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Public Bodies Chloe Smith BRIEFING PAPER Number CBP 8376, 19 January 2021 By Hazel Armstrong Public Bodies Chloe Smith Contents: 1. What is a public body? 2. Accountability and scrutiny 3. The number and cost of public bodies 4. Establishing new public bodies 5. Brexit and public bodies 6. Public body review process 7. A short history of public bodies pre 2016 www.parliament.uk/commons-library | intranet.parliament.uk/commons-library | [email protected] | @commonslibrary 2 Public Bodies Contents Summary 3 1. What is a public body? 4 1.1 Public bodies 4 1.2 Classification of public bodies 4 2. Accountability and scrutiny 7 2.1 Introduction 7 2.2 Scrutiny by select committees 7 2.3 Appointments 7 3. The number and cost of public bodies 10 4. Establishing new public bodies 12 4.1 General policy 12 5. Brexit and public bodies 13 5.1 New public bodies after Brexit 14 Office for Environmental Protection 14 Trade Remedies Authority 15 Independent Monitoring Authority 16 Office for the Internal Market 16 6. Public body review process 17 6.1 Tailored reviews 17 6.2 Functional reviews 18 6.3 Triennial reviews 18 7. A short history of public bodies pre 2016 20 7.1 Background 20 7.2 Coalition Government, 2010-15 21 Contributing Authors: Lorna Booth, Section 3 Cover page image copyright-Attributed to: Old Queen Street by Philafrenzy. Licensed under CC BY-SA 4.0 / image cropped. Attributed to: Photograph of The National Archives by Nick Cooper. Licensed under CC BY-SA 2.5 / image cropped. Attributed to: Forestry Commission sign outside Snape Wood in Wadhurst, East Sussex by Tom Morris. Licensed under CC BY-SA 3.0 / image cropped. 3 Commons Library Briefing, 19 January 2021 Summary As of March 2019, 295 public bodies were in operation across the UK government1. Most public bodies within the United Kingdom are established and operated by the government, with varying levels of autonomy and ministerial responsibility according to their classification. Concern over the accountability of public bodies and over arrangements for appointments to them, made by ministers, have arisen previously. The role of Westminster Select Committees in such scrutiny has, at times, become a source of debate between Parliament and Governments. Brexit means that many functions previously carried out by EU agencies will become the responsibility of existing UK bodies. A number of new public bodies are also being created to manage additional responsibilities after EU exit: for example, an Office for Environmental Protection will be established under the Environment Bill 2019-21 and a Trade Remedies Authority under the Trade Bill 2019-20. The Conservative-Liberal Democrat Coalition Government (2010-15) undertook reform of public bodies, significantly reducing the number in operation. The Coalition Government also established ‘triennial reviews’, a regular review process for public bodies, which was replaced in 2016 by ‘tailored reviews’, to be carried out once every Parliament to assess the continuing need and function of bodies. Some of the bodies mentioned in this paper have UK-wide responsibilities, some only relate to England. Public bodies reporting to the devolved governments in Scotland, Wales and Northern Ireland are not included in the statistics given nor the procedures quoted. 1 Public Bodies 2019, Cabinet Office, July 2020. 4 Public Bodies 1. What is a public body? 1.1 Public bodies The Cabinet Office defines a public body as follows: A ‘public body’ is a formally established organisation that is (at least in part) publically funded to deliver a public or government service, though not as a ministerial department. The term refers to a wide range of entities that are within the public sector. This does not include public entities that do not require staff to carry out their functions, such as public funds or trusts.2 The ‘arm’s length’ nature of public bodies means that their day-to-day decision making is independent of government, although ministers are ultimately responsible to Parliament for their independence, effectiveness and efficiency. Most public bodies that operate within the UK are established and operated by the Government. Some, such as the Parliamentary and Health Service Ombudsman, are set up by and directly accountable to Parliament. 1.2 Classification of public bodies In April 2016 the Government published the outcome of a classification review, prompted by concerns raised by academics and the 2014 Public Administration Select Committee report Who's accountable? Relationships between Government and arm's-length bodies. PASC had previously reported on the “confusing network of public bodies” in a 1999 report and again in 2011 referred to the “complex and confusing nature of the public bodies landscape”.3 The 2016 review found that “there was broad agreement that the current classification system was not fit for purpose – it lacked clarity, was unnecessarily complex and was difficult to understand”. 4 Among the recommendations made in the report were the following: • Reduce the number of types of central government Arm’s Length Bodies (ALBs) to the three main categories – Executive Agencies, Non Departmental Public Bodies and Non Ministerial Departments • Attribute to the three categories characteristics which are comparable, mutually exclusive and comprehensively cover the central government ALB landscape • Introduce naming conventions which are aligned with the categories 2 Cabinet Office, Public Bodies Handbook: Part 1 – Classification of Public Bodies: Guidance for Departments, April 2016. 3 Public Administration Select Committee, Quangos, 9 November 1999, HC 209 HC 209 1998-99; Public Administration Select Committee, Mapping the Quango State, 21 March 2001 HC 367 2000-01. 4 Cabinet Office, Classification Review of public bodies, April 2016, p6 5 Commons Library Briefing, 19 January 2021 • Endorse as a guiding principle that the category into which a body is classified should be determined by the degree of freedom that body needs from ministerial control to perform its functions. In April 2016 the Government published guidance for departments on the classification of public bodies.5 The guidance summarises the main characteristics of different types of public bodies and reflects the recommendations of the review. The main types of arm’s length public bodies (ALBs) are6: • Executive Agencies: Executive Agencies are clearly designated (and financially viable) business units within departments which are responsible for undertaking the executive functions of that department, as distinct from giving policy advice…Executive agencies are part of their department, and do not have the same level of legal separation from their home departments that other categories of public bodies often possess. Examples: Public Health England, Education and Skills Funding Agency, Planning Inspectorate • Non Departmental Public Bodies: NDPBs have a role in the process of national government but are not part of a government department. They operate at arm’s length from ministers, though a minister will be responsible to Parliament for each NDPB. Types of NDPBs include: • NDPBs with advisory functions: These NDPBs consist of external (non-civil service) experts who operate in a personal capacity to form boards or committees to advise ministers on particular policy areas. They are often supported by a small secretariat from the sponsoring department, which also provides funding. They provide independent specialist advice (free from political control) to departments. Examples: Advisory Council on the Misuse of Drugs, Boundary Commission for England. • Executive NDPBs: These NDPBs carry out a range of administrative, commercial, executive and regulatory or technical functions. They often have a delegated budget, with their own Accounting Officer and staff who are not civil servants. Examples: Health and Safety Executive, Environment Agency • Tribunal NDPBs: These NDPBs are usually concerned with the rights and obligations of individuals in relation to a branch of government or other public authority. Examples: Traffic Commissioners, The Valuation Tribunal • Non Ministerial Departments: NMDs operate similarly to normal government Departments in the functions they perform (though usually they are more specialised and not as wide ranging 5 Cabinet Office, Public Bodies Handbook: Part 1 – Classification of Public Bodies: Guidance for Departments, April 2016 6 Public Administration Select Committee, Who's accountable? Relationships between Government and arm's-length bodies, HC 110, November 2014 6 Public Bodies in the policy areas they cover). They generally cover matters for which direct political oversight is judged unnecessary or inappropriate. They are usually headed by a senior civil servant as Chief Executive, with an independent Chair and non-executive directors for the board. Examples: HM Revenue & Customs, National Crime Agency, Competition and Markets Authority, Ofqual, Serious Fraud Office. The scale of ALBs varies widely. For example, NHS England is an executive NDPB and accounts for 56% of the gross expenditure of all ALBs. Box 1: What is a quango? The term ‘quango’ (quasi-autonomous non-governmental organisation) is often used as a catch-all term to describe public bodies. The word ‘quango’ is not a classification that the Government has traditionally used. For some, it has become a highly emotive term, used as a by-word for wasteful bureaucracy, patronage and a lack of democratic accountability. 7 Commons Library Briefing, 19 January 2021 2. Accountability and scrutiny 2.1
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