Public Bodies Bill [HL]

Baroness Scott of Needham Market Excerpts

Tuesday 9th November 2010 Lords Chamber

[Baroness Scott of Needham Market]

My Lords, perhaps I should start in the spirit of the confessional, because I am a reformed quangocrat. It was a habit that started innocently enough with the occasional meeting of a small regulator. Then I went on to the Commission for Integrated Transport and, hopelessly hooked, went on to the hard stuff and became a member of the board of the Audit Commission. I have to say that everyone I worked with in those bodies—the staff and non-executives alike—was extremely committed to their tasks and genuinely cared about serving the public, so I am very pleased that the Government have moved away from a rhetoric of demonising those public servants.

However, we must all admit that we have been too quick in the past—and I fear we will be in future—to reach for the quango as a policy response to every problem that comes before us. I heard an expression in another context which covers it, which is, “If you have a hammer, all problems look like nails”. I fear that that is where we are with quangos—we just create them. It is time to have a serious debate about how we deliver certain public functions. Should they be done by civil servants with ministerial oversight or do we genuinely need outside expertise? Can voluntary organisations do the job at least as well, if not better, particularly where there is a large campaigning element? Are the public better served in some areas by independent oversight, or is accountability more important? What we do about the use of patronage in making the appointments? How do we deal with the growing costs of the burgeoning number of arm’s-length bodies, all of which require offices, headed notepaper and all the other corporate paraphernalia? How do we deter those bodies from a slow extension of the task for which they were originally set up? We have all seen the tendency for mission creep. Who oversees the overseers, audits the auditors and regulates the regulators?

We need a fundamental review, and one that moves beyond a numbers game. I know that the Government are very focused on the need to reduce costs, and that is understandable, but many of these organisations do not spend very much money. Although there may be very good reasons for looking at them, it will not save much money. The National Audit Office has estimated that 80 per cent of NDPB expenditure is located in just 15 organisations, so you might want to start there. But then, 75 per cent of their costs are grants, which are just passed on to others, so they will not be saved by the act of either abolition or merger—you would need a change of policy direction.

There is no doubt in my mind that departments need to look at the beam in their own eye. Many of them micromanage the bodies which report to them and create unnecessary administrative burdens. In other cases, departments just lose interest in their bodies. Then you get poor communication and organisations completely out of touch with what the department and the Government are seeking to achieve. In other cases, those arm’s-length bodies end up as a kind of sandwich between competing interests. I know that when I was on the board of the Audit Commission, at one point we were engaged in a process of reducing the regulatory burden, in line with the wishes of our sponsoring department, while civil servants and Ministers in other departments were constantly coming to say that they wanted this performance management scheme, or some other regulatory burden, added. We need to look at that.

The great range of organisations contained in the Bill, from the Wool Marketing Board to Channel 4 and from the Theatres Trust to the Equality and Human Rights Commission, is a demonstration of the complexity of arrangements that have developed over the past 30 or 40 years. In the case of some of them, for example, Channel 4, it is questionable whether it is even a public body and should be in the Bill. Other noble Lords have highlighted cases where there are omissions for no reason that can be understood at the moment. This is where I begin to have a problem with the Bill. It seems to me that creating a Bill like this—an enabling Bill which simply puts together this vast array of bodies and then subjects them to reform, change and abolition with minimal parliamentary scrutiny, is just asking for trouble.

Many of these organisations were formed only after intense parliamentary scrutiny of primary legislation and, in many cases, were better for it. The fear here is that change imposed by Ministers after minimal consultation will result in imperfect statutory instruments coming before Parliament and Members—particularly in this House, with all their expertise—will see all the flaws but be pretty impotent to do anything about it, given that the orders will be unamendable, that there will be a 90-minute guillotine, that they will be grouped together and that, finally, we have only the nuclear option of voting the whole thing down.

It is already apparent from the range of organisations that has been in touch with me and other noble Lords that, whatever the Government's intention, the creation of Schedule 7 has resulted in a sort of death row for quangos. They know that the short timescale required to impose change by statutory instrument will create a climate of uncertainty which will affect their operational management and recruitment and make long-term decision-making virtually impossible. It will also have a very negative effect on the relationship between the departments and the organisations. Where those organisations have a primary function of holding the Government to account, it will compromise that very function in the eyes of the public by having such an impermanent relationship. Some of the consequences are absurd. The Office of the Commissioner for Public Appointments, set up to ensure a fair and unpartisan appointments procedure, could itself be changed as a result of the Bill.

It is funny how people tend to think about constitutions as dry things that do not affect the stuff of everyday life, because here we have a constitutional issue which demonstrates how the constitution is inextricably linked with good governance. I am dismayed that, over the years, Whitehall fails to learn this. I quite enjoyed the outrage from noble Lords on the Labour Benches, and I gently remind them that the Constitution Committee notes:

“The House will recall various occasions in recent years on which Parliament has sought to resist executive proposals for Henry VIII powers”.

In its briefing, Liberty comments:

“This Bill follows a trend popular with the last Government of avoiding the necessary rigours of parliamentary scrutiny”.

Let us not pretend that this is a problem which has just emerged since May. This has been many years in the gestation and is a classic Parliament versus Executive problem.

These bodies—quangos, arm’s-length public bodies, whatever we call them—have become a fundamental part of British public life. Reform is certainly necessary, but as the excellent Institute for Government report is so aptly titled, we should Read Before Burning. Its report sets out the case for reform, but it is thoughtful, rooted in reality and sets out a road map for bringing these bodies into a more rational framework over time. The danger of the Bill is that it sets out a legislative framework for a reform process which is itself deeply flawed.

I welcome the Minister's words at the start of this debate that the Government will be prepared to look at improving the Bill. I urge them to take a look at the super-affirmative procedures which will improve consultation and improve the ability of this House particularly to scrutinise. We need to remove the provisions for omnibus orders to come to this House, and we need to allow this House to use the expertise that it undoubtedly has.