Written evidence from the Cabinet Office
1. Did you issue guidance to Departments
on exactly what was meant by the four tests and how they should
apply them? If yes, can you please send the Committee a copy?
The Minister for the Cabinet Office wrote to
all Secretaries of State in June 2010 with an initial view on
how the tests could apply to each department's public bodies.
Following this, Cabinet Office officials worked closely with officials
in other government departments to support ministers to make decisions
about public bodies that were based around the four tests whilst
also recognising the unique circumstances of each department's
public bodies landscape. In some cases the Minister for the Cabinet
Office met the relevant Secretary of State for a bilateral discussion
about how the tests could be applied and, where questions remained,
two wider ministerial meetings were held where ministers could
discuss the application of the tests to those public bodies. No
written guidance was issued.
2. In the Prime Minister's speech of July
2009, his test of political impartially was focused on bodies
that distributed money. In practice its application has been much
wider than this. When, and on what basis, was the decision to
widen the definition of political impartiality taken?
It is true that many of the bodies being retained
on the grounds of requiring impartiality are associated with the
distribution of public money. However, distributing money is only
one criteria in determining whether an organisation should be
impartial, there are organisations like the Charity Commission,
for example, where decisions must be impartial from government.
3. What steps has the Cabinet Office taken
to ensure that the tests were applied consistently? Were departments
required to submit their reasoning to the Cabinet Office?
Whilst it was important to apply the tests as
consistently as possible across each department, it was also important
to recognise any wider considerations that may have a bearing
on the body's future. Cabinet Office officials therefore worked
closely with officials in other government departments to support
ministers to apply the tests to their public bodies in a way that
supported the policy aims of those departments. In some cases
that meant that a decision could not be reached at that time—for
example in the case of Ofwat, where the body is subject to a review.
4. Why has no reason have been given for
the retention several bodies? For example: Competitions Appeals
Tribunal, Equality 2025, Health and Safety Executive, Monitor,
OFWAT, and Royal Mail Holdings Plc.
5. Similarly no reason has been given for
the retention of the body which will be created by the following
mergers: Certification Office and Central Arbitration Committee;
Competition Commission and Office of Fair Trading; Postcomm and
Ofcom; Gambling Commission and National Lottery Commission; UK
Sport and Sport England; Pensions Ombudsman and Pensions Protection
Fund Ombudsman; Serious Organised Crime Agency into the new National
Crime Agency; and Crown Prosecution Service and Revenue and Customs
Prosecutions Office. Could you please explain why this was the
case?
6. Often when a body is being "retained
and reformed" no reason is given for its continued existence.
Examples include: Environment Agency, Equalities and Human Rights
Commission, Financial Reporting Council, Forestry Commission,
Homes and Communities Agency and Natural England. Why is this
the case?
There are instances where the Government believes
that the body passes at least one of the tests, but felt it was
more appropriate for the description in the Written Ministerial
Statement to focus on how the body would develop in the future.
Equality 2025, for example, will take on the functions of other
bodies, including some of the functions of the Disability Employment
Advisory Committee.
Where a merger is proposed, the Government believes
that the resulting bodies will pass at least one of the tests
but, as the Written Ministerial Statement makes clear, the need
to simplify and streamline the system means that merger is the
right and the most efficient course of action.
For bodies being retained and reformed, the
Written Ministerial Statement focuses on the reform that the Government
believes is required to ensure that the remaining body will pass
at least one of the tests.
7. How can the merger of two bodies by justified
on accountability grounds in cases where the new body's relationship
with the sponsoring department does not significantly differ from
that of the old bodies?
Accountability is indeed the main driver for
the reform of public bodies. In many cases mergers will give clear
accountability to one body for a particular activity rather than
it being duplicated across many. The work also gives Government
the opportunity to streamline the operation of public bodies and
create efficiencies where it feels these can be achieved.
8. How will the government avoid the reforms
weakening the visibility of functions current performed by public
bodies, as they compete for attention within a wide range of departmental
concerns and priorities?
(a) this not make it more difficult for stakeholder
group to hold policy makers to account in these areas?
The Government considers that bringing some
functions closer to ministers, for example by moving them into
departments or creating an executive agency, will increase ministerial
accountability for these functions. It will mean that stakeholders
are better able to engage with ministers on these issues rather
than negotiating via a third party. Other bodies will be moved
closer to the communities that they serve: the functions of the
Thurrock Development Corporation, for example, will be devolved
to local government, meaning that local people can better understand
and be closer to decisions that affect their everyday lives.
9. How will the government ensure that triennial
reviews consider ways in which government sponsorship arrangements/the
way it managed public bodies are inhibiting their effectiveness?
Can you please update the Committee on the milestone relating
to public bodies included in the Cabinet Office Business Plan?
Specifically:
(a) How can the department have "completed"
supporting departments in developing robust implementation plans
(1.16.ii) when some bodies are still under review?
(i) What form has this support taken?
(b) Who was consulted when you conducted
the review of terms and conditions of employees of public bodies
which are to be reviewed (1.16.iii)? The Union said they had not
heard of the review.
Cabinet Office will be issuing guidance to departments
on the new triennial review process in the new year. This will
include a "checklist" to help departments strike the
right balance between departmental control and oversight and operational
freedoms and flexibilities for public bodies. Separately, Cabinet
Office will be revising its general guide for departments on public
bodies which will include guidance, and examples of good practice,
on sponsorship.
Departments are now working through the implementation
of their proposals. Whilst some proposals are still under development—for
example in terms of specific decisions about where functions will
transfer—it is important that departments think early about
how to approach implementation and the potential impact on the
organisation's staff.
As the Minister for the Cabinet Office set out
on 3 November, departments are absolutely the best placed to lead
this work. They have the greatest understanding of how to improve
the accountability and efficiency of their public bodies landscape,
and are taking forward reforms in the context of their broader
business plans for the spending review period. Whilst the pace
of change will vary, therefore, departments have been working
with their public bodies and stakeholders to come up with sensible
plans about how to deliver the reform programme.
Where it is considered it would add value, the
Cabinet Office has been supporting departments to think about
implementation, through our Public Bodies Working Group and Steering
Board. Whilst implementation planning is proportionate to the
scale of reform, the Cabinet Office has generally expected consideration
of how to ensure robust governance arrangements are in place,
timescales and milestones, risks to delivery, how to track benefits
and how—as the proposals become more firm—ensuring
that the costs of change are minimised and the savings maximised,
in the context of departmental business plans and spending review
settlements.
The Cabinet Office will continue to support
this process by running thematic workshops for departments and
pulling together existing guidance on implementation issues.
As the reform process develops it is important
for Government to fully understand the appointments landscape
in public bodies. The Public Bodies Reform Team has therefore
been working with departments to collect information on the terms
and conditions of public bodies' board members. Similarly, departments
have been working to ensure that the information they hold on
the staff in affected bodies is comprehensive.
This information is of course sensitive, and
will be used carefully by departments to make decisions about
whether and how the workforce in each body needs to change. Plans
for changes to individual organisations will be taken forward,
in line with existing practice, in discussion with staff and trade
unions.
10. The House of Lords Constitution
Committee has recommended that Orders made using the Public Bodies
Reform Bill [Lords] should be subject to the super-affirmative
procedure. What it the Government's position regarding this suggestion?
The Government values the expertise of the House
of Lords Constitution Committee and this Bill will benefit significantly
from their contributions throughout its passage through Parliament.
In his closing speech to the House of Lords, Lord Taylor was clear
that the Government would work proactively and constructively
with Peers to ensure the Bill delivers on the Coalition commitment
to reform public bodies while also meeting the expectations of
Parliamentarians that it contains adequate safeguards, sufficient
consultation requirements and is subject to appropriate Parliamentary
scrutiny. This is why the Government has tabled a number of amendments
that build in these additional reassurances to Parliament, while
striking the balance that members of the public expect, that the
public bodies landscape is quickly and fundamentally reformed.
Specifically regarding the Committee's proposal
that orders should be subject to the super-affirmative procedure,
the Government has tabled amendments that substantively increase
Parliament's opportunity to provide scrutiny and also reflect
the varying definitions of the super-affirmative procedure. The
Constitution Committee's report proposed that the Government replicate
the procedure as set out in the Legislative and Regulatory Reform
Act 2006. However, the Government believes the scope of that Act
is wider and more significant than the Public Bodies Bill and
so has sought to establish a form of enhanced affirmative procedure
that balances the need for Parliament to scrutinise orders with
the need for ministers to deliver part of the Coalition's Programme
for Government in a timely fashion in line with public expectation.
This new procedure allows for Parliament to
determine whether an enhanced affirmative procedure is necessary.
This procedure then builds in a longer period that allows for
select committees to make recommendations, for the Minister to
reflect on representations from Parliamentarians and for an affirmative
vote in each house. The conventions regarding voting on statutory
instruments are a matter for Parliament to consider.
11. Why does the Government think it is appropriate
to have bodies which it believe need to independent of Government
(Channel 4, British Library, Committee on Climate Change, Gangmaster
Licensing Authority, School Teachers Review Body...) listed in
Schedule 7 of the Act? Does the Act not give the Government much
more power than it needs to carry out the reforms it has identified
in this review?
Schedule 7 lists all statutory bodies that were
subject to the review and bodies that are still subject ongoing
review processes, with the exception of a small number of bodies
that are already planned to be subject to other legislation (for
example the Health Bill). The purpose of Schedule 7 is to clearly
define those bodies to whom the powers in the Bill could apply
following the conclusion of further review processes. One of the
reasons for the Coalition Government's recent review process and
plans to establish a triennial review process is to ensure the
Government has a clear mechanism to re-evaluate the public bodies
landscape and a legislative framework for making changes to statutory
bodies. For example, where the conclusions of a future review
propose that a statutory body should be retained but subject to
reforms that will improve its efficiency and accountability there
would not be a legislative vehicle without the Public Bodies Bill.
The Committee can be reassured by the recent amendments tabled
by the Government that where a function requires an organisation
to remain independent, the powers in the Bill could not be used
to affect that function. Similarly, the more stringent Parliamentary
procedure set out in the amendments provides for additional scrutiny
and an enhanced check on Ministerial power. It is certainly not
the case that the Government can reform or even abolish public
bodies on a whim, but it is important that additional changes
to be made in the interest of efficient, effective Government
could be implemented.
12. Why are only some bodies that were reviewed
listed in the Act? How were decisions made?
A number of bodies that were subject to the
review do not require legislation in order to make reforms. Other
bodies, such as a number of health bodies, are already planned
to be subject to other legislation.
November 2010
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