Policy and characteristics of a Public Body
1. Definition of a Central Government Public Body
1.1 There are occasions where bodies carrying out public functions should be further removed from Ministers, operating more at'arm's length'. The greater degree of independence may be appropriate for a variety of reasons. This can be to provide independent advice and expertise on technical, scientific or other complex issues and take this outside the party political arena e.g. on ethical issues, or funding decisions. Tribunals and other quasi- judicial bodies are set up to meet specific requirements for separation of decision-making and appeals.Public bodies carry out a wide range of functions such as independent regulation, advice, investigation, adjudication, ombudsman services, appeal, funding, partnership, commercial and health services.
1.2 Such“arms length bodies”focus in depth on clear and specific functions and purposes. As separate legal entities, they can operate more flexibly than executive agencies, entering into partnerships and taking commercial and entrepreneurial decisions. These bodies have grown up over time and in response to particular needs and situations. This flexibility and responsiveness means that the landscape of public bodies is necessarily both complex and diverse.
1.3 Firstly,in order to be classified in its own right a body must be a separate institutional unit.A body fulfilling executive functions needs to be able to lead a separate existence. So, for example, it needs to be able to:
• Make decisions in an autonomous way
• Enter into contracts
• Own assets and dispose of them
• Employ staff
• Make payments from its own bank account
• Draw up accounts. [1]
1.4 Secondly, our remit is for public bodies sponsored by central government. Bodies whose immediate reporting line is to another public body will not be regarded as central government public bodies and will be deemed second order public bodies for Cabinet Office purposes but remain central government for both National Accounting and Government Accounting purposes.
1.5 Bodies are set up for specific purposes and there is no set template of what a public body should look like. However, over the past thirty years, a workable taxonomy of public bodies has emerged. This is used by Government to classify public bodies. This classification has important implications for accountability, funding and reporting arrangements.
2. What is a Non-Departmental Public Body (NDPB)?
2.1 The term ‘NDPB’ has been in existence since 1980 when it was coined by Sir Leo Pliatsky in his ‘Report on Non Departmental Public Bodies’. An NDPB is described as:
“ A body which has a role in the processes of national government, but is not a government department, or part of one, and which accordingly operates to a greater or lesser extent at arm’s length from ministers.” [2]
2.2 NDPBs have a national or regional remit and carry out a wide range of important functions. Their distance from government means that the day-to- day decisions they make are independent as they are removed from ministers and Civil Servants. Ministers are however ultimately responsible to Parliament for a NDPB’s independence, its effectiveness and efficiency.
3. Government policy on NDPBs
3.1 The main principles are that:
3.1.1 a new NDPB should only be set up where it can be demonstrated that this is the most appropriate and cost-effective means of carrying out the given function;
3.1.2 NDPBs should be accountable to Parliament and to the public for the way in which they carry out their functions;
3.1.3 the relationship between each NDPB and its sponsor department must be clearly defined in a way which supports the appropriate degree of delegation and independence of the NDPB, while assuring the accountable minister and department that financial management arrangements ensure propriety, regularity and value for money, and that risks will be managed;
3.1.4 all NDPBs should be reviewed regularly to ensure that the functions of the body are still required; and if so, if they are still best undertaken by the NDPB;
3.1.5 bodies which have completed their tasks or are no longer needed should be wound up.
6. Questions of accountability
6.1 Whilst NDPBs are distanced from government, the responsible minister is accountable to Parliament for the degree of independence which a NDPB enjoys; for its usefulness as an instrument of government policy; and so ultimately for the overall effectiveness and efficiency with which it carries out its functions. Ministers also remain accountable to Parliament for public money spent by a NDPB, even though bodies operate at arm’s length with their own designated accounting officers. NDPBs are also accountable to the public for the services which they provide.
6.2 Departments will need to identify whether, in the circumstances of a particular NDPB, Ministers will need to retain control over and so be accountable to Parliament for certain aspects of the NDPB’s activities. For example:
6.2.1 whether questions of policy can be left to the NDPB acting in accordance with the functions and responsibilities conferred by the instrument establishing it, or whether Ministers will need to be able to direct or modify policy;
6.2.2 whether decisions in individual cases can be left to the NDPB subject only to appeal to the courts or a tribunal, or whether appeal to Ministers is needed on some matters;
6.2.3 whether income will derive substantially from levies, fees or charges, whether their level needs to be specifically approved by Ministers or Parliament, or whether this can be left to the NDPB (subject to the restrictions set out in the NDPB’s management statement or financial memorandum).
6.3 It is unlikely that all of the risks related to delivering a service will be transferred to the NDPB. The Minister’s accountability means that some kind of assurance that risks are being well managed within the NDPB will be necessary.
8. Summary
8.1As described above, the current system of classifying public bodies has grown over time in response to an existing and complex delivery landscape. As it has become more widely accepted, new public bodies have mostly been structured to comply with the definitions and common features of different types of body set out above. This is essentially a pragmatic approach and the current method of classification by features remains the most workable option.
http://www.civilservice.gov.uk/wp-content/uploads/2011/09/2_policy_Characteristics_tcm6-2480.pdf
More information can be found on The Civil Service website: http://www.civilservice.gov.uk/about/resources/information-on-public-bodies