Political and Constitutional Reform CommitteeWritten evidence submitted by Dr Bill Moyes, Institute for Government

Responses to the Supplementary Questions Posed by the Committee

1. Professor Tony Travers told us that “blurred accountability suits both central and local government”. Do you agree?
If so, would codification help to clarify where accountability lies? —

It may well suit local and national politicians for responsibility, and therefore accountability, to be ill-defined and therefore unclear, at least in facing a short term crisis. In these circumstances, the users of services, the general public, the news media and Parliament will all find it difficult to know whom to call to account in cases of failure of services. It’s then possible for different parties to escape transparency, blame each other and themselves to escape censure.

However, blurred accountability is seldom in the public interest, nor is it in the longer term interest of politicians committed to the decentralisation of power.

The absence of clear accountability affects the public interest in particular in cases of failure. In circumstances where the users of services have no (or no realistic) alternative provider of that service, there needs to be effective oversight and the possibility of effective intervention to remedy (or prevent) serious failure—financial or quality. To be effective, such oversight and intervention require clarity about responsibility and accountability. This can rest with senior managers, local or national politicians or regulators. Different mechanisms are appropriate for different services.

Where accountability is unambiguously allocated and its scope clearly-defined, and where this is understood and accepted by the key stakeholders of a public service—users, the public, the media, Parliament and local politicians—the person who is accountable is likely to:

(1)Define what constitutes unacceptable performance—financial or quality.

(2)Monitor actual performance against these criteria.

(3)Be prepared to intervene to remedy persistent and unacceptable failures.

(4)Ensure intervention is effective.

The absence of unambiguous accountability increases the risk of political accountability for the performance of a public service returning, by default, to the top of the political tree. For some services, this may mean central government Ministers being held accountable for decisions beyond their control, and a consequent undermining of decentralising intent.

Codification would have real value if it secured a sufficiently precise allocation of accountability, and a sufficiently clear definition of the scope of accountability, to produce the outcomes described above. Codification therefore has to be detailed and its terms have to be appropriate to each service. In particular, codification needs to include explicit consideration of the circumstances in which central government retains the right to step in and direct local provision. If codification is couched in general or ambiguous terms, it will not help the citizen to be clear about how and when to hold which politicians and senior public officials to account. If it does not do this, is it of much real value?

2. If there were to be greater clarity about the responsibilities of local government, how would you limit the extent of Ministerial accountability in these areas?

Accountability has to be unambiguous, and it has to be accompanied by the ability to intervene in order to remedy deficiencies.

Ministers must always be accountable for the statutory frameworks they create through legislation. If the statutory architecture for a particular service is clearly deficient, it is the responsibility of Ministers to propose legislation to remedy that. They are therefore accountable for their decisions on how and when to put remedies in place. That accountability cannot rest elsewhere.

Where local government is responsible for delivering a specific service, they must be wholly accountable for their actions or inactions. National and local government cannot sensibly be accountable simultaneously for the same thing. Nor should Ministers be called to account for actions determined and taken wholly at local level where alternative democratic mechanisms apply.

National government allocates the proceeds of national taxation and is therefore accountable for those allocation decisions. Local authorities are accountable for their spending decisions and for the service performance they secure.

This delineation of accountabilities could be defined in legislation, to put the matter beyond doubt. Where Ministers seek to retain a degree of accountability for the operational performance of services, this will lead to requirements on the local level to provide information to the national level, and ultimately to Ministerial intervention. Local government is then at risk of operating effectively as an agent of government.

There may well be circumstances—child protection is an example where this argument has been made in the past—where it is appropriate for Ministers to have statutory powers to step in where the performance of local government is proving unacceptable. These powers need to be clearly specified in law, as do the circumstances in which they should be used. And when they are used, accountability passes from the local to the national level. Ministers would be accountable for the decision to use their powers to step in and for the action subsequently taken.

3. In what circumstances, if any, should a Minister be able to intervene in local services to protect the citizen?

In cases where persistent underperformance causes, or threatens, serious harm to individuals or groups of service users, and no other agency (eg a regulator) has the necessary power to intervene to remedy or prevent the failure.

4. How should a local authority be called to account for serious mismanagement, if central intervention is to be avoided? Are periodic local elections enough?
Are mechanisms needed at a local level to resolve complaints about the — organisation and management of local services?
Do decentralised services require decentralised forms of democratic scrutiny? —

Periodic local elections cannot, on their own, produce effective accountability for service failure. They are more effective in cases of persistent under-performance.

Accountability needs to happen as near as possible in time to the identification of the service failure, and ideally the process of accountability should be part of the remediation of the failure. A calling to account also needs to involve intervention to create the conditions for the failure to be remedied. This might involve any or all of:

(1)replacing senior service managers or councillors or non-executive directors of the service concerned;

(2)developing of an effective plan of action to remedy the failing service, with regular monitoring of progress against plan;

(3)appointing of expert advisers; and

(4)transferring responsibility for the service to a different organisation or entity.

Parliament may have a role to play in calling a failing organisation to account, through the appropriate select committee.

The more decentralised a service is the more useful are decentralised forms of scrutiny. Remote scrutiny can be bureaucratic, slow and poorly-informed. But decentralised scrutiny need not always be by local government. Other local mechanisms, such as the governors of foundation trusts, may be created with the powers to intervene in defined circumstances. An independent regulator (eg OFSTED) may be the most appropriate mechanism for some services.

A local complaints mechanism, perhaps building on the Ombudsman service, will help to ensure that serious complaints do not end up being referred by constituency MPs to Ministers for want of an alternative. Where complaints are serious, or arise frequently, it is very hard for Ministers to avoid becoming involved. Yet, doing so undermines local accountability.

6. [To Bill Moyes] Are there parallels from your experience of the relationship between central government and the NHS for the central-local government relationship and the prospects for successful devolution of power?

Yes, there are lessons to learn from the experience of foundation trusts.

In summary they are:

(1)build a political consensus;

(2)make clear in legislation what Ministers are accountable for, what they are not accountable for and which other bodies (eg commissioners, regulators) are accountable and for what;

(3)build local capability to organise and manage services and to call service providers to account; don’t assume it will simply emerge;

(4)work out in advance how a really major crisis (like Mid-Staffordshire Hospital) will be managed; and

(5)re-think how and when Parliament should call service providers to account, where Ministers are not accountable.

Minsters wanted to specify what the NHS should deliver for the public—in the early 2000s the priority was faster access to services—but not to be involved in determining how services should be organised and delivered. Ministers wanted to be accountable for the outcome but not for the operational management of services. So, they created foundation trusts as autonomous organisations. Ministers removed from the legislation their existing powers of direction over NHS Trusts and most of their other powers. Foundation trusts are accountable to:

(1)Parliament (the CEO is an accounting officer); each foundation trust lays its annual report before Parliament.

(2)An independent regulator (Monitor) and an inspector of service quality (the Care Quality Commission), which licenses operators to sell their services to the NHS.

(3)Their governors (elected by the membership, and with powers to appoint or remove the non-executive directors of the hospital, receive the auditor’s report etc).

(4)The commissioners of their services for delivering the requirements of their contract.

But foundation trusts are not accountable to Ministers.

What was not put in place, in my view, was the political consensus to underpin this statutory framework. Nor did Ministers make clear that their accountability to Parliament would be for the commissioning of health services, not for their provision. As a consequence many MPs were not prepared to accept that foundation trusts were not accountable to the Secretary of State, and continued to behave as if they were. The regulators and inspectors were not seen by many backbenchers as the right body to refer serious complaints, despite having draconian powers of intervention. Successive Secretaries of State were increasingly prepared to intervene, despite the clear terms of the statutory framework. As a result the intended redefinition of accountability was not achieved in practice.

The Health Select Committee did not attempt to call to account the regulator or foundation trust boards. I believe that in future select committees need to give greater priority to calling to account intermediary bodies such as service regulators.

Governors were not given the training they require to call to account the boards of foundation trusts. As a result local accountability was very patchy and often ineffective.

Many financial and service crises were managed by the foundation trust regulator (Monitor), but Ministers and MPs were not clear about how to handle a major service crisis (Mid-Staffordshire) when it happened. The legal framework had got ahead of public understanding and expectations, which remained that Ministers were accountable.

Despite these failings, the service performance of foundation trusts has been very strong—generally better than non-foundation trusts. Removing Ministers from operation control has produce better and more responsive services.

7 January 2011

Prepared 28th January 2013