In a report released Monday 10 November 2014, PASC says the system of arms-length government – quangos and agencies – is still "confused and opaque" and lacks accountability, despite the government’s reforms.
The Committee’s report describes an inconsistent and cluttered system of quangos, executive agencies and non-ministerial departments which is poorly understood even in central government and where accountability is confused, overlapping and neglected, with blurred boundaries and responsibilities. It calls for a clear "map of the state" to be drawn up to simplify and rationalise the structure of the state, including a clear ‘taxonomy’ so that it is clear how each is governed and overseen, and who is accountable for what.
Case Study: NHS England
Up-to-date, plain English statements of statuses, roles and relationships are needed even if the underlying arrangements are complicated. This is far from the reality in many cases, particularly in the NHS. The Committee uses NHS England as a case study of the problem: with a budget of £95.6 billion it is now by far the largest public body in England and its accountability should not be in any doubt, but it is still evolving. It is not acceptable that the Department of Health took more than two years to update its ‘accountability system statement’. This left accountability relationships unclear during a period of major organisational change.
The latest published and audited figures show annual spending reductions under the Public Bodies Reform Programme were an estimated £723 million in 2012-13 compared to 2010-11. The Committee says that the significant reforms of public bodies that have been implemented have not been coordinated with civil service reforms and health reforms, and it is unconvinced that the reforms have in fact increased accountability. In some cases, increased direct accountability to ministers has come at the cost of reduced transparency and accountability to Parliament and to the public. Transparent information should continue to be published on the effectiveness of functions, whether these functions are performed in or outside of central government.
In many cases how individuals are appointed to the boards of public bodies also remains obscure. So is the basis for deciding whether or not to reappoint a person, as the controversy surrounding the departure of the previous Chair of Ofsted demonstrated. The Government and the Commissioner for Public Appointments should clarify who is involved in a public appointment, at what stage, and whether they advise or decide.
Bernard Jenkin MP, Chair of the Committee, said:
"The controversy around the government’s handling of flooding last winter showed that arm’s-length government is confused and opaque. Despite the reforms, the system of arms-length government is still a mess, and the government knows it’s still a mess.
Vast amounts of money are involved here, £95.6 billion in the case of NHS England alone, and it is simply not acceptable that there is no clarity or clear accountability for that kind of public expenditure.
The key to accountability and effectiveness is the quality of relationships between the relevant department and its arms-length bodies. However complicated the arrangements may have to be, there is no excuse for lack of a clear understanding of statuses, roles and relationships. Too often, relationships lack trust and understanding. Blame is used to avoid accountability
The architecture is not meant to be reminiscent of the film, 'The Matrix' where doors open on virtual worlds which are insulated from reality and hidden from the public and from those meant to be accountable for them.
Whoever wins the election, there is bound to be more change in the structure of Whitehall, involving arms-length bodies. It would be very helpful to any government with a new mandate to establish a clear framework for such decisions before the election."