Cabinet Office pledges new era of accountability for arm’s-length bodies

Alex Chisholm tells MPs service-level agreements with departments could be part of future arrangements
Alex Chisholm Credit: Parliament TV

By Jim Dunton

01 Jul 2021

Departments will be required to have bigger and better teams to oversee the scores of arm’s-length bodies they are responsible for under plans to bolster accountability, Cabinet Office perm sec Alex Chisholm has told MPs.

Public spending watchdog the National Audit Office last week said the Cabinet Office did not have the right data to properly support its oversight of the 295 ALBs in England and noted that departments were not required to supply risk-profile information about the organisations.

In an update to members of the Public Accounts Committee,  Chisholm said his department was currently working up proposals to enhance the “capacity, capability and consistency of departmental ALB teams” in line with a pledge in last month’s Declaration on Government Reform.

The perm sec said a Cabinet Office team was already reviewing ways to increase the effectiveness of departmental sponsorship of ALBs that would be underpinned  by “clear performance metrics and rigorous new governance and sponsorship standards”, as described by action 24 of the declaration. 

Chisholm is due to appear before the PAC on Monday, but in advance of the session he wrote to chair Meg Hillier with further details on the plan for arm’s-length bodies.

“My team has already commenced work to map the existing ALB sponsorship landscape and will then make recommendations to ministers on appropriate next steps,” Chisholm said. 

“Next steps could include, for example, service level agreements between the ALB and the department, new standards for sponsorship and developing a new learning and development offer.”

Chisholm, who is also chief operating officer of the civil service, said the Declaration on Government Reform also pledged new tools and guidance to support departments undertaking ALB reviews.

“These reviews will be proportionate and risk based,” he said. “It will be for departments to judge which ALBs should be prioritised for review, based on relevant factors such as the risk that the ALB poses and the date a review was last undertaken.”

Chisholm told PAC members that he was also planning to “review options” to better integrate ALB management information following the NAO report.

“There is potential for performance improvement through the sharing of best practice across government,” he said. 

“The Cabinet Office already plays a role in facilitating the sharing of best practice across the ALB landscape and we will consider how we can further enhance these efforts.”

The NAO report remarked that while the Cabinet Office said there were 295 ALBs, with 300,000 staff and an annual spend of £265bn a year, the figure was open to question.

It said the Office for National Statistics had identified 830 bodies that delivered across central government of which the 295 figure was a subset. The NAO said that the Cabinet Office had identified 463 ALBs in 2016, and that the decrease had been largely driven by the reclassification of bodies and “does not reflect a true reduction in the number of bodies delivering across government”.

NAO head Gareth Davies said the Cabinet Office had work to do if it was to maximise the potential to improve the way ALBs operated and the value for money they provided.

“Government relies on arm’s-length bodies to deliver essential polices and public services, but the inconsistency in the way they are set up and overseen by departments limits the opportunity for lessons to be shared across organisations,” he said.

“The centre of government needs to make considerably more progress in understanding the risks carried by ALBs, and work with departments and ALBs to ensure that guidance and good practice are followed.”

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