Departments are "missing opportunities" to tap into the skills and expertise of staff working in the arm's-length bodies they oversee, according to a new report by the National Audit Office.
Arm's length bodies (ALBs) include executive agencies, Non-Departmental Public Bodies (NDPBs) and government-owned companies, carrying out specialist work for departments, often while operating at a remove from direct political control. High-profile ALBs include the Environment Agency and the Gambling Commission.
According to the latest figures, there are more than 450 ALBs currently in existence, responsible for spending more than £200bn of public money.
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However, the latest report from the public spending watchdog says that the arm's-length body landscape "remains confused and incoherent", with the NAO pointing out there is still no single list of all ALBs, nor an agreed definition of the different types.
Its report, based on interviews with officials and non-executive directors from four departments and their ALBs - Business, Innovation and Skills; Environment Food and Rural Affairs; Culture, Media and Sport; and the Ministry of Justice - finds that it is "not always clear" where accountability lies in each ALB, nor what their specific responsibilities are.
Meanwhile, staff working for ALBs told the spending watchdog that their host departments were often failing to make the most of their hands-on expertise when making policy decisions.
"Departments are missing opportunities to exploit the skills and expertise that exist within ALBs," the NAO said.
It added: "ALBs are often at the front line of delivering policy and therefore have deep expertise and understanding that could be exploited in both designing and implementing policy.
"Despite this, ALBs felt they were not sufficiently involved in policy discussions, though there were some exceptions. The considerable skills and experience of non-executive directors within ALBs are also not routinely exploited across ALBs and departments."
"ALBs are often at the front line of delivering policy and therefore have deep expertise and understanding that could be exploited in both designing and implementing policy" – National Audit Office
Only 64% of the ALB staff surveyed by the watchdog said that their department had sought feedback from them on how they could help the wider department.
And the NAO found that while secondments of employees between ALBs and their departments could help build "mutual understanding" between agencies and their hosts, such mechanisms were "only used sporadically".
A quarter of the ALBs surveyed by the NAO said they were only partly clear which of their departments' objectives related to their own work, with the disconnect most apparent in the MoJ "where 42% were partially or not clear" of how their agency fitted in to wider government plans.
While all of Defra's ALBs said they had been aided in understanding the department's strategic objectives in the last 18 months, the same was true for only 53% of the bodies covered by the MoJ.
The NAO urges the Cabinet Office – which recently published new guidance attempting to provide more clarity on the classification of ALBs – to do more to help departments share examples of good work carried out by their agencies.
"There is a real appetite to learn and adapt approaches to oversight," the NAO said. "The Cabinet Office needs to work collectively with departments to build on this momentum.
"It should take the lead in drawing together existing work, and identifying the most effective approaches and under what circumstances they can best be applied, to ensure oversight improves value for money