Why it's time to transform the relationships between departments and arm's-length bodies

Written by Lesley Ann Nash on 27 February 2017 in Opinion

Lesley Ann Nash, the Cabinet Office's director for public bodies reform, explains how the government's new code is aiming to shift relationships between departments and arm’s-length bodies away from compliance and control towards a proportionate, risk-based partnership model

Delivering the government’s reform agenda and building a stronger, fairer Britain and an economy that benefits everyone will require all parts of the public sector to work together effectively.

This is particularly important for the relationships between departments and arm’s-length bodies. Arm’s-length bodies deliver vital public services in a range of areas. However, as the National Audit Office (NAO) and Public Accounts Committee (PAC) found in reviews last year, more needs to be done to build effective working relationships between them and departments and to make better use of the expertise they possess.

That’s why since the summer, Cabinet Office has been working with departments and arm’s-length bodies to develop a Code of Good Practice for how to build effective working relationships, with the code published at the end of last week.

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The Code of Good Practice provides a set of overarching principles and standards for departments and arm’s-length bodies to use to develop effective relationships. However, it is not prescriptive in its approach. As the PAC noted, there can be no “one size fits all” model for oversight of arm’s-length bodies.

The Code was developed collaboratively by a working group of departments and arm’s-length bodies, facilitated by the Cabinet Office. The principles themselves are drawn from best practice from across government.

The Code aims to bring all relationships between departments and arm’s-length bodies up to a consistently high standard. But more importantly, it also seeks to transform relationships, away from what has historically been a focus on compliance and control, towards a proportionate, risk-based partnership model.

The Code sets out four principles to achieve this:

  • Purpose – clear and mutually understood purpose, objectives, and roles
  • Assurance – a proportionate approach to assurance based on the risk and purpose of the arm’s-length body
  • Value – departments and arm’s-length bodies sharing skills and experience in order to enhance their impact and deliver more effectively
  • Engagement – open, honest, constructive relationships based on trust, mutual understanding and clear expectations about the terms of engagement

Following these principles, and the standards that support them, will help departments and arm’s-length bodies to work together more effectively.

Departments are already considering how their relationships meet the principles and standards of the Code and are developing plans to address areas for improvement. In the future, departments will assess their relationships with arm’s-length bodies against the principles in the Code as part of routine reviews and annual assurance processes.

The Code of Good Practice is an opportunity to think about how relationships between departments and arm’s-length bodies can work better. I ask colleagues across government to live by the principles and standards of the Code so that we can all work together more effectively and deliver on the government’s reform agenda.

About the author

Lesley Ann Nash is director for public bodies reform at the Cabinet Office

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Submitted on 27 February, 2017 - 11:29
It is not so much about purpose, assurance, value and engagement that is exercising the leadership at the Ministry of Defence right now, but how it can go about reducing the operating costs of its arms-length defence procurement organisation at Abbey Wood, Bristol which is costing the taxpayer £1,100 million per year. One way this can be achieved is by aggressively bearing down on overhead costs – by searching out and replacing people at every level of the hierarchy at Abbey Wood – that is, those on the payroll who are not adding any value to business operations, only costs – with a new type of post-holder, the Task Performer/Manager. This replacement should be done on a five for one basis. The Task Performer/Manager is similar to a Player/Manager in sport in that he combines the role of a person who gets hands-on with the all-important task of doing the work, as well as, performing the essential but, intermittent management tasks of assembling the team, showing leadership by example, mentoring and coordinating with other Task Performer/Managers. The most important elements of the Task Performer/Manager’s responsibilities include: (a) Setting (and revising) the Requirement in consultation with the User and providing direction to Bidders. (b) Designing and utilising a Marking Scheme that has previously been revealed to ITT recipients. (c) Running the winner-takes-all competition and removing Bidders progressively, one-by-one – at the start, and at the end of each Contract performance phase. (d) Carrying out the policing function of monitoring and scrutinising the performance of Contractors during each Contract performance phase. (e) Selecting the winning Contractor and ultimately overseeing his performance during the full term of the main Contract to make sure he delivers against his promise. Accordingly, Task Performer/Managers should be talented enough to be able to express the whole of the Requirement in plain English (without inconsistency or duplication) in such a way that, it cannot be interpreted any other way than intended. Incidentally, it is not the job of the Task Performer/Manager to partake in detailed design decisions relating to evolving Technical Solutions, do ‘analysis’ work, make trade-off choices or tutor Contractors on how to satisfy the Requirement. Note that doing PowerPoint presentations is not on the above list. A substantial amount of time spent doing this work (recorded on timesheets) is chargeable as Direct labour to the entity paying for the work to be done, i.e. the military customer or Front Line Commands, whilst the remainder is Indirect Labour. This utility function is best suited to professionally qualified, multi-disciplined, performance-orientated people imported from the Private Sector whose first and foremost instinct is to solve the problem and get the job done, notwithstanding the constraints. Additionally, this approach provides certainty that continuity of direction will be provided to Contractors during the full period of the acquisition programme, a huge improvement on the presently applied practice of simply rotating here-today-gone-tomorrow procurement officials. A further benefit to be derived from appointing Task Performer/Managers is that the risk that the wrong person, who does not possess the appropriate subject matter expertise in the relevant discipline will end up being selected, is eliminated, at a stroke – an all too frequent occurrence right now, which would explain why MoD Abbey Wood is institutionally inept and inefficient. @JagPatel3 on twitter

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