Public Bodies Bill [Lords]

I am most grateful for the opportunity to speak at this stage in the debate. The Bill is significant by any standards and represents the Government's plans to implement their reform of public bodies as a result of the review they carried out in the second half of last year. The Select Committee on Public Administration, which I chair, inquired into the review at the time and published a report last January. Somewhat to my surprise, the report was more controversial than I had anticipated, but I emphasise that it was unanimously agreed by all members of the Committee of all political parties. We expressed concerns at the time about the way the review was conducted, and we have heard some of them in the Chamber this afternoon. We found that the tests determining whether a public body should be retained or reformed were poorly designed and not applied consistently and that Ministers had failed to consult adequately about them. The Government have suggested that they intend to hold triennial reviews of non-departmental public bodies and I urge them to reconsider the tests to see how they can be reviewed. The tests in the Bill are different from the tests applied in the review and I invite the Minister to explain why that is so. As the Minister for the Cabinet Office and Paymaster General pointed out earlier, there are effectively four tests in the review: the first is existential; the second is whether the body concerned carries out a highly technical activity; the third is whether it is required to be impartial; and the fourth is whether it needs to act independently to establish facts. That is a good stab at the tests required, but funnily enough those are not the tests in the Bill. Clause 8, entitled ““Purpose and conditions””, gives four tests: ““efficiency””; ““effectiveness””, which is a very broad term and is not defined; ““economy””, which we presume means value for money; and"““securing appropriate accountability to Ministers””." Again, I do not know what ““appropriate accountability”” is, and these are very subjective tests to have in legislation. Clause 8(2) suggests that any reform of a non-departmental public body should"““not remove any necessary protection””," whatever that means, and should not"““prevent any person from continuing to exercise any right or freedom””," which is quite specific and probably an important protection. In our report, we suggested in paragraph 23:"““There should be a single set of tests that covers: whether a function needs to be performed””—" the existential test—"““whether it is appropriate for it to be performed independently by a public body””," which is surely the impartiality test,"““and how it can be delivered most cost-effectively (value for money).””" I hope that that recommendation might be better reflected in the Bill. Perhaps the Parliamentary Secretary, Cabinet Office, the hon. Member for Ruislip, Northwood and Pinner (Mr Hurd), could address that later. The Committee also considered the Government's claim that abolishing bodies and transferring their functions back to Departments would improve accountability, and I submit that the Government are applying a rather narrow test of what constitutes accountability. Of course, Ministers want to retain influence over decisions for which they are ultimately accountable, but our conclusion was that to focus exclusively on that traditional form of ministerial accountability ignores other ways in which bodies are held to account. In particular, we are all aware of how stakeholder groups and civil society play an important role in providing challenge and criticism to public bodies from day to day so long as they have a clearly identifiable focus for that challenge. I do not wish to denigrate civil servants in any way, but a civil servant in a Department is a far more anonymous entity than a named public body. The Committee proposed that converting public bodies into executive agencies could ensure that Ministers remained responsible for clearly identifiable bodies within their departmental responsibilities without losing that public focus. We also considered a number of other topics that we felt were important to make the reforms a success, including how Departments sponsor their public bodies and how the transition should be managed. The Government's response was somewhat critical of parts of our analysis, particularly the comments on cost savings, and I was glad to hear ministerial clarification earlier this year of how cost savings will be made. To the Government's credit, they accepted a number of our recommendations, including the conversion of some public bodies into executive agencies. This is a controversial Bill, because we do not have an Armed Forces Minister or a Justice Minister at the Dispatch Box to answer all these problems. It is that shortcoming in the Bill that led the other place to make substantial amendments to it. It is much improved and much more acceptable and I shall certainly support it, but we could make improvements to ensure that these controversial changes to bodies that were, after all, brought into being through primary legislation are not simply ticked off by Ministers with a stroke of the pen.