Special Report: Scrutiny of Public Bodies Orders
Introduction
1. The Public Bodies Act 2011 gives Ministers
the power by order to abolish, merge or modify a number of public
bodies and offices originally established in primary legislation.
The use of this power by Ministers is subject to a new scrutiny
procedure - the "enhanced affirmative" procedure - which
was inserted by amendment during scrutiny of the Bill in the House
of Lords.
2. The House has agreed that the Merits of Statutory
Instruments Committee should undertake the scrutiny work when
these draft orders are laid[1].
This gives us an important new role building on our existing work
scrutinising statutory instruments laid before the House.
3. In this Report, we set out the key provisions
of the Public Bodies Act 2011, the statutory scrutiny process,
and how we intend to approach this new scrutiny role. This Special
Report is made for the information of the House.
Key provisions in the Public Bodies Act 2011
4. The Public Bodies Act 2011 (the 2011 Act)
confers order-making powers on Ministers and Welsh Ministers in
relation to the reform of a range of public bodies and offices
listed in the Act. This Report is concerned only with the scrutiny
of orders made under sections 1 to 5 of the Act which are subject
to the new scrutiny arrangements. The Act contains a sunset provision
putting a 5 year limit on the use of these order-making powers.
5. The powers in sections 1 to 5 allow a Minister
of the Crown to do certain things in relation to public bodies
and offices:
- Abolition: under section
1 the Minister can by order abolish any body or office listed
in Schedule 1 to the Act;
- Merger: under section
2 the Minister can by order merge any group of bodies or offices
listed in Schedule 2;
- Modifying constitutional arrangements:
under section 3 the Minister can by order modify the constitutional
arrangements of any body or office listed in Schedule 3;
- Modifying funding arrangements:
under section 4 the Minister can by order modify the funding arrangements
of any body or office listed in Schedule 4;
- Modifying or transferring functions:
under section 5 the Minister can by order modify the functions
of a body or office, or transfer its functions to an eligible
person, listed in Schedule 5.
CONDITIONS AND TESTS IN THE ACT
6. These powers are subject to other provisions
of the 2011 Act. Section 7 states that in certain cases functions
must continue to be exercised independently of Ministers after
modification or transfer[2].
It also stipulates that provision made by the order must be proportionate.
Under section 8 a Minister may make an order only if he considers
that the order "serves the purpose of improving the exercise
of public functions, having regard to—
(a) efficiency,
(b) effectiveness,
(c) economy, and
(d) securing appropriate accountability to Ministers";
and only if he considers that the order:
(i) will improve the exercise of public functions;
and
(ii) does not remove any necessary protection or
prevent any person from continuing to exercise any right or freedom
which that person might reasonably expect to continue to exercise.
7. Section 9 deals with devolved matters and
the requirement for consent from the Scottish Parliament, the
Northern Ireland Assembly and the National Assembly for Wales,
as appropriate. Section 10 places consultation requirements on
the Minister before making an Order.
Parliamentary scrutiny arrangements
AN OVERVIEW
8. Section 11 sets out the new Parliamentary
scrutiny arrangements: this section was inserted by amendment
during Committee stage in the Lords and followed considerable
criticism of the Bill as introduced, including from the Delegated
Powers and Regulatory Reform Committee[3]
and the Select Committee on the Constitution[4].
In short, the arrangements allow for an enhanced scrutiny procedure
to apply if triggered by the Committee charged with reporting
on public bodies orders (the Merits Committee) or by the House
itself. This report sets out how the Merits Committee will approach
its new role in considering public bodies orders and recommending
which orders should be subject to the enhanced procedure.
9. Under the Act, each public bodies order is
laid before the House in draft. The draft order must be accompanied
by an accompanying Explanatory Document (ED), and cannot be laid
unless a minimum period of 12 weeks has elapsed since the day
on which the consultation period on the order began[5].
Once laid, the order initially proceeds as a draft affirmative
instrument which simply requires it to lay before the House for
40 days before the Government can propose a motion to approve
it. But during the first 30 days, the House can decide that the
enhanced affirmative procedure should apply[6].
This decision can be triggered in one of two ways: by a recommendation
of the Merits Committee or by resolution of the House.
10. Under the 2011 Act, there are two key enhancements
to the scrutiny arrangements. First, the time given to the House
to complete its scrutiny is extended from 40 days to 60 days.
Second, during that extended 60 day period the Merits Committee
can make recommendations, or the House can make resolutions, on
the draft order; and the Minister has a statutory duty to have
regard to these recommendations.
11. The scrutiny arrangements apply across both
Houses, and have the effect that if one House triggers the enhanced
affirmative procedure, that decision then applies across both
Houses. So, for example, if the Merits Committee decides to trigger
the enhanced affirmative procedure, that applies also in the Commons
regardless of any decision there, and vice versa. The statutory
requirement for the Minister to have regard to any recommendations
or resolutions applies equally to recommendations or resolutions
made by the Commons.
12. Once the enhanced scrutiny 60 day period
is completed the Minister has a choice. He can either submit
the order in its original form for approval by a resolution of
each House of Parliament. Or if the Minister wishes to make material
changes, he can lay a revised draft order before both Houses with
an accompanying statement summarising the changes proposed. In
either event, he is under a statutory duty "to have regard
to" any recommendations or resolutions made in either House.
A revised draft order will be subject to approval by resolution
by both Houses but no further scrutiny period applies before a
motion to approve the revised draft order can be put before the
House. However, the House has agreed that the Merits Committee
will have the opportunity to scrutinise any material changes made
in the revised draft order[7].
Merits Committee approach to scrutiny
13. We welcome the additional role the House
has given us to scrutinise these public bodies orders. The Merits
Committee has well-established systems for the scrutiny of statutory
instruments and we shall use the experience and expertise developed
over 8 years in carrying out scrutiny of these orders. To meet
the new statutory procedures set out in the 2011 Act we shall
differ in certain respects from our routine approach to the scrutiny
of instruments and we have drawn on the experience of the Delegated
Powers and Regulatory Reform Committee's scrutiny of Legislative
Reform Orders (LROs) which share some characteristics of public
bodies orders, in particular the requirement to satisfy certain
tests set out in the Act (set out in paragraph 6).
WHAT WE WILL CONSIDER
14. We intend to report to the House on each
public bodies order, whether or not we recommend triggering the
enhanced scrutiny procedure. For each order, we shall report
on the statutory tests for the draft order set out in section
8 of the 2011 Act. We will also report on whether the statutory
consultation requirements in sections 10 and 11(3) have been met.
And we shall consider a number of other factors including:
- the effectiveness of the consultation;
- the nature and outcome of debates during the
passage of the Bill; and how the instrument takes account of any
Ministerial commitments made during debate;
- Member, public or media interest in the draft
order; and
- the broad content of any submissions received
at the initial stage.
We shall then recommend whether or not to trigger
the enhanced procedure.
WHY TRIGGER THE ENHANCED PROCEDURE?
15. While it is not possible in advance to set
out the precise circumstances under which we shall recommend the
enhanced scrutiny procedure, the following factors will be influential:
- if consideration of those factors outlined in
paragraph 15 above results in the Committee wishing to make recommendations
about all or part of the instrument, we shall need to trigger
the enhanced procedure so that the statutory requirement in the
2011 Act for the Minister to "have regard to" recommendations
has effect,
- If the Committee wants to seek further information
or to take evidence, either written or oral (or both) including
from the Minister proposing the draft order, we may need to trigger
the enhanced procedure to allow sufficient time for this whether
or not we subsequently make recommendations about the instrument.
TIMING
16. In line with our approach to consideration
of all other statutory instruments, we shall aim to consider each
draft order within 15 days of it being laid before Parliament;
and to produce an initial report to the House shortly thereafter.
There may be occasions where we wish to consider a draft order
further before our initial report - for example, to seek further
information from the relevant Government department - in which
case we may hold it over for an additional week. In any event,
we shall make our initial report to the House on a draft order
as early as possible within the 30 day initial scrutiny period
leaving time for the House (if necessary) to consider any resolution
tabled before the initial 30 day scrutiny period expires.
FURTHER REPORT
17. Having recommended the enhanced procedure
and considered the matters set out in paragraph 15 together with
any evidence received, we would envisage making a second report
to the House within the 60 day period. This second report is also
the Committee's opportunity to take account of further information
and evidence from the relevant Department and to make recommendations
on the draft order. This is a significant role for the Committee,
not least because it allows the Committee to recommend that amendments
be made to a draft order. We hope out reports will inform the
eventual debate on the order in the House.
OTHER ASPECTS OF THE SCRUTINY PROCESS
18. While the key scrutiny role in the House
of Lords has been given to the Merits Committee, it may be helpful
to set out the full picture of the other parts of the scrutiny
process. The Joint Committee on Statutory Instruments (JCSI)
will undertake scrutiny of draft public bodies orders (and any
revised draft orders) as part of its normal process of considering
whether the legal drafting of instruments is correct. Where available
and relevant, we shall take reports of the JCSI into consideration
when considering draft orders.
19. The Act also gives the House as a whole a
role in the scrutiny process which mirrors the Committee's role:
the House as a whole can trigger the enhanced scrutiny procedure
by passing a resolution; and the House as a whole can pass resolutions
on a particular order which the Minister must take into account
under the enhanced procedure. We would expect to make either
our initial report or any second report as early as possible within
the 30 day or 60 day scrutiny period respectively to allow any
Member of the House either to come to a different view and override
a Merits Committee recommendation on the appropriate procedure,
or to allow the House to make additional resolutions on the draft
order.
20. Finally, the arrangements apply across both
Houses and the Commons will carry out a similar scrutiny role.
In the Commons, the scrutiny role for each draft public bodies
order will be given either to the relevant departmental select
committees or to the Public Administration Select Committee[8],
with whom we expect to collaborate.
What happens once the scrutiny period has expired
21. Once the 40 day or 60 day scrutiny period
has expired, the Minister can proceed with the draft order as
originally laid and seek the approval of both Houses. At this
stage the Minister would be expected, where necessary, to explain
how regard has been had to any representations, resolutions of
either House or recommendations of the committee charged with
reporting on the draft order. That explanation would either be
given at the despatch box during the debate on the draft order,
or by means of a Written Ministerial Statement laid prior to the
debate. Alternatively, after the end of the 60 day period, the
Minister can lay a revised draft order along with an accompanying
statement summarising the changes proposed, which would be subject
to scrutiny by the Merits Committee and JCSI before being put
to the House for approval.
Keeping track of progress and taking part
22. When a public bodies order is laid before
Parliament, its progress will be listed in the House of Lords
Business document. Information on the progress of scrutiny of
each order will also be available on the Merits Committee website
at www.parliament.uk/merits. The draft orders and explanatory
documents are published by the Government and can be found at
www.legislation.gov.uk.
23. We welcome views and comments on draft public
bodies orders under consideration. Any views or comments received
will be taken into account as part of our scrutiny exercise and
may be published. Our website gives details of how to send us
your views or you can contact the Committee secretariat by email
at merits@parliament.uk.
1 HL Deb 8 November 2011 col 127 Back
2
These cases are: (a) where the function is judicial, (b) where
the function's exercise involves enforcement activities in relation
to obligations imposed by the Minister and (c) where the function's
exercise otherwise constitutes the exercise of oversight or scrutiny
of the actions of a Minister Back
3
Delegated Powers and Regulatory Reform Committee, 2010-12, 5th
Report (HL Paper 57), 6th Report (HL Paper 62) and 11th Report
(HL Paper 108) Back
4
Constitution Committee 2010-12, 6th Report (HL Paper 51) Back
5
Section 11 (2) sets out the information that the ED must contain.
For the purposes of the Act it is immaterial whether the consultation
was carried out before or after the commencement of the consultation
provisions (section 10(3)). Back
6
For the purposes of calculating 30 day, 40 day and 60 day periods
under the Act, no account is taken of any time when Parliament
is dissolved or prorogued or when either House is adjourned for
more than 4 days Back
7
Procedure Committee 2010-12, 7th Report (HL Paper 206) paragraph
19 Back
8
House of Commons Votes and Proceedings: 19 January 2012 Back
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