that the governance implications of the reforms are considered to ensure that good governance is not compromised. Six principles that should be taken into account when strengthening governance arrangements for public bodies, drawn from the 2010 publication Healthy NHS Board: Principles for Good Governance which the Commission helped to develop, are set out below. These principles underpin the comments in this response. Governance should:

    2.2.1 Command public confidence and clearly specify roles and responsibilities;

    2.2.2 Provide accountability through independent scrutiny, constructive challenge and transparency in decision-making;

    2.2.3 Provide financial stewardship, safeguard public funds and manage potential conflicts of interest;

    2.2.4 Ensure effective public and staff engagement;

    2.2.5 Promote equality and diversity; and

    2.2.6 Follow a fair, transparent and rigorous process in making appointments to boards or committees.

3.  GOVERNANCE CONSIDERATIONS

  3.1  The governance implications of transferring functions into departments and for public body mergers are considered below.

Departmental absorption of ANDPBs

  3.2  The key role of many public bodies, such as advisory non-departmental public bodies, is to give impartial advice and information to ministers. It is important that the actual and perceived independence of this advice is secured under the new arrangements if public confidence is to be maintained.

  3.3  The status, internal structure and "identity" of any public body function that is transferred into a department will have to be clear, together with arrangements to ensure that ministers are able to access impartial and objective advice. For example, openness and transparency about the membership and terms of reference would provide the public with confidence that ministers were receiving expert advice on a range of subjects affecting public life and importantly, that this advice was impartial. To promote stability and support continuity of expertise into the new arrangements, the existing board or committee members could be transferred.

  3.4  In the longer term, membership will need to be refreshed. We believe it is important that there is a proportionate, open and transparent process based on merit for making future appointments to those public bodies that may be absorbed into departments.

  3.5  Our experience of supporting non-executive and committee members in the health and social care sector shows that robust induction, training and ongoing appraisals for members is crucial to ensuring that they are able to contribute effectively. It is important that appropriate training and induction arrangements are put in place for new members responsible for discharging the functions of absorbed bodies.

Departmental absorption of ENDPBs

  3.6  From our experience, executive non-departmental public bodies (ENDPBs) have benefited enormously from having strong and visible boards with both executive and non-executive members. Recent research has found statistically significant evidence to show good board governance in the public sector makes a real difference to performance, particularly with regard to the better use of resources.[5]

  3.7  Bringing skills and expertise from other sectors, notably from the private sector, the independent oversight and scrutiny provided by Chairs and non-executives has strengthened public accountability, particularly around assuring that public funds are being used effectively. Where current ENDPB functions are to be absorbed into a department, it will be important that every effort is made to retain the specific skills and experience of non-executives to support the successful transfer of functions and to provide an ongoing benefit of independent scrutiny and external expertise and perspectives.

  3.8  As with advisory bodies, new members of these bodies should have access to appropriate training and induction arrangements.

Mergers with other public bodies

  3.9  The Public Bodies (Reform) Bill proposes strengthened powers to merge public bodies. This would lead to the abolition of certain public bodies with some or all of their functions being merged with other bodies. Where appropriate, the reconstitution of the boards of those public bodies that are to absorb additional functions should be considered to ensure that the mix of skills and expertise of the board members, including the non-executive members, reflect the changes in the organisation's functions.

4.  ACCOUNTABILITY AND GOVERNANCE OF RETAINED PUBLIC BODIES

  4.1  The Committee's inquiry document, Smaller Government: Shrinking the Quango State asks a specific question around improving the accountability and effectiveness of those public bodies that are to be retained. Ensuring that robust governance arrangements are at the heart of those public bodies will be crucial in ensuring they are able to meet strengthened requirements around transparency and accountability and that they are equipped with the systems and have an organisational culture that enables them to respond effectively to a more robust and regular reporting and review regime.

  4.2  To promote accountability and transparency, we would recommend that a unitary board continues to form the basis of the governance model for those public bodies that will continue to exist. This involves the board being comprised of an independent non-executive Chair and at least a balance of executive and non-executive members, or a majority of non-executives.

  4.3  It is likely that the Public Bodies (Reform) Bill will lead to a significant reduction in the number of public bodies and, in turn, the number of public appointments that will need to be made. To safeguard accountability and transparency, it will be important that there continues to be a rigorous, open and fair process for appointing Chairs and non-executives to those public bodies that are retained, with appointment clearly based on merit. We see an important role for the Cabinet Office in ensuring a cost-effective, coordinated and streamlined approach to public appointments across government.

  4.4  Governance has a key role to play in promoting accountability, transparency and value for money in the new public body landscape. The principles for good governance set out in paragraph 2.2 are transferrable across the public sector and would provide a solid foundation upon which governance arrangements for retained public bodies could be built.

5.  CONCLUSION

  5.1  This response has concentrated on highlighting some considerations around the governance and accountability arrangements that will need to be considered as the public body landscape is reformed.

October 2010







5   Storey J. The intended and unintended outcomes of new governance arrangements within the NHS. SDO Research Project. 2010. Back


 
previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2011
Prepared 7 January 2011