Rees-Mogg sets out guidance for new ‘bonfire of the quangos’

Teams asked to identify minimum of 5% savings as PM eyes potential for outsourcing ALB functions
Photo: Angel Glen

By Jim Dunton

27 Apr 2022

Government efficiency minister Jacob Rees-Mogg has published guidance laying the ground for a new wave of  quango reform that could see the outsourcing of more services currently delivered by arm’s-length bodies.

The guidance calls for reviews to identify savings of at least 5% from the operations of bodies put under the microscope. It also describes the Public Bodies Review Programme as more wide-ranging than the Tailored Review Programme, which ran from 2015-2020 and has been criticised as having an “overly narrow focus on governance”.

Launched as part of the commitments contained in last year’s Declaration on Government Reform, the new guidance was published on the day prime minister Boris Johnson reportedly threatened to “privatise the a*** off” HM Passport Office and Driver and Vehicle Licensing Agency because of staffing issues and service backlogs.

Rees-Mogg said the latest programme would build on action already taken by the government. He pointed to National Audit Office figures showing the number of ALBs fell by a third between 2010 and 2015 – during the coalition government’s so-called “bonfire of the quangos”, saving around £3bn annually in administrative costs.

Rees-Mogg said the number of ALBs identified in the Cabinet Office fell again from 463 to 295 between 2016 and 2019.

He said ALBs currently spent £220bn a year and employed 300,000 people, and that departments would be asked to look at their public bodies and “assess whether a function should be delivered by the state, or whether an alternative is more fitting”.

According to the guidance, departments must prioritise those ALBs they consider to be most “high-risk”, those most likely to deliver efficiencies, or those that have undergone signficicant changes to their headcount or finances, with the Cabinet Office entitled to challenge decisions.

Rees-Mogg said the programme was intended to ensure public bodies had a “laserlike” focus on delivering their objectives, and are not making decisions which should be made by ministers.

“Reviews will consider whether the body should be abolished or retained; whether it should continue to deliver all of its functions; and whether it has an effective relationship with its department,” Rees-Mogg said in his introduction to the guidance.

“The outcome of this work should see powers returned to accountable ministers, greater efficiency and where appropriate, the state stepping back both financially and from people’s lives.

“Bodies will make the most of Brexit opportunities, reflect the society they serve, improve their use of data and work as a coherent system rather than in silos.

“I know departments and their public bodies will welcome this opportunity to ensure they are match fit.”

The guidance says departments will be able to use a new self-assessment tool to help them decide the depth of individual reviews, and that the process will “inject greater pace by removing Cabinet Office from unnecessary process, such as the sign-off of terms of reference”.

It says reviews should be completed “thoroughly and rigorously, but also as quickly as possible to minimise the disruption to a department’s business”. It suggests a review of a small public body could be completed within one month while major reviews “should aim to take no more than six months”.

Although the Cabinet Office is creating a “pool” of lead reviewers for the programme, the guidance says departments “may wish to consider the merits of bringing in independent expertise, for example from the private sector”.

The guidance states that the purpose of reviews is to assure the public, ministers and principal accounting officers that the ALB’s function “remains useful and necessary”.

It says reviews should assess whether there are “more efficient and effective alternatives to deliver the government’s objectives”, potentially including “merging the body with a similar body, and closing the body and bringing its functions back to the department”.

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