Public services think tank Reform has called on ministers to get a grip on the UK’s hundreds-strong landscape of public bodies, questioning their ability to help government deliver on its priorities.
Reform said that while the creation of more public bodies was “increasingly” seen as the solution to policy challenges deemed too difficult for Whitehall to address, the result was “a complex, and largely opaque, landscape” of organisations.
The think tank said varying governance structures, legal status and degrees of autonomy left departments “unclear” about the powers they have over their public bodies. It found departments’ main channels for holding arm’s-length bodies and other agencies to account were often “under-powered, under-resourced, or simply ineffective”.
Reform said many public bodies now employ large public affairs, communications and external engagement teams to lobby government, when they should be focused on delivering the remits they have been given by ministers. It cited the Pensions Regulator and the British Business Bank as examples.
The think tank said one part of the state employing teams of staff to petition government for a favourable funding settlement and specific policy asks appeared to be “a questionable use of taxpayers’ money”.
Reform said it had identified 100 public bodies that could be reconstituted as specialist units, closed, merged into existing organisations, or re-established on different terms under proposals for stricter tests to justify the creation of public bodies.
It is recommending a two-stage test that asks whether the function performed by a public body needs to be delivered with political impartiality and whether the function needs to be delivered independently of ministers.
Reform said the Crown Commercial Service, the Government Property Agency, Sport England, the Driver and Vehicle Licensing Agency, National Highways and NHS England would be among the bodies failing to meet such a test.
The Quangocracy report says public bodies now account for around 60% of day-to-day government spending, providing some of the most important and high risk services. It says public bodies that are nominally accountable to departments spend more than £350bn a year and have more than 390,000 staff.
Report authors Patrick King and Alice Semark said that Freedom of Information Act requests submitted to departments suggested that only around 250 officials based in departments were undertaking “sponsorship” roles monitoring public bodies.
They said officials interviewed for the report had highlighted a lack of capability and skills in sponsor teams. They quoted one saying: “It’s a complete mess. It’s not resourced, there’s no technical expertise. The government should be pretty ashamed of itself.”
King and Semark said that creating a new quango was often seen as the “solution" to a seemingly stuck issue or as a political signal of importance. However, they pointed to recent failings at the Care Quality Commission – which was dubbed “unfit for purpose” after a review last summer, and HS2 Ltd’s oversight of procurement for the massively over-budget high-speed rail project.
The report said public-spending watchdog the National Audit Office had identified consistent failures in the project management of HS2 that were “directly downstream” of failures in the organisational structure and governance of HS2 Ltd – a company wholly owned by the Department for Transport.
“Increasingly, the creation of more public bodies is seen as the answer to policy challenges that are deemed too difficult to address in Whitehall," King and Semark said. “This is not supported by the evidence, which finds that the creation of public bodies can reduce the government’s ability to deliver its priorities, and can create inefficiencies and a democratic deficit in the accountability of government to parliament.
“In practice, the creation of new public bodies often stems from a political desire to ‘do something’ in a crisis, rather than any analysis of whether it is the best approach. If a part of the system is broken, government should fix it, not establish a new entity outside of it.”
Earlier this week, deputy prime minister Angela Rayner agreed to set up a new construction regulator as part of the government’s response to the final report of the Grenfell Tower Inquiry into 2017’s tower-block fire, which claimed 72 lives.
King and Semark concluded: “Departments should be empowered with the capabilities they need to effectively performance-manage public bodies, and also undertake specialist delivery work without resorting to the creation of new ones. And there should be a reorganisation and reclassification of the public body landscape, based on the functions that only they can perform – bringing greater consistency and transparency.”
In addition to proposing stricter tests for the creation of public bodies, Reform is calling for more transparency and consistency about the degree of independence agencies, ALBs and other organisations have from ministers.
It says the Cabinet Office should undertake a review to reclassify the public body landscape based on the functions orgainsations are responsible for – such as regulators, inspectorates and funding agencies.
The think tank also wants any proposed ALB to be scrutinised by parliament’s Public Accounts Commitee to ensure it meets the criteria for creation before the green light is given.
Additionally, Reform is seeking a “minimum level” of seniority and competencies within departmental sponsorship teams. It suggests senior sponsors of executive agencies, non-departmental public bodies and non-ministerial departments should be deputy director level or above.
The report says that where senior sponsors are responsible for public bodies that have a high level of political risk, or a particularly large budget, the senior sponsor should be a full-time role.
A government spokesperson said ALBs play a vital role in the effective delivery of public services and are held accountable by the relevant sponsoring department and by Parliament.
“To deliver our Plan for Change, we are making sure every part of government is delivering on working people’s priorities – delivering growth, putting more money in people’s pockets, getting the NHS back on its feet, rebuilding Britain and securing our borders in a decade of national renewal," the spokesperson said.
“We are taking every step to root out wasteful spending and drive efficiency across government; this includes looking at ways to ensure public bodies are held accountable, run effectively and aligned with these priorities.”