Three years on from the passing of the coalition government’s Public Bodies Act, what more needs to be done to demonstrate that the system of arm’s-length government in the UK has been reformed for good?
Yesterday’s report from the Public Administration Select Committee (PASC) provided plenty of food for thought for Francis Maude, the minister for the Cabinet Office who has spearheaded the government’s reforms to arm’s length bodies (ALBs) since 2010. PASC praised the progress Maude has made in terms of reducing the costs of arm’s length government. It also pointed to improvements in how government departments hold their arm’s length bodies to account and the fact that government now publishes much more reliable information on numbers and costs of ALBs. But the overall tone was not entirely complementary. PASC Chair Bernard Jenkin, who has come into conflict with Maude in the past, said: ‘Despite the reforms, the system of arms-length government is still a mess, and the government knows it’s still a mess.’
Jenkin’s committee has recommended a number of potential improvements in government’s approach to ALBs but the main recommendation is that government should adopt a much simpler way of classifying arm’s length bodies. This is something the Institute for Government has called for since 2010 based on its research. WE, like PASC after us, found a bewildering array of organisational forms – at least 11 ‘types’ – and no rhyme or reason for why ALBs took a particularly form. Names were alarmingly misleading. The Environment Agency is, for example, a Non-Departmental Public Body, not an Executive Agency. The Non-Ministerial Department HM Revenue & Customs may not report to ministers in theory but they do in practice.
The messiness matters. It confuses the public and fuels perceptions that quango-land is out-of-control. But it has much more practical implications too. Crucially, it bewilders ministers, so most ministers largely ignoring distinctions in the amount of freedom different ALBs should have – directing organisations that need to retain independence (for example, economic regulators who cannot be seen to favour particular companies or interest groups) and coming into conflict with these organisations as a result. It also bewilders parliamentarians, who struggle to understand who is responsible for which decisions and therefore who should be held to account after failures. The unedifying blame games around last winter’s floods are a case in point. And the confusion also contributes to misunderstanding between departments and ALBs, leading to duplication of activity across these organisations, strained relationships that result in miscommunication and unpleasant surprises for ministers, and failures to ensure that ALBs are recognised for successes while being encouraged to constantly improve.
Maude has recognised the problems. The Cabinet Office announced last week that it is running a review of administrative classification intended to determine whether the current system for classifying bodies is ‘fit for purpose’. And speaking at a conference at Apsley House yesterday, Maude conceded that he could have started to address the confusion sooner but felt it was more critical to move quickly on cost-saving measures.
There is a real imperative to ensure this opportunity for reform is not missed. PASC’s critique demonstrates that however much progress Maude has made so far, failure to address the confusing array of organisational forms and governance models will mean descriptions of his achievements are always accompanied by major caveats. And future governments will thank him if he can leave a legacy of a saner, as well as a smaller, landscape. Yet achieving change in the six months before the election will not be straightforward. Maude may need to take a cross-party approach to ensure that much-needed changes are pushed through but there is no reason that this should be a hotly contested party political issue. If Maude drives the hard work of agreeing a more effective approach and developing a plan for implementing it, no government should undo it in future so there are reasons for optimism. Maude may end up with a legacy of a truly reformed system of arm’s length government after all.
Tom Gash is director of research at the Institute for Government
