Public Bodies Bill [HL]

Lord Warner Excerpts

Tuesday 9th November 2010 Lords Chamber

[Lord Warner]

My Lords, I declare an interest as the architect and first chairman of the Youth Justice Board, which is one of the bodies listed for the chop in Schedule 1 to the Bill. I should also confess to my past as a quango culler, originally as a civil servant after the 1979 election and, more latterly, as a Health Minister in 2003-04, when I conducted my own pruning exercise on Department of Health arm’s-length bodies. I have a bit of previous in this area but, even in my most hubristic ministerial moments, I never thought that I could get away with as sharp a piece of legislative practice as this Bill, with its inconsistencies, lack of impact assessments and granting of sweeping powers to Ministers to dismember what Parliament has authorised.

The Labour Government recognised that the periodical pruning of arm’s-length bodies was needed, both in my arm’s-length body review and indeed in the Smarter Government document published in December 2009. My own exercise reduced the number of Department of Health arm’s-length bodies from about 40 to 20 over three to four years and the annual cost of running them by over £1 billion. We were not afraid to be radical, but the changes were made with appropriate parliamentary scrutiny of all the legislation involved, including the proper use of primary legislation, and there was little by way of expensive compulsory redundancy, which, in the Government’s haste, may turn out to be a rather expensive aspect of some of their changes.

At the end of last year, the previous Government committed to merging or abolishing another 120 arm’s-length bodies across government, which would deliver at least £500 million. In fact, I thought that their estimate was quite conservative. Again, that would have been done in a measured way. The coalition Government have simply taken what Labour proposed but added some bigger fish, with little justification for their decisions and with no proper public consultation or parliamentary process involved. The issue before us today is not whether the pruning of arm’s-length bodies is needed but how it is done.

Many arm’s-length bodies have an important role to play in the government of a complex society such as our own, even if they are too often unfairly demonised. They are particularly necessary when we wish to secure special technical knowledge and skills, the objective gathering of data or the securing of political impartiality. This was largely recognised by Francis Maude in his Written Statement on 14 October and, indeed, again by the Minister today, but when you look at the way in which this collection of bodies has been assembled in the Bill, it is not terribly clear that these criteria have been applied to them. The Government do not seem to have clearly lived by their own rules.

As I recall, the Government started this exercise with the perfectly respectable aim of saving money, but they seem to have found that a bit more difficult to do than they expected. We now seem to have moved to a different set of justifications—of, I suggest, a slightly more dubious nature—about taking functions back inside government departments and improving transparency and accountability. As someone who worked as a civil servant for a quarter of a century in government departments, I advise them to think of some better arguments than that. We still do not know what the costs and savings are of the Government’s proposals and we need to get a better handle on that issue if it is at the core of some of the proposals.

Having been rather unkind to the Government so far, I compliment them on their approach in the Department of Health, where in July Andrew Lansley produced a pretty coherent review of health arm’s-length bodies. I suggest that other departments would have done well to emulate that. I do not necessarily agree with all the changes that he proposes in that document; I will particularly want to challenge and probe further areas such as the Human Tissue Authority and the Human Fertilisation and Embryology Authority, to which the noble and right reverend Lord referred. However, at least I can understand the Government’s thinking on the health arm’s-length bodies. That coherence of thinking seems to be lacking in many of the other departments and I am left with an uneasy suspicion that often they were asked to produce a quota by the Cabinet Office. Even in the Department of Health proposals there is the risky proposition of tampering with the world-leading Human Fertilisation and Embryology Authority, which was set up after enormous parliamentary scrutiny. We are also going to tinker again with the Human Tissue Authority, which was a matter of great sensitivity, as I know to my cost because I had to take it through your Lordships’ House.

A casual handing over of power to Ministers in areas as sensitive as these is neither good nor efficient government. This House’s own Constitution Committee has set out why this Bill is such a constitutionally unsound way of doing what the Government quite reasonably want to do—reduce the number of arm’s-length bodies. I have no problems of principle with that intention. It is fair to say that, in my experience, some arm’s-length bodies outlive their usefulness and need a decent burial. Many engage in mission creep because their sponsoring departments have been too weak to prevent their doing so, financially or otherwise. Some rather obstinately decline to merge their back-office services. Ministers too often set up a new body without proper consideration of the costs or the option of giving new functions to an existing body. All this is part of the cut and thrust of government; it goes on under successive Governments. From time to time it is perfectly reasonable to get out the secateurs and do a jolly good prune.

However, that does not mean giving Ministers carte blanche to reform, merge or abolish nearly 500 bodies without more parliamentary involvement than this Bill provides for. It also seems extremely odd to have another 150 bodies listed under Schedule 7 and kept in a state of unending uncertainty as to precisely what may happen to them. This seems to me, as a long-standing public sector manager, hardly a recipe for encouraging good performance by a stable and secure staff. The noble and learned Lord, Lord Woolf, and others have done a pretty good demolition job on Schedule 7, without needing much more from me.

Finally, I refer quickly to the issue of bodies that we know the Government have it in mind to change but which do not appear in the Bill. I will take just the high-profile example of the Audit Commission, which appears on page 5 of the Cabinet Office’s list for abolition, dated 14 October. I was surprised when the Bill was published, given the criticisms of the Audit Commission by Eric Pickles, that it did not appear. This would have given us a chance to ask the Minister to share with the House his boss’s no doubt carefully considered ideas on how he was going to have the commission’s functions discharged even more cheaply than through the commission’s own proposed reductions in expenditure and how he was going to ensure cost-effective audit of local government. I was looking forward to hearing about these things. I am happy to table an amendment in Committee to add the commission to Schedule 1 so that we can hear from the Benches opposite how they will deal with some of these other bodies that they have in their sights.

It is clear from speeches so far that the Government have a lot of explaining to do on this Bill. Many of us will want to give them ample opportunity to do so with amendments in Committee and at later stages. If the Government want to use the approaches in the Bill, they need to reduce what the noble and learned Lord, Lord Mayhew, has described as the industrial scale of the enterprise and make sure that Ministers’ powers are subjected to proper parliamentary scrutiny.