Ministers should stop “outsourcing” decisions to regulators and quangos and take more responsibility for their own departments, the prime minister has said.
Government departments should be “assessing processes and regulations that play no part in delivering the Plan for Change” and taking major decisions “rather than outsourcing them to regulators and bodies as had become the trend under the previous government”, Keir Starmer told ministers yesterday.
Arm’s-length bodies should meanwhile “must go further and faster to reform the state, to deliver a strong, agile and active state that delivers for working people”, he said.
His comments – made at a weekly cabinet yesterday morning – came ahead of a speech tomorrow in which the PM is expected to announce a series of major reforms to ALBs and the civil service.
The PM’s spokesperson was asked at a press briefing whether the government was planning a “bonfire of the quangos”, but declined to provide further details ahead of tomorrow’s briefing.
“The state in Westminster has grown larger but it has not become more effective, and as [Starmer] said in cabinet we have seen examples over time of government becoming more passive when it comes to decisions,” they said.
No.10 has meanwhile announced that regulation “will be cut back” as part of the government’s drive for economic growth, fuelling speculation that several arm’s-length bodies could be axed.
The first to face the chop is the Payment Systems Regulator, which will be absorbed into the Financial Conduct Authority as the “latest step in reducing the burdens on business”, No.10 said in its announcement.
The PSR, which was created under the Financial Services (Banking Reform) Act 2013, regulates payment systems such as Faster Payments and Mastercard.
The move follows complaints from businesses that the regulatory environment is too complex, with payment-system companies having to engage with three separate regulators, according to No.10.
Announcing the PSR's abolition, Starmer said the previous government “hid behind regulators – deferring decisions and allowing regulations to bloat and block meaningful growth in this country”.
“This is the latest step in our efforts to kickstart economic growth, which is the only way we can fundamentally drive up living standards and get more money in people’s pockets,” he added.
His comments come despite Labour having set up a number of regulators since coming to power last July, including the Independent Football Regulator, GB Energy, Skills England and the National Infrastructure and Service Transformation Authority. Some of the new bodies are the result of mergers, including NISTA, which combines functions of the Infrastructure and Projects Authority and the National Infrastructure Commission.
The Payment Systems Regulator’s remit and ongoing programme of work will remain unchanged and the watchdog will retain its statutory powers until legislation is passed to enact the changes.
In the interim period, the Payment Systems Regulator and the Financial Conduct Authority will “work closely to deliver a smooth transition of responsibilities to ensure the market remains competitive”, No.10 said.
McFadden: We'll stop 'forever hiring more people and spending more money'
Speaking at the same cabinet meeting, Cabinet Office minister Pat McFadden said tomorrow's announcement will include changes to the civil service including “performance management to incentivise delivery” and reform of digital and IT infrastructure.
He said the previous administration had taken an outdated approach to “forever hiring more people and spending more money”.
Over the weekend, McFadden trailed a series of reforms to "fundamentally reshape" the civil service – which he said "would and can become smaller".
The reforms will also introduce performance-related pay for senior civil servants and a target for one in 10 civil servants to be working in a digital or data role by 2030, he said.