House of Commons - Who's accountable? Relationships between Government and arm's-length bodies

Who's accountable? Relationships between Government and arm's-length bodies - Public Administration Committee Contents

3 The Government's public bodies reforms to date

15. The intended outcome of the Government's ongoing reforms is to make arm's-length bodies "leaner, more efficient and more accountable".[37] Additional aims cited in the Government's public bodies reform strategy include effectiveness, clear purpose, and making a contribution to economic growth.[38] The Minister for the Cabinet Office, Francis Maude MP, reiterated in March 2014 that the main aim of the reforms was accountability:

The National Audit Office found that annual administrative spending reductions achieved by public bodies were an estimated £723 million in 2012-13 compared with 2010-11.[40]

16. Professor Skelcher told us that, through its reforms, the Government has shown that its approach to the governance and accountability of public bodies is more serious than in the past, but Tom Gash of the Institute for Government argued that the basic nature of the relationship between departments and arm's-length bodies has not changed.[41] As the National Audit Office found in February 2013, the Government has not collected quantifiable evidence on the wider value of the reforms for public services, citizen trust and participation.[42]

17. By 31 December 2013 there were 283 fewer public bodies due to abolition or merger through the Government's Public Bodies Reform Programme.[43] To date, the reduction is the result of one-by-one decisions, whereas our evidence suggests that a more strategic approach is required.[44] Rob Whiteman, former Chief Executive of the UK Border Agency, said "structural pingpong does not necessarily sort out the longterm issues".[45] The Government argues that fewer bodies means greater accountability. For example, the Child Maintenance and Enforcement Commission is now closer to Ministers as part of the Department for Work and Pensions.

18. The National Audit Office argued that bringing a function into a department removes the direct oversight provided by a board and audit committee.[46] John Redwood MP told us that, as a Minister, "I could brief myself very easily for a quango meeting, because I would just ask to see last year's annual report".[47] The Chief Executive of NHS England, Simon Stevens, agreed that "conducting our affairs in public at arm's length from a Civil Service government department permits greater transparency."[48] The National Audit Office reported in February 2014 that:

Academic research has also highlighted the reduced accountability to the public of new Cabinet Office controls. Dr Tonkiss' research with Chairs of public bodies found that gaining approval for spending from the Cabinet Office has added a hidden bureaucratic layer to the accountability arrangements of public bodies.[50] In 2011, this Committee concluded that stakeholders and civil society play an important role providing challenge and criticism to public bodies and that it is easiest for them to do this when they have a clearly identified body to engage with, not a homogenous central department.[51]

19. The public bodies reforms have not been coordinated with the Civil Service Reform Plan and the health reforms, recent research concludes.[52] The Civil Service Reform Plan progress updates do not mention public bodies.[53] There has not been a coherent approach to the reform of the vast mass of bodies which sit beneath central government departments, according to research by our witnesses Professor Skelcher, Dr Tonkiss and others.[54] Triennial reviews are part of the reforms. These periodic reviews gather evidence on non-departmental public bodies (NDPBs) and make recommendations. The Cabinet Office told us that a triennial review: "rigorously challenges whether functions continue to be needed and also considers alternative models for delivery."[55]

20. Triennial reviews are perceived as positive, research has found.[56] Nevertheless, the reforms are incomplete. Notably, non-ministerial departments have been excluded from triennial reviews. Tom Gash of the Institute of Government described this exclusion as "an error" due to "the fact that there is no rhyme or reason as to why a body is a non-ministerial department versus an NDPB."[57] Executive agencies are also excluded, on the grounds that they are already accountable, as we heard from Francis Maude MP in 2010.[58] In fact, as the National Audit Office concluded in February 2014:

21. The Cabinet Office has published guidance on how to carry out triennial reviews.[60] In practice reviews vary, in terms of the appointment of independent review board members, the process for signing off reports, the role of the Cabinet Office, and how to balance the evidence produced by a review with political considerations, as in the case of Natural England and the Environment Agency.[61]

22. The aims of triennial reviews have expanded over time. They now include aims around efficiency, transparency, and whether and how the body contributes to economic growth.[62] The Institute for Government argues that some of this should be business-as-usual in the department-public body relationship.[63]

23. Significant reforms of public bodies have been implemented, but have not been coordinated with Civil Service reforms and health reforms. We are unconvinced that the reforms have in fact increased accountability. Accountability does not depend on organisational form. In some cases, increased direct accountability to Ministers has come at the cost of reduced transparency and accountability to Parliament and to the public. The Government's approach so far has been limited, based on a transactional notion of accountability, without enough emphasis on the human factors that contribute to the effectiveness of arm's-length bodies.

24. The Government's triennial reviews are welcome but limited to the bodies and topics they cover. Triennial reviews should not become 'Christmas trees' on which more and more additional aims are hung, intended to right all wrongs.

25. Triennial reviews should also apply to executive agencies, non-ministerial departments, public corporations, and NHS bodies. The Cabinet Office should produce central guidance and support on the principles that underpin triennial reviews and the aims of the process. Rather than being viewed as a threat by public bodies, triennial reviews should be focussed on the quality of the relationship between a public body and its sponsoring department, which is the more significant factor determining accountability.

37 Q467 [Nick Hurd MP] Back

38 Cabinet Office, Public Bodies Reform Strategy Document, July 2014 Back

39 HC Deb, 12 March 2014, col 301 Back

40 National Audit Office, Progress on public bodies reform, HC (2013-2014) 1048 Back

41 Q26, Q1 Back

42 National Audit Office, Progress on public bodies reform, HC (2013-2014) 1048 Back

43 As above Back

44 Q66 [Professor Skelcher] Back

45 Q171 Back

46 National Audit Office, Progress on public bodies reform, HC (2013-2014) 1048 Back

47 Q199 Back

48 Q238 Back