Public Bodies Handbook – Part 1 Classification Of Public Bodies: Guidance For Departments Introduction
2 Introduction
The Importance Of Classification About This Guidance
Administrative classification will provide departments with the guidance and ability to create This ‘Classification of Public Bodies’ document is departmental guidance from the Cabinet arm’s length bodies that fulfil their governance objectives within a clear, consistent and Office. It sets out the different categories of the UK’s public bodies, and: comparable system. This system will lead to a simplified and more transparent public bodies’ landscape, promoting greater accountability. It will provide a clear and intelligible map of the provides a high level introduction to the early decision making process for establishing different landscape and aid public and internal understanding of relationships between public bodies types of public bodies; and government ministers. It will also promote efficiency and effectiveness, helping to drive strategic reform of the landscape and the development of best practice models. summarises and provides a first point of reference on the main characteristics of each of the ALBs that the Cabinet Office focusses on, as well as those of other forms of public bodies; and The Classification Framework provides information on the some of the now defunct or legacy forms of public bodies that The system of administrative classification comprises the ‘framework’, and the ‘process’ of still exist. applying that framework to public bodies. This is the part of the classification system that handles the application of the framework as public bodies are established, modified or closed. This document is to be read as an introduction and high-level guide for establishing public The framework is the supporting structure to administrative classification. bodies. It should be read in conjunction with the rest of the Public Bodies Guidance Handbook, which will cover in more detail the actual steps required to setting up ALBs, and related The guiding principle underlying the framework is that the classification of an arm’s issues. Part 1 of the Handbook provides guidance on the classification of public bodies and length body (‘ALB’) should be determined by the degree of freedom that body needs provides definitions of the categories ofpublic bodies that operate within the public sector. from ministerial control to perform its functions. The main focus is on arm’s length bodies, though for context it also provides an overview of public corporations, certain Parliamentary bodies, public bodies belonging to the Devolved It is made up of three categories of ALBs: Executive Agency, Non Departmental Public Body, Assemblies, Local Government public bodies and some entities that operate within Ministerial and Non Ministerial Department. The framework establishes the differences between these Departments. Whilst there may be other entities that perform a public or Government function categories and the relationship each has to its home or sponsoring department if it has one. unless they fall into the above forms, they are out of scope, as are private sector entities. It updates and replaces the Categories of Public Bodies: A guide for Departments issued by the Cabinet Office in April 2012.
3 Introduction
Public bodies are diverse, which means classification is not always a simple process. For ease of reference, and to help departments understand the different delivery models that exist, this guidance sets out the main categories of public body. This guidance covers:
The ALBs that are classified.
Other non-classified central government and parliamentary entities. Department Specific, Devolved Assembly and Local Government public bodies.
Public corporations.
The information on bodies that are not administratively classified has been included to provide an overview of the wider UK public bodies landscape. It does this in a way that allows for relatively easy comparison between these different types of public bodies, by looking at the sorts of factors that impact on their design and creation, then listing the key common characteristics that make up and differentiate each category of public body.
The Role Of The Public Bodies Reform Team
The Cabinet Office’s Public Bodies Reform Team should be contacted by departments that wish to establish new ALBs. Early involvement of all relevant parties, including the department’s central governance (or dedicated public bodies) team and the relevant HM Treasury Spending Team, is important to ensure that a body is classified correctly and in accordance with Government and departmental intentions for the body in question. This also allows scope for amendments to the governance and control arrangements to be considered before the public body is formally classified to a particular category of public body.
4 Introduction
The Public Sector & Its Public Bodies
Public Sector Once the ONS has classified a body as public More details on sectoral classification for the Charities sector (its general corporate policy is controlled national accounts are available from the ONS The ‘public sector’ is defined by the Office by the government) it is classified to a particular website http://www.ons.gov.uk/ons/guide- It is worth noting that some Public Bodies are of National Statistics (‘ONS’) with reference sub-sector based on its characteristics. These method/classifications/na-classifications/ also classified and registered as charities by to the European System of Accounts 1995 sub-sectors are: the-ons-classification-process/index. the Charities Commission. This is a separate in accordance with EU requirements for html. system of classification that applies to Governments to produce accurate public Central Government: institutions that are established for charitable sector finances and national accounts. The includes Government Departments and their Public Bodies purposes only and subject to the control of National Accounts (or Sectoral) classification ALBs: Executive Agencies, Non-Departmental the High Court’s charity law jurisdiction. This of entities as public or private depends on the Public Bodies, Non Ministerial Departments, A ‘public body’ is a formally established is mentioned for information only, and is not level of government control over the general and any other non-market bodies controlled organisation that is (at least in part) publically within the scope of this document. More corporate policy of the entity being classified. and mainly financed by them; funded to deliver a public or government information about UK charities can be found This can be direct or indirect and may be service, though not as a ministerial department. here: https://www.gov.uk/government/ evidenced by indicators that include: Local Government: The term refers to a wide range of entities that publications/what-makes-a-charity-cc4/ includes those types of public administration are covered as within the Public Sector. This what-makes-a-charity-cc4 The ability to appoint those in control, or those that only cover a specific locality and any non- does not include forms of public entity that who determine the policy of the entity; and / or market bodies controlled and mainly financed do not require staff to carry out their functions, by them (see chapter 5); and such as public funds or trusts. A right to be consulted over such appointments, or to have a veto over appointments; and / or Public Corporations: Arm’s Length Bodies market bodies controlled by either Central The provision of funding accompanied by Government or Local Government. These The main focus of this document and of rights of control over how that funding is include any type of public entity that is a market most interest to departments are ‘arm’s spent; and / or body. Market bodies are defined as entities length bodies’ or ‘ALBs’. These are a specific that gain over 50 per cent of their income from category of public body that are administratively A general right to control the day-to-day purely commercial activities (see chapter 6). classified by the Cabinet Office. ALBs include: running of the body. Executive Agencies (‘EA’), Non Departmental Public Bodies (‘NDPBs’) and Non Ministerial Departments (‘NMDs’).
5 Chapter One
How To Reach The Right Category Of Public Body
6 Chapter 1 | How To Reach The Right Category Of Public Body
1.1 Determinant Factors Chart 1 Initial Questions On Setting Up Public Bodies
New public bodies should only be created if there is a clear and pressing requirement, a Is the proposed public or government Yes: clear need for the state to provide the function service or function really needed, and Required Function or service through a public body, and no should it be provided by the state? viable alternative - effectively establishing new public bodies as a last resort. This is to prevent any unnecessary increase in the
number of public bodies. Is there sufficient demand for this, No: Consider Waiting Yes: Consider and does it contribute to Government Until Actual Demand Next Step Departments should consider whether the policy, committment or legal Before Setting Up. proposed functions are needed, and whether obligation? there are any alternatives to establishing a new public body (this requires at least a basic understanding of the various alternatives for Is it unique or something sufficiently Similar: Link Yes: Consider delivering new services or functions). These similar already being provided To Existing Next Step initial considerations form the first part of the elsewhere? Entity determinant factors that lead to the main types of public bodies available.
1.1.1 Initial Considerations Will this entity operate commercially, Commercial: Provided Non Commercial: The following decision tree sets out a range covering over 50% of its cost from By Public Corporation Look To Provider commercial activities (Chapter 6) of issues that departments should consider when setting up new public bodies. This is not an exhaustive list and departments should think creatively when considering how new services or functions should be delivered. Should the function be provided Gov: Provided By An Parlt: Provided By LG or DA: Provided However, as a minimum, departments should by Government (‘Gov’), Parliament Arm’s Length Body Entity Set Up By By Entity Set Up By explore the following options as a precursor to (‘Parlt’), Local Government (‘LG’) or (Chapter 2) Or Within & Accountable To & Accountable To LG a Devolved Administration (‘DA’)? Department (Chapter 3) Parlt (Chapter 4) Or DA (Chapter 5) choosing the form of delivery for that function:
7 Chapter 1 | How To Reach The Right Category Of Public Body
1.2 Options Of Public Bodies 1.2.1 Administratively Classified 1.2.2. Non-Classified 1.2.3 Non-Classified Government ALBs: Government Entities: Parliamentary Bodies:
Once departments have considered the initial These are the main recognised categories of These are some of the categories of While the majority of public bodies that questions contained within Chart 1, there public bodies within the UK. They are subject Government public bodies that are not operate within the UK are established and follow a series of options for each category to ONS National Accounts classification, covered by administrative classification. operated by the Government, some are set dependent on whether the entity receives over as Central Government. These categories They are included in this document to up by and directly accountable to Parliament. 50 per cent of its funding from commercial are the preferred method for delivery for provide a fuller description of the overall See Chapter 4 for more information on activities and then which part of the state department sponsored public bodies public bodies’ landscape. See Chapter 3 for Parliamentary bodies. should be accountable and administer the (that do not have a majority income from more information on the following forms of body (the Government, Parliament, Local commercial activities). non-administratively classified government Government or the Devolved Administrations. entities: Each of the categories listed below are 1.2.4 Non-Classified Local The main resulting categories of public entity covered in greater detail within subsequent Offices and Taskforces distinct– groups Government & Devolved are as follows: sections of the Public Bodies Guidance within a department that are usually set up Administration Bodies: Handbook. See Chapter 2 for more to deliver on a specific task or project. information on the following categories of Similar to Parliamentary bodies, these are set up by and directly accountable to ALB: Working Groups – department specific teams of advisors usually civil servants, either Local Government or the Devolved Administrations. See Chapter 5 for more Executive Agency – a public body that acts though can include external specialists; as an arm of its home department. advice does not need to be independent information on each. of the department. Non Departmental Public Body – a public body that operates separately from Expert Committees – committees of its sponsoring department. independent specialists, administered from 1.2.5 Public Corporations: within a department. Any public entity that is at least 50 per cent a public Non Ministerial Department – funded through commercial activities will be body that shares many characteristics with Statutory Office Holder – post created classified by the ONS National Accounts a full department, but without a minister by legislation to carry out public functions. system as a Public Corporation. These and acts separately from any sponsoring are only included in this document for department. Department specific – public bodies illustrative purposes. See Chapter 6 for that are uniquely classified by specific more information on Public Corporations. departments.
8 Chapter 1 | How To Reach The Right Category Of Public Body
1.3 Category’s Characteristics
Each of the three categories of ALB possess Setup and Position in Government: certain characteristics (listed below) that are Looks at how public bodies are established, consistent and comparable, meaning all and where they fit within Departments. examples of a particular category will have the same characteristics no matter what they do Duration: or which department they are sponsored by. Covers how long a public body will operate for. The individual category specific combination of characteristics will form a unique list that Appointments and Management: help define (and contrast the differences Looks at how the public body is managed between) the categories of ALBs and some at a senior level and how that management of the other forms of public bodies. structure is appointed.
These comparable characteristics are: Status of Staff: Covers whether the staff are civil servants or Sources of Funding / Income: another category of public servants, as well Examines the different public and private as how they are employed and their status. revenue streams available for funding public bodies. Financial Accounts: Examines where the public body’s accounts Relationship to the Home Department: are prepared and published. Covering oversight and accountability, by listing the ability for departments to control These characteristics and the options for each public bodies from a strategic, policy or of them are fully covered in Appendix A. They operational level, as well as addressing how are also presented in a comparative table they are accountable and to whom. which lists the characteristics for most of the categories of public body in Appendix B.
9 Chapter Two
Categories Of Government Arm’s Length Body
10 Chapter 2 | Classified Arm’s Length Public Bodies
This chapter covers the three categories of Chart 2 Choices To Determine Categories Of Public Entity administratively classified arm’s length public bodies, which include Executive Agencies, Non Departmental Public Bodies and Non Is it necessary for the Government to provide the service or function? Ministerial Departments. The following sections Yes will provide details on the determinant factors See Chart 1. that lead to each category and the unique pattern of comparable characteristics that typify each of these administrative categories. The following decision tree lists the main Should the service be delivered No: Requires External Yes: Delivered options for administratively classified ALBs. or administered internally within Technical Expertise, Internally Within a ministerial department? & Political Impartiality Ministerial Department. See Chapter 3 2.1 Choice Of Government Provided Public Body
Once departments have considered the initial questions contained in the decision tree at What degree of freedom from the Accepts Direct Accepts Grant In Aid, Funded from Own Department is required to fulfil the Funding. Close Dept. Can Levy Fund. Some Estimate. Greater Chart 1, there follows a series of questions to body’s function? Policy Alignment Operational Control Operational and help determine the best option for the public Over Policy Policy Control. body. These cover:
The appropriate level of departmental control which will determine whether or not it should Administrative Executive Agency: Non Departmental Public Non Ministerial be delivered or administrated by a department Categories available: Arm Of Department, Body: Operationally Department: Distinct No Separate Legal Independent Of Dept, Usually From Dept., Usually directly, or if independence is required; and Personality Separate Legal Personality Separate Legal Personality
If independence is needed, category of ALB is best suited for delivery of the function by virtue of the degree of freedom it requires from Options, dependent on function: NDPB NDPB With Independent the Department in order to fulfil its function. Advisory Function Monitoring Board
11 Chapter 2 | Classified Arm’s Length Public Bodies
2.2 Executive Agency
Executive Agencies are clearly designated Examples Comparable Characteristics Determinant Factors: (and financially viable) business units within departments which are responsible for Skills Funding Agency, Planning Inspectorate, Oversight / Accountability: Is it necessary for the Government undertaking the executive functions of that Valuation Office Agency. Dept sets policy, minister accountable to to provide the service or function? department, as distinct from giving policy Parliament. Yes advice. They have a clear focus on delivering Exceptions specified outputs within a framework of Sources Of Income: Should the service be delivered Included in home dept estimate. accountability to Ministers. While they are Trading Funds: Usually EAs that are specially or administered internally within managerially separate, they are independently classified by ONS as public corporations. a ministerial department? accountable within their home department, They are a means of financing the revenue- Setup & Position In Government: Externally which also reports to Parliament on their generating operations of a Department or Part of home dept, established by home agency-specific targets. Due to this close public body which takes them outside the dept, sometimes under legislation but without What degree of freedom from the working relationship, executive agencies are supply process. They are not separate legal separate legal personality. Department is required to fulfil the part of their department, and do not have entities and remain part of a Department body’s function?” the same level of legal separation from their (or are Departments in their own right). Duration: Accepts Direct Funding. Close Dept. home departments that other categories of Trading funds are no longer an option for Permanent. Policy Alignment. public bodies often possess. EAs. Existing funds will be reviewed in the ordinary course of business and can be Appointments: Administrative Categories available: Minister appoints CEO via a civil service Category Specific Aspects reclassified if necessary(see chapter 6). Executive Agency commissioners appointment, and non-exec Varying in staff and budget size, varying in For a variety of chair. NMDs with EA Status: Yes remit, though generally not wide enough to historic reasons the previous classification No: Requires External Technical Expertise, & Political justify NMD status, allows departments to system allowed a number of EAs to be dual Staffing: Impartiality
Accepts Direct Funding. maintain strategic control and policy lead. Civil servants. Close Dept. classified as NMDs. This resulted in a lack of Policy Alignment HM Courts and Tribunals Service (‘HMCTS’) consistency between NMDs, and possible is an Executive Agency that provides courts conflicts of governance. In future dual EA/ Accounting: and tribunal functions for HM Government. NMD classificationis not an option. Existing Produce their own but consolidate with home Although there are some tribunals that operate EAs with dual NMD classification will be dept. as separate NDPBs, all new tribunal functions reviewed in the ordinary course of business must be delivered within HMCTS and not as and can be reclassified if necessary. separate NDPBs.
12 Chapter 2 | Classified Arm’s Length Public Bodies
2.3 Non Departmental Public Body
NDPBs have a role in the process of national Examples Comparable Characteristics Determinant Factors: government but are not part of a government department. They operate at arm’s length Arts Council England, Competition Appeals Oversight / Accountability: Is it necessary for the Government from ministers, though a minister will be Tribunal. Dept. usually sets strategic framework, minister to provide the service or function? responsible to Parliament for the NDPBs. accountable to Parliament. Yes The category also includes NDPBs with Exceptions advisory functions, and Independent Sources Of Income: Should the service be delivered Monitoring Boards (‘IMBs’ which are There are three NDPBs that are also Crown From Dept. estimate, usually delivered as grant or administered internally within now included as department specific entities, meaning they are not as separate in aid; other sources can include levy powers a ministerial department? bodies). They are also set out below, as from the Crown as other NDPBs. This has and charitable donations. Externally they can possess different characteristics. various effects, such as allowing them to employ civil servants. Setup & Position In Government: How much Independence from Category Specific Aspects Established and sponsored by Dept. with the department is required? These are included here as an explanation own separate legal personality, outside of Accepts Grant in Aid, Can Levy Fund, Previously, there was a distinction between of the landscape – but are exceptions to the the Crown. Some Operational Control over Policy Executive and Tribunal NDPBs. However, as rule. As such new Crown NDPBs should not all new tribunal functions must be established be established in this manner. Duration: Administrative Categories available: within HMCTS, the Tribunal sub-category is not At least three years. Non Departmental Public Body an available option. Legacy Tribunal NDPBs Their sources of income: included within will remain in place, though for the purposes home department estimate, usually delivered Appointments: Options, dependent on function: of this document they are not included, which as grant in aid (though with levy or charges), Ministers normally appoint the chair and all NDPB allows for Executive NDPBs to be referred to less likely to alternative fund raising. Their non-executive members, and are consulted only as ‘NDPB’. staffing: civil servants. on the appointment of the CEO. Yes
No: Requires External Technical Expertise, & Political Staffing: Impartiality Public servants
Accounting: Produce own, consolidated within home Dept.
13 Chapter 2 | Classified Arm’s Length Public Bodies
2.3.1 NDPBs With Advisory Functions 2.3.2 Independent Monitoring Boards
Category Specific Aspects Comparable Characteristics Category Specific Aspects Comparable Characteristics (where different to NDPBs above) (where different to NDPBs above) These NDPBs consist of external (non-civil IMBs are statutory public bodies established service) experts who operate in a personal Oversight/Accountability: by the Prison Act 1952 (and the Armed Sources Of Income: capacity to form boards or committees Dept. usually sets strategic framework, Forces Act 2006 for the sole military IMB) to Included in Dept. estimate. to advise ministers on particular policy advice is impartial and apolitical, with minister monitor the welfare of prisoners in the UK to areas. They are often supported by a small accountable to Parliament. ensure that they are properly cared for within Setup & Position In Government: secretariat from the sponsoring department, Prison and Immigration Centre rules, whilst in Set up alongside new prisons, without separate which also provides funding. They provide Sources Of Income: custody and detention. They are responsible legal personality. independent specialist advice (free from Included in Dept. estimate. for the state of prisons (and some detention political control) to departments. There are centres), including their administration and Duration: other forms of advisory entity that exist, Setup & Position In Government: the treatment of prisoners. Given the specific Dependent on their home prison. such as Expert Committees, that operate Independent of but established by Dept. nature of IMBs they are better classed as similarly but as part of their department (see without separate legal personality. Department specific (see Chapter 3). Appointments: Chapter 3). Secretary of State appoints board. Appointments: Examples Examples Minister appoints members. Staffing: HMPs Pentonville, Long Lartin and Wormwood Unpaid volunteers as board. Advisory Council on the Misuse of Drugs, Staffing: Scrubs. Boundary Commission for England. Committee of Independent specialists Accounting: (supported by Dept. civil servants as a Determinant Factors: Do not produce their own – any income or Determinant Factors: secretariat). expenditure forms part of the Dept.’s accounts,
Yes Accounting: No: Requires Yes External Technical Expertise, & Political Do not produce their own – any income Impartiality
No: Requires External Technical Expertise, & Political or expenditure forms part of the Dept.’s Impartiality accounts,
14 Chapter 2 | Classified Arm’s Length Public Bodies
2.4 Non Ministerial Department
NMDs operate similarly to normal government Examples Comparable Characteristics Determinant Factors: Departments in the functions they perform (though usually they are more specialised HM Revenue & Customs, National Crime Oversight / Accountability: Is it necessary for the Government and not as wide ranging in the policy areas Agency, Competition and Markets Authority, Sets own delivery policies, though Dept. can to provide the service or function? they cover). They generally cover matters Serious Fraud Office. set the strategic framework, usually minister Yes for which direct political oversight is judged accountable to Parliament. unnecessary or inappropriate. They are Exceptions Should the service be delivered usually headed by a senior civil servant as Sources Of Income: or administered internally within Chief Executive, with an independent Chair There are some examples of NMDs that Usually from own estimate; other sources can a ministerial department? and non-executive directors for the board. also hold Executive Agency status, which include levy powers. Externally Some are headed by a permanent office has resulted in a lack of consistency holder, such as a Permanent Secretary or between NMDs. Whilst in practice there is Setup & Position In Government: What degree of freedom from the Second Permanent Secretary. a dominant choice of governance structure, Usually established by the PM as a Dept. in its Department is required to fulfil the on paper there are conflicts between the own right, with separate personality. body’s function? Category Specific Aspects two categories. As such this practice is Funded from own estimate. to be avoided, and no future NMD should Duration: Greater operational and policy control. In some instances NMDs report directly to be given dual NMD and Executive Agency Permanent. Parliament, instead of having a sponsoring status. Existing multi-classified bodies will be Administrative Categories available: Minister report on their behalf. However, as reviewed in the ordinary course of business Appointments: Non Ministerial Department this is relatively uncommon, the NMD option and have their classification reassessed if Sponsoring minister usually appoints board is only rarely viewed as the best option when members, though usually subject to pre- and where necessary. Yes setting up new ALBs. HM Treasury’s Managing appointment scrutiny by parliament.
No: Requires External Technical Expertise, & Political Public Money guidance raises this issue of Impartiality potentially limited accountability to Parliament. Staffing: NMDs can sponsor their own public bodies Civil servants. (usually NDPBs). Accounting: Produce own accounts.
15 Chapter Three
Non-Administratively Classified Government Entities
16 Chapter 3 | Non-Administratively Classified Government Entities
This chapter will cover the Government entities Chart 3 Choices To Determine (Non-ALB ) Ministerial Entity that fall outside of the main administratively classified categories of ALBs, (see Chapter 2). It is included for completeness and to provide a Is it necessary for the Government to provide the service or function? useful guide to some of the possible alternatives Yes to ALBs. These are entities that, whilst distinct See Chart 1. from regular department operations (and in some instances even staffed by external non- civil servants), are still administrated within a ministerial department. As such they do not operate at arm’s length to ministers. Should the service be delivered or Yes: Delivered No: Requires External The following chart focuses on the questions administered internally within Internally Within Technical Expertise & a ministerial department? Ministerial Political Impartiality. that lead to these non-administratively Department. See Chapter 2. classified government entities
3.1 Choices Of (Non-ALB) Ministerial Entity Is this function carried out as a Project Or Taskforce Attached To Dept. Though Once departments have considered the initial discrete project within the Dept. by In Dept: Requires Separate: Controlled & Funded Individual Treatment. By Dept, Though With External questions contained in the decision tree at its staff, or by external staff (though not administered at arm’s length)? Staff/Members. Chart 1, the following choices will determine the best option for the ministerial entity.
Will the function or service provided within the department be: Resulting options, dependent on Office or Working Expert Statutory Department By the department’s civil servants (though it function and staffing: Taskforce. Group. Committee. Office Specific Holder. Public Body. can bring in external support), but as a discrete project or taskforce; or
By external staff (public servants), as a discrete entity though not administered at arm’s length. There now follows a breakdown covering each of the non-administratively classified government options available.
17 Chapter 3 | Non-Administratively Classified Government Entities
3.2 Department’s Office Or Taskforce
These are distinct entities that form part of Category Specific Aspects Comparable Characteristics Determinant Factors: government departments. They are usually set up for a specific project or initiative, with Smaller, variable duration though usually Oversight/accountability: Is it necessary for the Government dedicated teams with Departments. limited to less than three years, easier to Part of Dept. as such sets own policy, to provide the service or function? set up (usually not requiring legislation, minister accountable to Parliament. Yes They do not have executive agency status Parliamentary authorisation or estimate (and do not have the governance structures funding), with far more direct ministerial control Sources of Income: Should the service be delivered or the operational autonomy of an executive and accountability than there would be for Included in Dept. estimate. or administered internally within agency). They are staffed by civil servants and other types of public bodies like NDPBs. a ministerial department? work within the rules and processes of their Setup & Position In Government: Internally relevant home department. Examples Part of Dept., set up at minister’s discretion, without legislation or separate legal personality. Is this function carried out as a discrete A small number of offices and taskforces Better Regulation Executive, Office of Tax project within the Dept. by its staff, or are cross-cutting (and bring together staff Simplification Duration: by external staff? and policy responsibilities from different Varies, though usually less than three years. Project or taskforce in Dept departments). Some offices have non- executive Chairs and/or members who provide Appointments: Resulting option, dependent on strategic direction, advice and leadership. Minister or Dept. official to appoint the head function and staffing: These are usually appointed by ministers. (usually a civil servant) and board if there is one. Office or Taskforce
Staffing: Civil servants, with external support if required.
Accounting: Does not produce own, any income or expenditure included in Dept. accounts.
18 Chapter 3 | Non-Administratively Classified Government Entities
3.3 Department’s Working Group
Working groups are part of government Category Specific Aspects Comparable Characteristics Determinant Factors: departments. They are not independent advisory entities such as Advisory NDPBs Smaller, more specific with flexibility on duration Oversight / accountability: Is it necessary for the Government or Expert Committees (both of which are (it does not have to be time limited), easier to Part of Dept. as such sets own policy, to provide the service or function? operationally independent in terms of the set up (not requiring legislation, Parliamentary minister accountable to Parliament. Yes advice they gather, analyse and present). authorisation or estimate funding), far more Working groups comprise of Stakeholder direct ministerial control and accountability Sources of income: Should the service be delivered and Public Sector groups. than there would be for other types of public Included in home Dept. estimate. or administered internally within bodies like NDPBs. a ministerial department? Stakeholder Working Groups: Setup & Position In Government: Internally These are internal entities that advise Examples Part of Dept., set up at minister’s discretion, departments on the basis of representation without legislation or separate legal personality. Is this function carried out as a discrete from specific sectors, industries, professions Stakeholder Working Group on Unrecorded project within the Dept. by its staff, or and communities. They comprise a majority Public Rights of Way, and the Purchases Duration: by external staff? of representatives of organisations and Survey External Stakeholder Working Groups Varies, though usually less than three years. Project or taskforce in Dept (generally) not individuals appointed in a personal capacity because of their specific Appointments: Resulting option, dependent on skills and experience. Minister or Dept. official to appoint members function and staffing: (and chair if there is one). Working Group Public Sector Working Groups: These are departmental or inter-departmental Staffing: working groups comprising mainly of civil Civil servants, with external support if required. servants and or wider public servants that advise their departments on specific Accounting: (sometimes cross departmental) issues. Does not produce own, any income In both instances there can be an independent or expenditure included in Dept. accounts. chair and independent members, but the majority must comprise of representatives / ex officios.
19 Chapter 3 | Non-Administratively Classified Government Entities
3.4 Expert Committee
These are usually non-statutory groups, Category Specific Aspects Comparable Characteristics Determinant Factors: providing independent expert advice on key issues from within the department. Like many of Given the similarities in function between Oversight / accountability: Is it necessary for the Government the NDPBs that possess an advisory function, Expert Committees and NDPBs with advisory Dept. usually sets strategic framework, to provide the service or function? Expert Committees comprise of external (non- functions, the Cabinet Office has developed advice is impartial and apolitical, with Yes civil service) specialists that form committees six ‘indicators’ that can be used to help minister accountable to Parliament. to advise ministers on particular policy areas. differentiate between these two advisory Should the service be delivered However, they are not ALBs like NDPBs. They entities. The indicators can be found in full Sources of income: or administered internally within are funded from within a department budget, at Annex C. They include: risk mitigation Included in home Dept. estimate. a ministerial department? administrated and resourced by civil servants (covering risks to the advisory process); Internally from within the department, and are not subject frequency and volume of the advice provided; Setup & Position In Government: to the same levels of review or scrutiny that size of committee and secretariat; duration; Independent of, but established by and seated Is this function carried out as a discrete ALBs require. and whether or not the body has a statutory within Dept. without separate legal personality. project within the Dept. by its staff, or framework. by external staff? It is important to note however that they and Duration: Attached to Dept. though separate the advice they provide are still politically and Examples Varies, though usually permanent. operationally independent. Where there is Resulting option, dependent on political or operational control exercised over Expert Committee on Pesticides, and Appointments: function and staffing: advisers, the expert committee format is the Workplace Health Expert Committee. Flexibility for Minister or Dept. officials to Expert Committee unlikely to be appropriate. In such instances appoint members (and chair if there is one). Departments might instead consider establishing an internal department advisory Staffing: team, taskforce or office, or merely engaging Independent external experts, supported by external consultants on a specific contract. civil servants.
Accounting: Does not produce own, any income or expenditure included in Dept. accounts.
20 Chapter 3 | Non-Administratively Classified Government Entities
3.5 Statutory Office Holder
A statutory office is a position established Examples Comparable Characteristics Determinant Factors: under legislation (in some instances by a prerogative Order in Council) and sometimes The CIC Regulator, Commissioner for Public Oversight/accountability: Is it necessary for the Government as a separate legal entity or corporation sole, Appointments. If part of Dept., acts apolitically, with minister to provide the service or function? with a specific remit to conduct activities or accountable to Parliament. If independent of Yes deliver services within the public sector but Dept., reports directly to Parliament. which is an individual and not an organisation. Should the service be delivered The statutory office is a position held by one Sources of income: or administered internally within person, the statutory office holder, though Depending on who establishes, may be via a ministerial department? the office may be provided powers to request grant in aid, or exceptionally own estimate. Internally additional resources if required (these would usually be provided by a department or by Setup & Position In Government: Is this function carried out as a discrete Parliament) or to employ staff. Set up either by legislation or prerogative, project within the Dept. by its staff, or to work on behalf of the Crown or not, as by external staff? Category Specific Aspects appropriate. Can have separate legal Attached to Dept. though separate personality as a corporation sole. They can be set up by a ministerial department Resulting option, dependent on or on Parliament’s behalf. When examining Duration: function and staffing: the governance arrangements of a statutory Varies, though usually permanent. Statutory Office Holder office consideration needs to be given to the individual elements of its legislative framework. Appointments: Minister appoints Office Holder.
Staffing: Sole Office Holder (public servant), can be supported by civil servants on Dept. loan or have powers to employ staff.
Accounting: Produces own accounts.
21 Chapter 3 | Non-Administratively Classified Government Entities
3.6 Department Specific Public Bodies
The Departments for Health and the Ministries 3.6.1 Department of Health: 3.6.2 Ministry Of Justice & Determinant Factors: of Justice and Defence each have their own Special Health Authorities Ministry Of Defence: IMBS sub-classification for two specific types of Is it necessary for the Government public body. Due to the National Accounts These are a form of NHS Trust and are Independent Monitoring Boards have already to provide the service or function? classification, existing legislative requirements administrated by NHS England (itself a been discussed in Chapter 2. These are Yes and the nature of the functions or services NDPB of the Department of Health). These currently administratively classified as NDPBs, that they carry out they are viewed as distinct public bodies deliver services on behalf of the but are very much department specific and Should the service be delivered public bodies, and not merely offices within NHS. They are established by an order of the do not share all of the same comparable or administered internally within a Department. However, the functions they Secretary of State under the National Health characteristics of the NDPB category. As such a ministerial department? provide and overall governance structures are Service Act 2006 and have national rather they can be viewed as Department specific Internally incompatible with the main categories of ALB, than regional effect. The Secretary of State public entities, as well as NDPBs. precluding them from regular administrative exercises ministerial control over their activities, Is this function carried out as a discrete classification. As they are highly specialised though funding is from Parliament not grant project within the Dept. by its staff, or they are classified as Department specific in aid. They are bodies corporate, with a by external staff? public bodies. It is important to note that this board, and are staffed by public servants. Attached to Dept. though separate is not the preferred model, and is reserved for This form is most appropriate for handling only the choices listed in this Chapter. When large operational activities relating to the NHS. Resulting option, dependent on establishing any new Department specific function and staffing: public body, consideration should be given to Examples Specific Public Bodies whether the function or service to be provided could be carried out by an existing entity rather NHS Trust Development Authority, NHS Blood than having to establish a new one. and Transplant
22 Chapter Four
Non-Administratively Classified Parliamentary Entities
23 Chapter 4 | Non-Administratively Classified Parliamentary Entities
4.1 Parliament 4.2 Parliamentary Bodies Comparable Characteristics
Also known as the ‘Legislature’, Parliament is Parliament and Public Bodies These are public bodies set up by, and Oversight / accountability: made up of three central elements: the House usually reporting directly to, Parliament Usually sets own policy and directly of Commons, the House of Lords and the Parliament impacts on the wider public (typically via one of its Committees) and not accountable to parliament. Monarchy. The majority of its business occurs bodies landscape in different ways. Primarily to a government department or minister. in the two Houses. It is the highest legislative it examines and challenges the work of the They often deliver functions or services that Sources of income: authority in the UK, scrutinising the work of government through questioning ministers, are viewed as of particular importance to Usually has own estimate. the government and examining, debating and debating and committee work. Part of Parliament, or requiring even greater distance approving new laws. Parliament also holds this scrutiny covers the activities of the from ministerial control. They are often set Setup and Position In Government: the power to set certain taxes and debate government’s public bodies (as can be seen up with similar structures and powers as Usually established by legislation with separate the important issues of the day. in the Accountability characteristic covered in other public bodies, though their governance legal personality. Not part of the executive. Chapters 2 and 3). processes are usually more focussed on Government political independence and accountability Duration: In some instances parliamentary bodies to Parliament. Usually they will be staffed by Varies, though usually permanent. The Prime Minister and Ministers (who head have been set up to assist in scrutinising the public servants, with senior appointments departments) that make up the government government, these report directly to Parliament made by or with Parliamentary involvement Appointments: are themselves drawn from Parliament. While (often via Parliamentary Committees). or oversight. Statutory Office Holders can be Usually headed by statutory board, appointed government and Parliament work closely established as parliamentary bodies as well by parliament. together, they are separate institutions with Parliament also impacts on the funding of as by departments (see Chapter 3). separate functions. Also known as the certain public bodies through its powers to Staffing: ‘Executive’, the government has responsibility check and approve Government spending. Examples Public servants, though can be supported by for developing and implementing policy and Specifically this covers departmental estimates civil servants on Dept. loan. for drafting laws. (the public money that Parliament votes to National Audit Office, Independent each department from the exchequer) which Parliamentary Standards Authority Accounting: in turn funds many public bodies, and own Produces own accounts. estimate (voted directly from the exchequer) that funds certain public bodies such as NMDs.
24 Chapter Five
Non-Administratively Classified Local Government Entities & Devolved Administration Entities
25 Chapter 5 | Non-Administratively Classified LG & DA Entities
This chapter will focus on local government 5.1 Local Government Exceptions and devolved administrations’ public entities. In order to address these, it is useful to It is worth noting there are some central first look at their treatment under the ONS The sectoral classification includes public Category Specific Aspects government bodies that cover local National Accounts (Sectoral) system of entities that are funded and administered government issues, however, as they have classification. As outlined in the Introduction, by local government and not central Local government public bodies vary widely UK-wide effect, they are not classified to ONS sectorally classifies public entities into government. in terms of size, duration, function and local government. three categories: ‘Central Government’, governance structure. ‘Local Government’ and ‘Public Corporations’. Local government make and carry out Public corporations will be covered in Chapter decisions on local services. Many parts of Their funding will usually come from the 6. Local government will be addressed next England have two tiers of local government: local government that has established and and then the devolved administrations in county councils and district, borough or sponsors them, however, in some instances Scotland, Wales and Northern Ireland (which city councils. In some parts of the country, they may also raise commercial funding, and are classified to Central Government). there’s just one tier providing all the functions, apply for central government grants. known as ‘unitary authorities’, (including Central Government covers all administrative cities, boroughs or county councils). As departments of the State and other central well as these, many areas also have parish Examples agencies whose effect extends over the or town councils. whole economic territory (in this case the Age Concern Wiltshire, Colchester Port, whole of the UK). Some of these have these have established Transport for London. their own public bodies: non-profit institutions Local government is defined in terms of the controlled by local government and whose role an entity has over only a local (static and competence is restricted to the economic geographically defined) part of the economic territories of the local government. territory. These are out of scope for this document, but are included here for completeness and to provide a better understanding of the wider public bodies landscape.
26 Chapter 5 | Non-Administratively Classified LG & DA Entities
5.2 Devolved Administrations Exceptions
There are public bodies that have UK wide Devolution in the UK created the Scottish Sectoral Classification These devolved public bodies are out of effect carrying out functions on reserved Parliament, National Assembly for Wales and scope for this document, but are included matters only, they are administrated by their Northern Ireland Assembly. Varying levels The underpinning EU legislation on sectoral here for completeness and to provide a sponsor departments in the UK Government. of power have been transferred from the classification differentiates between better understanding of the wider public UK Parliament to the devolved legislatures. different forms of federal and state level bodies landscape. There are cross-border public bodies that government. However, the UK’s system have UK wide effect carrying out (at least Devolved & Reserved Powers of devolved administration does not have Category Specific Aspects some) functions on matters that have been the characteristics of a ‘federal’ system of devolved in whole or in part. Whilst these are Devolved powers are those that were government. Also, as there is no comparable The public bodies that are created by the administrated by their home UK departments, previously exercised by the UK Parliament devolved assembly or devolution of powers devolved administrations should only have there will be occasions when they must but are now exercised by the devolved in England, the countries within the UK do scope over the specific geographical area consult with the devolved administrations. legislatures. These powers cover many not have the characteristics of separate of their devolved administration. Also any reports or legislative instruments domestic policy issues, which are exercised ‘states’ as the largest areas into which the relating to the cross-border public bodies through specific law-making powers, for country can be politically or administratively They will vary in size, duration, function that will be laid before the UK Parliament areas that include: education, culture, divided. As such the ONS has determined and governance structure. Their funding will also be laid before the affected devolved transport, the environment and health. that the devolved administrations fall within will come primarily from their sponsoring administration. the Central Government classification. devolved administration, though in some Some powers have been specifically instances they may also raise commercial The Northern Ireland and Scotland Offices reserved to the UK Parliament. These include, Devolved Administrations’ funding, and apply for central government (departments of the UK Government) have amongst others, defence and foreign policy. Public Bodies grants. their own ALBs which are not part of the devolved administrations. The legislation establishing each devolved As a result of the devolved administrations Some of these public bodies will have mixed administration determines which powers are being sectorally classified to central functions – functions that relate to reserved devolved or reserved. government, their public bodies can matters and some which do not. An example (and generally tend to) follow similar of such a body with mixed functions is a categorisations to those covered within Scottish local authority. Chapters 2 and 3. However, as the powers to establish public bodies in devolved Examples areas has been transferred to the devolved administrations, their ultimate form and Scottish Further Education Unit, Belfast governance structures will be determined Health and Social Care Trust, Sports Council by the devolved administrations themselves. for Wales. 27 Chapter Six
Public Corporations
28 Chapter 6 | Public Corporations
6.1 ONS Sectoral 6.2 Trading Funds Classification
As discussed in the Introduction, in the UK on the amounts of products that producers Trading Funds were established by meeting Existing ALB trading funds will be reviewed the ONS operates the system of National are willing to supply and on the amounts of the criteria within the Government Trading by their departments in the ordinary Accounts (or sectoral) classification, products that purchasers wish to acquire) for Funds Act 1973, and only occurred when over course of business. With each review also which is based on the European System all or most of the goods and services they 50 per cent of the body’s revenue consisted examining whether trading fund status is of Accounts 1995 (which implements produce. Some charge for regulatory activities, of receipts in respect of goods and services still required given actual business practices, the United Nations System of National where these provide a significant benefit to the provided by the Trading Fund. They also and any viable alternative models should Accounts 1993). This sectoral classification person paying the fee, for example through needed to satisfy the sponsor department’s be considered. Where Trading Fund status allows Member States to develop an quality testing; and minister and HM Treasury that establishing the has been reviewed and is still required, no integrated, complete system of accounts fund would lead to improved efficiency and changes to classification need to be made. that can be used to establish (and compare) It is controlled by central government, local effectiveness in management of operations. significant economic activity. government or other public corporations; and Trading funds are sectorally classified as public The ONS categorises various entities that are It has substantial day to day operating corporations. In future ALBs that should subject to government control, these being independence so that it should be seen as operate commercially will instead consider central government entities, local government an institutional unit separate from its parent other commercial models and not apply for entities and public corporations. The ONS department. trading fund status. This will not preclude other determines which public bodies are public non-ALB Trading Funds from being created, corporations and the criteria they adopt This mainly covers trading bodies, that either but will avoid the discrepancy over governance has the potential to impact on any of the operate commercially or recover some or all that occurs when an administratively classified administratively classified ALBs, and even of their costs from fees charged to customers. ALB (especially EAs that are part of the Crown) Local Government public bodies and Devolved This category of sectoral classification normally are treated as public corporations due to their Administration’s public bodies. only applies where 50 per cent or more of Trading Fund status. Specifically this covers costs are met from such outside income. The HM Treasury’s treatment of such bodies for A body will be classified as a public 50 per cent criterion should be applied by budgetary and accountancy purposes against corporation where: looking over a range of years to avoid frequent the administrative controls that Cabinet Office reclassifications through minor fluctuations in apply (for example) to EAs on the basis that It is classified as a market body – a body one year which are not repeated or expected they are part of a ministerial department and that derives more than 50 per cent of its to be repeated in the future. staffed by civil servants. production cost from the sale of goods or services at economically significant prices (that is, prices that have a substantial influence
29 Chapter Seven
Ongoing Classification Issues
30 Chapter 7 | Ongoing Classification Issues
7.1 Multi-Classified ALBs 7.2 Unclassified ALBs
There are a few ALBs that hold more than one There are various public bodies that, while Awaiting ONS National Genuinely Unique form of administrative classification, which sharing many attributes and characteristics Accounts Classification & Unclassifiable may lead to confusion over which governance with ALBs, are currently unclassified within structure or funding model is most appropriate. the administrative system. Also they clearly Some currently unclassified ALBs may be It is possible that for reasons associated with The most common examples are NMDs that do not fall within the other categories of awaiting National Accounts classification, which function or services, there may be a small are also EAs. These are NMDs that were set non-administratively classified: government, will have a direct impact on any administrative number of ALBs that cannot be classified into up along the EA model, possibly as that was parliamentary, local government or devolved classification. Departments will be encouraged one of the main categories without adversely seen as a useful structure to adopt and / or as administration entities. In such instances to notify the Public Bodies Reform Team and impacting on the body’s ability to fulfil of those a means of applying for Trading Fund status. these public bodies should be subject HM Treasury to advise on how classification functions / deliver those services. Departments to departmental review with the aim of should be addressed in the interim (while should contact the Public Bodies Reform Policy on Multiple Classified ALBs administratively classifying them wherever awaiting the outcome of the ONS). Once Team to work with them to identify any viable possible, however, there may be limited National Accounts classification has been alternative delivery models, and hopefully to No new multi-classified ALBs should be circumstances in which formal classification determined, administrative classification should ensure correct administrative classification established. Existing multi-classified ALBs may not be possible or desirable. These are follow where it is appropriate to do so. can take place wherever possible. If this is not will be reviewed by their departments in the dependent on the following criteria: possible, then such unique and unclassifiable ordinary course of business, however, each Awaiting Significant entities will be allowed to remain administratively review will examine if they still require more Small & Temporary Structural Change unclassified, in exceptional circumstances, so than one classification given actual business long as they have appropriate governance and practices and if it causes any governance Small and temporary public bodies can Some currently unclassified ALBs may accountability structures in place. or funding problems. Adopting a single or be set up to address a specific concern or be awaiting modification to their structure alternative model will only be considered issue. These will have a set end date, which or governance which would impact on where it is appropriate to do so and does is usually so soon after creation that formal administrative classification. In such cases, not significantly and adversely impact on the classification would be a disproportionate and it would be practical to await the outcome ALB’s ability to fulfil its functions. costly exercise that would not result in any of the changes before formal classification, clear benefit. Such bodies would still need to though Departments will be encouraged to show an appropriate governance structure, notify the Public Bodies Reform Team to advise and lines of accountability. on how classification should be addressed in the interim.
31 Chapter 7 | Ongoing Classification Issues
7.3 Legal Form
There has been a general misconception framework for certain types of public body, that companies (that are owned by the as well as other private sector organisations government) and ALBs are alternatives to that are not in government. In addition to this one another. This is incorrect as the two are are terms such as ‘GovCo’ which refers to not mutually exclusive, indeed some public companies that the government owns, and bodies are incorporated as companies. These ‘GOCOs’ which are companies owned by the descriptors refer to different attributes of an government but operated by non-government organisation. ‘Arm’s length body’ or ‘public contractors. Neither these terms, nor the other body’ signifies that government controls the forms of incorporation are mutually exclusive general corporate policy of the organisation, with ALBs. while ‘company’ signifies that it is incorporated under and is subject to the Companies Act Other concerns have been raised suggesting 2006. The government provides guidance for that government ownership of companies is departments about public bodies (including new and novel, and that companies are less set-up, governance, financial management and transparent and accountable than other sorts sponsorship), which applies equally to those of arm’s length body. Successive governments public bodies that are companies as to those have owned a wide range of companies that are not. Additionally, the Companies Act throughout the post-war period for a variety 2006, Companies House and HM Treasury’s of reasons - it is not a new phenomenon. Also Managing Public Money guidance all provide companies are not inherently less transparent departments guidance on establishing and and accountable than other sorts of public working with companies. body. Each has its own particular arrangements so it is difficult to generalise, however, they There are also other methods of incorporation, are obliged to file annual accounts and other which have sometimes led to confusion. These information at Companies House which is free include ‘Royal Charter bodies’, ‘statutory for anyone to view. Indeed if these companies corporations’, and ‘corporations sole’. are administratively classified, the governance These are merely means of incorporating structures that apply to ALBs will still apply. an organisation or group of individuals, and each have their place within providing a legal
32 Annex A
Options Within The Comparable Characteristics
33 Annex A | Options Within The Comparable Characteristics
As discussed in the Introduction, this annex
lists each of the comparable characteristics A.1 Oversight & Accountability Accountability options include: of the main categories of public bodies. Included are the options for each, these This covers the level of ministerial oversight The entity is directly accountable to will help develop the unique combination of over the operational, strategic and policy officials within ministerial department; characteristics that define and differentiate functions of the public entity; and it covers minister in turn accountable to Parliament. the main categories. the line of accounting, whether that is to a ministerial department or directly to The entity is directly accountable to the Parliament. minister or secretary of state, minister in turn accountable to Parliament. Oversight options include: The entity is not sponsored by a ministerial Ministerial departmental control over department, though a nominated minister strategy, policy and / or operations. or secretary of state will be accountable for that public body to Parliament. Public body alignment with ministerial department’s strategy and / or policy, The entity is directly accountable but greater operational freedom for to Parliament. public body. The entity is not accountable to Public body alignment with ministerial Parliament or to a ministerial department department strategy, but greater policy (though possibly accountable to and operational freedom. shareholders, or members, or via a specific contractual obligation). Greater independence for public body and freedom from ministerial department strategy.
34 Annex A | Options Within The Comparable Characteristics
A.2 Sources of funding
Where does the public entity obtain its funds, Direct Taxation – is where the provision Charitable Donations & Bequeathments – Levy Funding – is where customers / users and what can it do with those funds. Some or delivery of services or functions is taxed, is where a public body obtains funding from are charged a fee for the specific service public entities may have multiple sources usually with the recipient / customers or even donations made by registered charities, or or function provided, but where they have of funding. beneficiaries making the payment. Often where the public body is registered as a no private sector commercial / market there is a legal or regulatory requirement charity and it receives donations from any alternatives. This lack of market forces Options include: for the tax to be paid, with failure or refusal source though it must be donated for a defines this as a levy rather than trading leading to possible legal sanctions. Direct specific charitable purpose. income or a fee for a service. Although Direct Funding from Department (Supply taxation may be charged for a specific some customers may have the option not Estimate) – occurs when a sponsoring or service or function, but usually any taxes Own Estimate – is where parliament to use the service or function, levies can home department funds the public body raised will be paid to HMRC (as the primary votes for the public body to receive funding be imposed on a particular sector or class directly from its own departmental estimate tax authority within the UK) and not used directly from the exchequer and not from a (eg via compulsory licensing). Levies are (the public money that Parliament votes to by the public body directly. department’s estimate. classified as taxation and go either to the each department from the exchequer). This exchequer or are retained to fund a specific system of funding is indicative of significant Commercial Funding – is where a body Grant in Aid – this is where a sponsoring service or function. departmental control over the public body charges its users a commercial rate for or home department funds the public body (usually for bodies that are not separate legal the service or function provided, where directly from its own departmental estimate, Fees and Charges - are where users of entities and are part of their department). the service is discretionary and customers but is specifically delivered as a discrete government services have to pay a fee or have private sector commercial / market funding package delivered to a public body charge to receive that service, for example Grant – Payments made by departments alternatives. This open competition means for the financing of a range of activities a driving licence, instead of the service to outside bodies to reimburse expenditure that there is no government monopoly that the public body chooses within broad being funded through taxation. They are on agreed items or functions, and often and the trading income received is truly parameters agreed with the department. usually set on a full cost-recovery basis and paid only on statutory conditions. This is commercial in nature and not a fee for a These are regular payments by departments require legislation to authorise them. Unlike where a sponsoring or home department service or a levy. to outside bodies (usually NDPBs) to finance levies, they are not compulsory in nature. funds the public body directly from its own their operating expenditure. departmental estimate, but is delivered as a Commercial Loans – is generally not an discrete funding package for the financing of available option for most public bodies, as Loans from department – are financial a narrowly defined, specific and agreed (with it causes a debt obligation to a non-public packages that are repayable to the the department) activity - to be conducted entity. department and made on specific terms. by a public body. These “voted loans” normally require legislation to authorise them.
35 Annex A | Options Within The Comparable Characteristics
A.3 Position within A.4 Appointment Government & process & Management for setting up
Where does the public entity sit within the Process for setting up, How the public entity is managed and how Appoint options range from wider government, and how is it established options include: that management structure is appointed: the following options: (public entities can possess more than one of the options listed as they are not all mutually Established by Department – Management options can be divided Executive appoints exclusive): set up by ministerial fiat into executive and non-executive functions, and include: Non-executive appoints Position within government, Established by Parliament – options include: set up by Parliament Chief Executive Department official on behalf of Minister appoints Parliamentary – created by, directly Statute – Non-Executive Board and Chair funded by and responsible to Parliament set up and operates under legislation (can be statutory) Direct ministerial appointment
Separate from but supported by Separate Legal Personality – Government Officials / Senior Civil Servant Civil Service Commissioners appoint Department – receives staff on loan distinct from the Crown Department official on behalf of (usually as secretariat) Committee members (usually of specialists) Crown appoints
Separate from but sponsored by Parliament appoints Department – only sponsored by minister Committee members elect / appoint
Part of Department – Members elect / appoint sits within ministerial department
Department – part of and set up by Government
Independent – no direct connection to Government, usually for certain types of public corporation
36 Annex A | Options Within The Comparable Characteristics
A.5 Status of Staff A.6 Financial Accounts
Civil Servants – are staff employed by Contractors – Generally contractors are Private Sector Employees – are staff The treatment of financial accounts can be the Crown (appointed by departments or either self-employed or employed by a third employed on contracts with employers influenced by the relationship to funding. executive agencies). Their roles, grades party, then contracted for specific services outside of the public sector. Their terms and salaries are broadly comparable and by the public body or department. This and conditions may be different to public Options include: whilst they usually work for one specific includes specialists hired under consultancy sector employees as their employer will have department or agency, they are able to agreements to perform specific tasks or more freedom in relation to the employment Produces and publishes own apply for postings across most other areas functions. Contractors are usually hired for terms which it can offer its staff. This is not accounts – these are not reflected elsewhere of government. a limited term in order to fulfil a particular an option for public bodies, but may be (ie within sponsoring department’s accounts) business need. .If there is a need for long- appropriate for some public corporations. The provisions governing a civil servant’s term hires then alternative models should Produces own accounts – may publish employment relationship are influenced by be considered. Others – unusually there may be other as well, but these are consolidated within civil-service specific rules and parameters. types of staff (such as volunteers), however, department’s accounts. For some small public bodies their home Secondees – staff on temporary loan from the options listed above are the principle departments may loan a number of civil other employers to the public body, on set choices for staffing. Does not produce own accounts – any servants to work for that public body, secondments. Their secondments may vary income and expenditure is part of home though their contract of employment is the terms of their regular employment in department’s accounts still with the Crown as appointed by the relation to their role, grade and salary for the home department. All are subject to the duration of the secondment, and payment Civil Service Code of Conduct. may come from their original employer or the public body currently hosting them. Public Servants – are staff employed by Secondees are usually subject to many public bodies that are usually not part of the (but not always all) of the same policies Crown. There is some variation between and procedures which apply to the public the roles, grades and salaries that public body’s regular staff. servants have, as they are usually contracted more closely to a specific public body and not to a wider service as is the case with civil servants. They are however still public sector employees and usually subject to the body’s own code of conduct where applicable.
37 Annex B
Table Comparing Characteristics
38 Annex B | Table Comparing Characteristics
The following table illustrates the differences between the categories of public bodies dependent on their comparable characteristics
Entity Relationship To Department Income / Funding Establishment Senior Staffing Issues & Structure Status of Staff Financial Accounting Accountability Oversight Position Setup Duration Management Appointments
Executive Agency Minister Dept. Included In Part Of Dept. By Dept. Can be Permanent CEO, & Minister appoints Civil Servants Produce own, accountable sets policy Dept. Estimate No separate with legislation Non-Exec Chair CEO & Chair Consolidated within legal personality Dept.
Non Departmental Minister Dept. Usually sets From Dept. Has separate By Dept. Various At least CEO, & Minister appoints Public Servants Produce own, Public Body accountable strategic framework Usually via legal personality forms. three years Non-Exec Chair Chair & Non-Exec Consolidated within grant In aid Board, consulted Dept. on CEO
NDPB with Minister Dept. Usually sets Included In Within Dept. but Independent At least Committee of Minister appoints Independent Do not produce Advisory Function accountable strategic framework Dept. Estimate no separate legal of but established three years independent members. Specialists own, Covered advice Is impartial personality by Dept. experts.(can have (Supported By CS) within Dept. and apolitical. Chair)
Independent Minister Dept. usually sets Included In Independent On creation of new Depends Board members Secretary Of State Unpaid volunteers Do not produce Monitoring Board accountable strategic framework Dept. Estimate to Dept. but no prison or detention on prison or appoints members own, Covered separate legal centre detention centre within Dept. personality
Non Ministerial Minister usually Sets own policy, Usually from own Usually As Dept. By Prime Minister Permanent CEO & Minister usually Civil Servants Produces own Department accountable Dept. can set Estimate with separate legal Non-Exec Chair appoints Board, accounts strategic framework personality with Parlt. scrutiny
Office of Minister Part Of Dept. Sets Included In Dept. Part Of Dept. No By Dept. Varies, usually less Usually Dept. Minister appoints Civil Servants Do not produce Department accountable own policy Estimate separate legal than three years official as head Head (and Board if own, Covered personality there is one) within Dept.
Working Minister Part Of Dept. Sets Included In Dept. Part Of Dept. No Established by Varies, usually less Usually members Minister or official Civil Servants Do not produce Group accountable own policy Estimate separate legal Dept. than three years and Chair appoints members (supported by own, Covered personality and Chair external Non-CS) within Dept.
Expert Committee Minister Dept. usually sets Included In Dept. Within Dept. no Independent of but Varies, usually Committee of Minister or Dept. Independent Do not produce accountable strategic framework. Estimate separate legal established by Dept. permanent experts (Can Have Officials appoint Specialists own, Covered Advice is impartial personality Chair) members (and (Supported By CS) within Dept. and apolitical. Chair)
Statutory Minister Part of Dept. acts From Dept. via Independent with By Dept. via Varies, usually Office Holder Minister Or Dept. Public Servant Produces own Office Holder accountable apolitically grant In aid separate legal legislation permanent Officials appoint (Supported By CS) accounts (Departmental) personality Office Holder
Statutory Office Office Sets own policy From own Estimate Independent with By Parliament, via Varies, usually Office Holder Parliament appoints Public Servant Produces own Holder Holder directly separate legal legislation permanent Office Holder accounts (Parliamentary) accountable personality
Parliamentary Usually directly Sets own policy. Usually from Independent with Established by Varies, usually Usually by Parliament appoints Public Servants Produces own Body accountable own Estimate separate legal Parliament permanent statutory board accounts personality
39 Annex C
Expert Committees & NDPBs With Advisory Functions
40 Annex C | Expert Committees And NDPBs With Advisory Functions
C.1 Comparative Indicators * To be aware, these Feature Indicative of NDPB with advisory functions* Indicative of Expert Committee* features are only Typically high frequency and volume of advice. Typically lower frequency and volume of advice. Frequency and volume indicative of which Constant requests and responses. Possibly periods of committee inactivity. (of advice provided) classification may Risk Mitigation Where there is a significant reputational or operational risk to the process of Where there is a reduced/negligible reputational or operational risk be suitable. commissioning, developing or using the advice, due to the perception of a loss to the advice associated with its commissioning, development of independence (from a supposed increased likelihood of interference from or use. (This does not cover or negate the risk of not appointing ** If the committee has home departments). Specifically where there is a clear break between the advice independent experts) provided and any subsequent policy development. between 5 and 10 members, the other This could be determined by examining whether or not Parliament would be likely features should be relied to scrutinise the advice provided or process of commissioning that advice. upon to indicate which Size of committee** Where there could be more than 5 committee members standing at any given time. Where fewer than 10 committee members could be required category may to be standing at any given time. be suitable. Where more than one committee member is needed to cover the same issue under scrutiny, and / or individual members cannot cover multiple issues (due to specialist Where only a single committee member is required to cover each issue *** If the secretariat has skills required for each issue). under scrutiny and / or multiple discrete issues can be resolved by a single committee member. between 2 and 5 staff / secretariat, the other Also where any number of temporary committee members can be features should be relied appointed on an ad hoc basis, for specific projects / commissions. upon to indicate which Duration The body must be active for at least three years. There is no time limit on duration, allowing for shorter terms where category may appropriate / desirable, though usually Expert Committees tend be suitable. to be permanent.
Size of the secretariat*** Generally where the secretariat could be greater than 2 FTEs. Where the ANDPB’s staff Generally where the secretariat is usually fewer than 5 FTEs. Where the / secretariat do more than administration – for example, if they are involved in research, Expert Committee does not require additional staff to conduct research, analysis or policy development. Noting, that if additional staff are required to conduct analysis or policy development (such activities can be carried out by the delivery (eg investigation work), then perhaps regular NDPB might be a better model – home department). such as the HSE.
Statutory framework There can be underlying legislation. This will be especially evident if the legislation Typically (though not always) there is no underlying legislation. requires advice that could only be provided by a body with the characteristics of Alternatively, where there is legislation, it will not require advice that an ANDPB. No separate legal personality. could only be provided by a body with the characteristics of an ANDPB. No separate legal personality.
41 Annex C | Expert Committees And NDPBs With Advisory Functions
C.2 Impact On Governance
Feature Impact on NDPB with advisory functions Impact on Expert Committee Establishment Set up as a NDPB – therefore follows relevant Cabinet Office guidance. Set up as Expert Committee – does not need to follow guidance on establishing NDPBs (CO collects name and information on its advisory function)
Reviews As an NDPB will be subject to a regular (at least once in each Not subject to a regular formal review (though departments can Parliamentary cycle) Tailored Review process. still review as they see fit).
Commissions As an NDPB will be subject to CO commissions for public bodies data As an expert committee is unlikely to be included in CO commissions for public bodies data.
Governance Will require a Framework Document / Memorandum of Understanding Does not require (though can still have) a Framework Document or MOU; will still Documentation and a Terms of Reference document. require a Terms of Reference document. Board Structure of Board flexible (may not be required). Structure of Board flexible (usually not required). Appointments Appointments by Minister (OCPA principles applying) Ministerial/Departmental appointments (details to be agreed with CO Public Appointments Team on a case by case basis – where reclassifying from an existing NDPB with advisory function)
Relationship Committee members are independent of home department. Committee members are independent of home department. Expertise The best suited candidates are chosen as Committee members to The best suited candidates are chosen as Committee members to provide advice in the field required. provide advice in the field required.
Evidence / Advice High quality, impartial (and where needed) and expert advice, based on High quality, impartial (and where needed) and expert advice, based on relevant evidence. relevant evidence.
Transparency / NDPBs with advisory functions are encouraged to be as open as Expert Committees are encouraged to be as open as possible Openness possible on process and methodology, and where approriate fully on process and methodology, and fully transparent on advice. transparent on advice.
42