The prime minister has tasked his cabinet secretary with a “complete rewiring of the British state”. Yet often, these exercises overlook the role of public bodies – which now constitute around 60% of day-to-day spending. With the government expecting to deliver its missions largely through the creation of new bodies, like GB Energy and a National Wealth Fund, it is high time that this key delivery arm of the state is properly gripped.
The public body landscape is sprawling and complex, described by the Cabinet Office as an “accident of history”. Yet astonishingly, there is no authoritative list of all public bodies, (there are at least 300 classified public bodies, and many more that are not officially classified).
Despite their scale and importance, the government’s oversight of these bodies is patchy, and accountability is often inadequate.
Interviewees for the Reform think tank’s latest report, ‘Quangocracy’, explained that civil servants in sponsorship teams – the main channel departments have to oversee existing public bodies – are too often under-resourced, under-skilled and under-valued.
These teams are supposed to be the golden thread between public bodies and their sponsor departments, ensuring strategy between the two is aligned, and public bodies are performing well and delivering good value for money.
However, as one official put it to Reform: “It’s a complete mess. It’s not resourced, there’s no technical expertise. The government should be pretty ashamed of itself.”
It’s clearly unacceptable for sponsorship of bodies which spend billions of pounds to be deprioritised in Whitehall. Going forward, there should be a minimum seniority requirement for senior sponsors, those who head up public body sponsorship teams. And departments should ensure that if there are gaps in capability, training is offered to sponsorship teams or new appointments are made to fill those gaps.
Inadequate oversight and accountability of public bodies not only results in governance weaknesses, but has also resulted in headline-worthy failures of delivery, with significant impacts on the public. Take the Care Quality Commission – responsible for regulating the safety of healthcare – which was determined last year to lack the expertise necessary to do its job: in other words, to keep patients safe. Or the ballooning costs of HS2, which has cost the taxpayer billions of pounds, and which the National Audit Office concluded were downstream of the way HS2 Ltd (the public body delivering it) was governed and held to account by the Department for Transport.
But formal review processes are not taken seriously enough. Even when government commits to reviewing public bodies, these reviews frequently lack focus, and progress against their recommendations is inconsistent and opaquely tracked. Reviews of public bodies are typically carried out by the very departments that sponsor them, resulting in significant conflicts of interest, and, in the most egregious cases, chapters of the ‘independent’ reports are written by the staff leading on sponsorship.
The formal public body review process needs to be much stronger, with review findings made publicly available.
Left unchecked, the incentives are always for the number of public bodies to continue to grow. Reform’s new report shows there are strong incentives for ministers to create public bodies for the wrong reasons: as a knee-jerk response to a national scandal or crisis, or to be seen to be doing something about a difficult policy challenge. Not only does this waste time and build in additional costs, these are the wrong reasons to move important decisions further away from ministerial control.
To control this growth, the government should commit to a rationalisation of the existing public body landscape and the tests for creating new public bodies should be tightened up, instead focused on only creating new bodies when a function needs to be delivered with political independence, for example regulators. Until these changes occur, government will struggle to concentrate its limited resources on gripping the hundreds of public bodies that exist.
Public bodies are consistently overlooked when governments try to reform the state. Despite frequent discussions about prioritising implementation over policy design, not nearly enough time is spent thinking about and addressing the problems that are endemic to public bodies. Now, with a new wave of public body creation underway and Chris Wormald’s task of “rewiring” the state, the public body landscape needs to be gripped.
Alice Semark is a research assistant at the Reform think tank