Fresh guidance aimed at clarifying the often-complex relationships between staff in central government departments and their arm's length bodies has been published by the Cabinet Office.
There are currently more than 460 arm's-length bodies (ALBs) in the UK, operating at varying degrees of independence from government, and responsible for around £250bn a year in public spending. They include HM Courts and Tribunals Service, HM Revenue & Customs, NHS England and the Gambling Commission.
But despite the vast sums of money and wide range of policy areas handled by ALBs, a report published last year by MPs on the Public Accounts Committee warned of unclear lines of accountability; limited knowledge-sharing between departments and ALBs; and a failure by some departments to make use of the frontline expertise gained in their agencies.
Tidying of the quangos? New guidance to help officials sort “confusing” arm’s-length bodies
Why we need a more grown-up relationship between departments and their arm's length bodies
The PAC urged the Cabinet Office to take "meaningful steps to strengthen oversight" of ALBs, and called on it to help create a "shared understanding of what works" in a bid to improve "learning both within departmental groups and across departmental boundaries".
The Public Chairs Forum, which represents the leaders of ALBs, has also called for a rethink of the relationship between departments and their agencies, warning that ALBs too often experience "overbearing, disproportionate oversight" from their host departments.
The new "Code of Good Practice" published on Friday – and drawn up by a working group made up of 17 departments and agencies – seeks to address some of those shortcomings, with civil service chief executive John Manzoni saying departments and arm's-length bodies should increasingly be viewed as "a total delivery system".
"For the system to work well, the relationship between a department and its bodies cannot be just about oversight," he added. "An effective partnership must be based on trust, clarity of accountability, and a shared understanding of purpose and outcomes.”
While the fresh guidance stresses that there is no "one size fits all" model which will be appropriate to all departments and ALBs, it calls for a focus on four "common principles": purpose; assurance; value; and engagement.
That includes ensuring that the purpose of any arm's length body should is "clear and well understood", with the aims of an ALB explicitly stated and subject to review "at least once every three years".
The guidance also suggests that a "light touch" annual review could be carried out by departments to check for "continuing relevance".
On assurance, the guidance says that while ALBs must be given "the autonomy to deliver effectively", the board of the host department and its non-executive directors should have "an appropriate overview" of the ALBs work, "proportionate to its purpose, risk and required degree of independence".
Meanwhile, the "value" section stresses the need for stronger partnerships between staff in departments and their ALBs, calling for a "regular exchange of skills and experience", including through secondments, and more involvement of ALBs in the policy development process, a role traditionally reserved for departments.
It also floats the idea of allowing non-executive directors from ALBs to sit on the boards of their host departments in order to make better use of their "expertise and experience".
On "engagement", the Cabinet Office guidance calls for "trust, respect and shared values", with departments and their ALBs asked to draw up an "engagement plan" to show how they will work together.
This should, the code states, be reviewed every time there is a change in senior leadership, with a "a clear sense of 'the way we do business together'" conveyed to staff.
There should also, it says, be a "clear and well understood process to resolve disputes", while newly-appointed staff should be briefed on the challenges facing either their host department or relevant ALBs as part of their induction process.