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
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