Public Bodies: Reform

Lord Taylor of Holbeach Excerpts

Thursday 14th October 2010 Lords Chamber

[Lord Taylor of Holbeach]

My Lords, with the leave of the House, I shall now repeat a Statement made today in another place by my right honourable friend the Minister for the Cabinet Office, Mr Francis Maude. The Statement is as follows:

“Mr Speaker, this Government have taken decisive action to restore accountability and responsibility to public life. For too long this country has tolerated Ministers who duck the difficult decisions they were elected to make. For too long we have had too many unaccountable officials with a licence to meddle in people’s lives. For too long we have had quango pay spiralling out of control, so that seven people in the Audit Commission are paid over £150,000 a year at a time when the average civil servant is paid £23,000.

The landscape for public bodies needs radical reform to increase transparency and accountability, to cut out duplication of activity and to discontinue activities which are simply no longer needed. This morning, my Written Statement outlined the start of a process to curtail the quango state. I have led an intensive review into public bodies, subjecting each to four tests. The first is existential: does the body need to exist or its functions carried out at all? The answer to that question in some cases is no. For example, we decided that government did not need an independent body to deliberate on the purchase of wine. However, if, as in most cases, the body’s functions are deemed necessary, then we sought to establish whether these functions should properly be carried out at an arm’s length to government. If the body carries out a highly technical activity, or is required to be politically impartial, or needs to act independently to establish facts, then it is right for it to remain outside government. This is the case with bodies such as the OBR and Ofgem. However, any quango which does meet one of these tests will either be brought back into a government department, devolved to local authorities or its functions will be carried out by the private sector.

We have gone through an extensive process to determine the outcome of this review. Our first task was quite simply to identify how many quangos there are and what they do. It may sound absurd, but it was and it remains incredibly difficult to gain firm information on these bodies. Many do not publish accounts; there is no central list; and there are a myriad of different types, all with different statuses. The official list of NDPBs lists 679 bodies, excluding those in Northern Ireland, but that does not include non-ministerial departments, government-owned public corporations and trading funds. Our review covers 901 bodies and we believe this is the true extent of the landscape. I should stress that departmental agencies are not in scope. These are directly controlled by Ministers who are accountable to Parliament for what they do.

Once we had established the overall list, each department has gone through a rigorous process to determine whether each of their quangos meets any of these tests. The list I have published today is not complete; it is a work in progress. The House will note that a number of bodies are subject to a longer term review, such as the Children’s Commissioner or the Office for Fair Access. However, of the 901 bodies in the review, substantial reforms are proposed for over half. We propose that 192 will cease to be public bodies; 118 will be merged down to 57 bodies, removing wasteful and complicating duplication of effort; and 171 are proposed for substantial reform while retaining their current status.

For those bodies which we are abolishing, I should stress that in many cases this does not mean the end of the function. Abolishing the regional development agencies does not mean that we no longer care about promoting regional business but that we think it can be promoted in a better way. Since RDAs have been introduced, regional imbalances have got worse. The development agencies carried a staggering £212 million in administration costs. We believe that local businesses and local authorities are best placed to decide what they need, not highly paid executives imposed on them by government. An activity does not need an unaccountable bureaucratic structure in order to signify its importance; the exact converse is true. If something is important, then someone who is elected should make decisions about how it is done. This is why we are bringing a host of functions back into government, such as those of the Child Maintenance and Enforcement Commission and the Renewable Fuels Agency.

All remaining bodies will be subject to a rigorous triennial review to ensure that the previous pattern of public bodies often outliving the purpose for which they were established will not be repeated. They will be expected to become more open, accountable and efficient. I will give more detail on the new framework to the House in the new year.

All the changes proposed here will be delivered within departments’ spending review settlements. Those bodies whose status is being retained may be subject to further reforms following the spending review, in the same way as all other parts of the public sector.

I want to acknowledge the dedication and hard work of those who work in public bodies, and we are committed to working with chairs and chief executives of these bodies to ensure that change is conducted as fairly and as smoothly as possible. To enable these proposed changes, we will shortly introduce a public bodies Bill which will give Ministers power to make changes to named statutory bodies. Other forthcoming legislation, such as the education Bill and the localism Bill, will also be used to make changes directly.

I believe that these reforms are the first and necessary step to restoring proper democratic accountability to public life and signal a complete culture change in government, from one which ducks difficult decisions, is opaque and allows profligacy, inflated salaries and waste, to an administration which is open and transparent about what it does, takes responsibility for its actions and is mindful of every penny of taxpayers’ money. I commend them to the House”.

My Lords, that concludes the Statement.

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[Lord Taylor of Holbeach]

I thank the noble Lord for his thoughtful comments and questions on these reforms, as well as for his general support for the government strategy, which is, after all, to review non-departmental public bodies. As he rightly pointed out, the Government of whom he was a member were doing that, too.

I should assure the House that this review is essentially, and has always been, about accountability. I answered a question here not so very long ago about what was going on in the review and I made it clear that the three tests have mattered more than anything else. That is why I am not in a position to give noble Lords detailed answers on the budgetary implications of the changes; that will all become part of the spending review which we anticipate next week.

The noble Lord had me thumbing through my briefing given the multiplicity of bodies that he mentioned. I shall do my best to answer him. If I fail to do so and drop a catch, I shall write to him and put a copy in the Library.

On the RDAs, we will just have to agree to disagree, because the Government see it differently. The noble Lord rightly pointed to the RDAs as effective articulators of a regional voice. The local enterprise partnerships are likely to be even more effective in identifying and articulating local needs than the existing RDAs. It is an unassailable point that regional differences in this country have increased during the time in which RDAs have been in existence. It is a matter of opinion, but I am giving your Lordships the Government’s opinion, which I support.

Each of these bodies is staffed and supported by people who are passionate and knowledgeable about the particular work that they do. Such passion is admirable, but it can lead to mission creep. Noble Lords will have noted that in a number of instances. A body or committee is set up to meet a pressing or current need but, once it is in existence, it finds new work for itself. Each of these small changes are in themselves rational and well meaning but, over time, they can result in a huge number of similar bodies, as noble Lords can see from the list today, with many overlapping or even duplicating functions. It is simply good government to keep the tendency for mission creep and duplication in check.

Moreover we need to ensure that there is direct accountability to elected politicians for tough decisions. The noble Lord said that he could not see how bringing an organisation into the department would increase accountability. I would have thought that this House is very good at making departments accountable by bringing Ministers to the Dispatch Box to account for activities within their departments. In truth, many of these bodies will not have had a single question asked about them during the time of their existence. They are obscure. This will make Parliament the forum in which all government activity can be challenged, and rightly so.

We need to take stock from time to time and see if the right tasks are being performed by the right people. The need to reduce the spending deficit provides an added emphasis to the task, but that is not necessarily the prime mover for the way in which this particular review has been undertaken.

I will go through one or two of the points made by the noble Lord. He talked about the Human Fertilisation and Embryology Authority. He might also have mentioned the Human Tissue Authority, which is a similar body facing a similar absorption into a more general health and science-based review body. The creation of the Care Quality Commission has given Parliament the opportunity to achieve that. As my noble friend said yesterday, the HFEA has achieved the regard of the public and Parliament, but that does not mean that we should not review its scope and activity and look for a better way of doing what it does. That is exactly why we have looked at all these bodies and are presenting changes to the House. Change is not something to be feared. It is a challenge, but it does not mean deterioration, as some cynics have suggested. The cost of the changes will be met within departmental limits set out in the spending review.

The noble Lord asked about the General Teaching Council for England. There is a review of all the teaching bodies that are designed to maintain standards of teaching in the UK. Within the context of that change, it is believed that the General Teaching Council for England will disappear. That is not to say that the function it was performing was of no value. The same applies to Consumer Focus. Consumer Focus will be absorbed into the citizens advice bureaux, which are highly regarded public bodies with which the public relate and can identify. Although Consumer Focus has done good things, it can be replaced by the CAB and can strengthen the CAB without diluting consumer interests. It is right to do that.

The noble Lord asked for more time and deliberation—for specific conclusions on the detail, where staff will move and how functions will be delivered. We cannot have this both ways. There are proposals setting out clear intentions on accountability to be delivered by departments with staff and stakeholders. The previous Government set out their own programme of changes to 123 arm’s-length bodies. At least 50 of those proposed for consultation are within our listings. We are reforming 480 and are committed to making that happen. I hope that the noble Lord is reassured by the Government’s determination to focus on this issue both for the sake of accountability and for the sake of efficiency and good government.

[Lord Fowler]

My Lords, I support the general policy put forward by my noble friend, but I want to ask about broadcasting policy, which is dealt with in this paper. What duties are being removed from Ofcom as proposed in the paper? In particular, why has the opportunity not been taken to abolish the unnecessary BBC Trust, which has few friends inside or outside the BBC, and certainly qualifies for inclusion? Why are we not bringing private investment into BBC Worldwide, which must be to the benefit of that company and was even supported by the previous Government?

[Lord Taylor of Holbeach]

The noble Lord makes some useful suggestions for the ongoing process of the review and I am grateful to him for them. They are not covered within the existing programme of change, but the Government intend to continue to test all government bodies against their standards. I note my noble friend’s comments and I am sure that I can take them back.

[Lord Borrie]

In light of the well-publicised speech during the summer by the right honourable Vince Cable on the disastrous situation that would come about if capitalism were to be completely unrestrained, is not the proposal to abolish the Competition Commission astonishing? It is true that the Statement says that it will be merged with the Office of Fair Trading, but over the past 50 years in which the present system for advancing competition has been in force, with the Office of Fair Trading, the Competition Commission formerly the Monopolies Commission and the Government, it has generally been accepted that the system is fair, just and effective. I mention fairness because the word is so important today. The Office of Fair Trading and the Competition Commission are separate and not merged together because the more aggressive body, the Office of Fair Trading, makes prosecutorial propositions against a merger of two companies, for example, and the Competition Commission can then judicially and impartially judge between them.

The Statement emphasises the matter of political impartiality. The reason for the whole set-up dealing with competition policy, to which all parties have adhered for 50 years, is that there should be political impartiality when it comes to individual decision-making about company mergers or the restrictive practices of a particular company. They should not be subject to party-political pressure. Surely, the Minister would agree.

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[Lord Taylor of Holbeach]

I understand the noble Lord’s experience in these matters and respect it greatly. There is a view, which the Government hold, that there is duplication between these two bodies, which has led to unnecessary duplication of effort. The merger of the two bodies will make them more efficient. There will be ongoing consultation on the way in which this merger will take place and how the new body will be structured in order to make it effective. I am grateful for the noble Lord's comments. They will be taken on board.

[Lord Lester of Herne Hill]

My Lords, is the Minister aware that there will be widespread support for what is contained in the Statement about retaining the Equality and Human Rights Commission but radically reforming it? Is he aware, too, that the independence guarantees, which I personally persuaded the previous Government to write into the Equality Act 2006, were not meant to produce a situation of irresponsibility? Will he ensure that Ministers and civil servants bring home to the chairman and commissioners that they will no longer receive grants in aid unless they can demonstrate value for money in advance of the grants and not only by some kind of ex post facto review?

[Lord Taylor of Holbeach]

I thank my noble friend for his comments. Widespread concern has been expressed in the press about the Equality and Human Rights Commission and its role. We are proposing to retain it, precisely because we believe that a regulator is needed to help to enforce the laws governing equality and anti-discrimination. But we believe that the EHRC’s remit is too wide and that it has not always been well managed. That is why we are proposing substantially to reform it.

[Baroness Hayter of Kentish Town]

I declare an interest as the chair of the Legal Services Consumer Panel. We had no advance notice of this; there was an e-mail at 9.36 this morning to one of my staff—not to me—alerting us, not in the published list but in the question and answers that Ministers were given as their brief, that the Government were minded to merge the panel in with Citizens Advice. Is that the normal courtesy that you would have for an organisation that you wish to merge?

On the issue itself, the Legal Services Consumer Panel was set up with the complete support of this House as part of the Legal Services Act. It is, of course, funded by lawyers—and I thank the many lawyers here for the funding. It is accountable to the users of legal services and is wholly different from Citizens Advice. It advises the regulator on behalf of the users of legal services on how best to regulate, which is an utterly different role from that of Citizens Advice. Was there any logical thinking in putting this measure not in the published list but in the attachment, then not telling us, as well as the unusual history with Citizens Advice?

[Lord Taylor of Holbeach]

I think I can explain. As the noble Baroness said, the Government are minded but have not made a decision. There is no doubt that she will have plenty of opportunity to consult the Government and the body will be able to discuss the matter with the Government. So there is no specific proposal, but the Government are minded to merge.

[Lord Harries of Pentregarth]

My Lords, in his response to the noble Lord, Lord Hunt, the Minister mentioned the HFEA and the Human Tissue Authority in the same sentence, implying that they were comparable. Will he kindly bear in mind that, a few years ago, an attempt was made to bring together these two bodies, and they were actually found to be incompatible? It cost a lot of money to bring them together and then to rend them apart again. We are all sympathetic in this House to trying to cut costs. However, I wrote to the Minister pointing out that, with regard to the HFEA, there are other, quicker ways in which to save money, rather than going through the whole expensive business of setting up, dismembering and then trying to integrate with new bodies.

[Lord Taylor of Holbeach]

I thank the noble and right reverend Lord for putting the decision in context. Indeed, the two bodies are entirely separate, but the proposal is to treat them in the same way, by merging them into a third body within the existing healthcare bodies. That is why I referred to them together.

[Lord Crickhowell]

My Lords, one has only to look at the list of bodies to see that the review was badly needed, and I welcome the fact. However, I pick on two bodies answerable to Defra—Natural England and the Environment Agency. It is quite a long time since I handed over responsibility for the National Rivers Authority, which became absorbed into the Environment Agency, but I cannot help being struck by the strength of the criticism contained in the commentary here. It says:

“Reform through structural, process and cultural change to become a more efficient and customer focused organisation; and clarify accountabilities”.

It is of great urgency that we should have early on a detailed statement of what those criticisms are and what it is proposed that we should do about them. I cannot think of anything much more damaging for an important organisation than to have this kind of description hanging over it without clarification of what is supposed to have gone wrong. In view of the fact that the body has been answerable to Defra since it came into being, and that Defra supervised how it was set up, one wonders why it has got into a state that deserves such criticism and whether Defra is in fact the best body to sort out the mess that apparently exists.

[Lord Taylor of Holbeach]

My noble friend need have no concerns on this matter, because Defra is well aware of the difficulties of these two bodies. They have suffered from mission creep, and within their budgets there will be a redefining of their role, which is very important. There will be plenty of opportunity because the Secretary of State will, indeed, be making announcements on these bodies in due course.

[Lord Boateng]

My Lords, the Caribbean Board is to be abolished, which will be of considerable—

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[Baroness Gould of Potternewton]

I apologise to my noble friend, but I am the chair of two organisations that have been purged today, so I feel I must express my views. One of the organisations will become an advisory stakeholder group, and we might well be able to work with that. We have had lots of discussion on how that is going to happen. The other organisation, which is the only national body in this country and the whole of the UK responsible for gender, is being abolished with absolutely nothing to say that it will be replaced. It will be abolished full stop, and its work will go into the department. I want to know how the 620 organisations that belonged to the Women’s National Commission will have a voice direct to the Government, and how they will have a voice when they disagree with government. The commission has very often acted as a caveat, being able to co-ordinate the voice of women to government. I have not yet received any answers on that point.

The whole process has been absolutely diabolical. I have not received a single piece of paper until today, when I had an e-mail message from the Secretary of State that told me that we were no longer going to exist. I have had a couple of conversations with the director of the Government Equalities Office, but not one of our commissioners has. There has been no transparency in the process whatever. We have not been told at all why the three points—although it says four in the document—that we were asked to put to the Cabinet Office have not been responded to. They were put through the GEO, but we have had no response as to why it was decided that we did not qualify on any one of those three points. The whole process has been rushed and, quite honestly, if it could be done, might be subject to a judicial review. There has been no stakeholder involvement in the decisions that this Government have taken.

[Lord Taylor of Holbeach]

I am sorry to have to disagree with the noble Baroness. Some of these decisions have had to be made by government, and we take full responsibility for making them. Consultations were done with each department, and each department was responsible for ascertaining from all these bodies their capacity to meet the tests that have been set. Discussions have thus been taking place within departments and I am quite surprised to hear from the noble Baroness that she has not been aware of the discussions going on in this field, because I know that she is very much involved in these things. Concerning the women’s commission, we are really keen to move away from the idea of having a single body to voice women’s issues. Women should actually be engaged in all public bodies and articulating their views across Government.

[Lord Boateng]

My Lords, the Caribbean Board—

[Lord Brooke of Sutton Mandeville]

At a similar point in a prior Administration, I was ministerially responsible for a department with 43 non-departmental public bodies. I received a Cabinet Office instruction almost to double the proportion of women on those boards within a matter of months. That order could have been carried out to the letter either by greatly raising the number of women board members or by conducting a massacre of male innocents on their own quarter-decks. At some risk to my own quarter-deck, I minuted back about which course I was to follow. Can my noble friend give an assurance that a competent mathematician will proof-read any similar instructions before they are sent out this time?

[Lord Taylor of Holbeach]

I cannot guarantee the standards of proof-reading or mathematical skills, but I am sure that we have a highly skilled Civil Service and that no instruction will go out which is neither numerate nor literate.

[Lord Boateng]

My Lords, the Caribbean Board is to be—

[Baroness Prashar]

I stepped down as chairman of the Judicial Appointments Commission after my five-year term at the end of September. Thankfully, that commission is to be retained. However, the body was set up five years ago to enhance the independence of the judiciary and to make the process for selecting judges more open and transparent. We are of course accountable to Parliament through making an annual report to the Lord Chancellor.

The process for determining the review was less than transparent and the communication could have been better. Of course, there are second-order things in terms of efficiency which can be dealt with through a constructive dialogue between the chair, the chief executive and the commissioners, but the uncertainty still hangs about the type of reform. That kind of uncertainty, which causes a distraction from your core function, leads to waste. I suggest that it would be helpful to get some indication that there is some efficiency in how the actual reviews are conducted, that a distinction can be made between the types of quangos that are being put under review and the ones that are being retained and that those decisions will be communicated quickly to those concerned.

[Lord Taylor of Holbeach]

The noble Baroness makes valuable points and I take them on board. There is an ongoing review and dialogue concerning the Judicial Appointments Commission, because it is very important that this body achieves the high objectives which the noble Baroness has laid down for it. The Lord Chancellor is in regular contact with the Lord Chief Justice. The review’s aims will be to ensure a balance between the executive, the judiciary and independent responsibilities and, indeed, to ensure transparency and openness. I hope that reassures the noble Baroness.

[Lord Boateng]

My Lords, the Caribbean Board is to be abolished. That will be of real concern to the peoples of the Caribbeans and to all their friends, on all sides of the House and in the country. How is the profile of small island dependencies to be represented across Government, involving DfID, the FCO and the other government departments together with the wider diaspora community? These island dependencies, which have been neglected in the past, see themselves as neglected and will now see themselves relegated to the same league as the Government’s advisory board on wines—although even that function is not to be abolished.

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[Lord Taylor of Holbeach]

I am sorry, my Lords, but the truth of the matter is that the Government have taken the view that the Caribbean islands which are dependencies will have access to the Foreign and Commonwealth Office and to DfID and, indeed, that they do not need the Caribbean Board to speak on their behalf. That is a judgment that the Government have made on this issue.

[Lord Kennedy of Southwark]

My Lords, can the Minister please explain further the process that each department has gone through to make these decisions? His Statement was exceptionally light in that respect. In abolishing the Appointments Commission, will he underline the process that will be in place to ensure fairness in future appointments?

[Lord Taylor of Holbeach]

The Appointments Commission is not abolished, but perhaps I may explain that the process has been one of a dialogue between the Cabinet Office, the Minister for the Cabinet Office and the Secretaries of State of each department. As I said in the Statement, identifying non-governmental public bodies has not been easy. There is no central list, so each department was asked to identify the public bodies within its remit, then to apply the three tests which I explained to the House in repeating the Statement and the fourth test of the justification for its continued role and purpose.