“What the world would look like if your public body didn’t exist?” 

Public bodies exist to support the government to achieve their key strategic objectives, delivering a range of vital services from inspecting schools standards to regulating the nuclear energy industry. For decades, the number of public bodies in existence has fluctuated, as successive administrations have debated the optimal delivery structures for public services.  

In 2010, the coalition government embarked on a reform programme- subsequently termed the “bonfire of the quangos” – which reportedly reduced the number of arm’s-length bodies by over 290.  

At our latest hybrid seminar, ACE and PCF members considered the case for public bodies, reflecting on why the language of ‘last resort’ persists today, if the ‘three tests’ used to establish public bodies remain relevant, and how public bodies can support government mission and encourage greater system thinking.  

Delegates included a range of new and experienced public body leaders. Those leading agencies at the time of the “bonfire of the quangos” shared advice for current public body leaders: be prepared to deliver a 30-second elevator pitch at any time on “what the world would look like if your public body didn’t exist.”   

With thanks to our expert panel:  

• Dr Matthew Gill, Programme Director, Institute for Government  
• Emily Miles, Chief Executive, Food Standards Agency (Host)  
• Dame Glenys Stacey, Chair, Office for Environmental Protection  

History of the ‘three tests’  

Public bodies have existed for centuries, for example the British Museum, established in 1751, and  Ordnance Survey, established in 1791.  

In the 1980s, ministers began to take a more strategic approach to managing the public body landscape, terming ‘Executive Agencies’ to describe entities which have a clear function, and are administratively distinct, but legally part of a department.  

In 2010, three new tests were introduced to determine whether a public body should exist:   

1. Is this a technical function, which needs external expertise to deliver? 

1. Is this a function which needs to be, and be seen to be, delivered with absolute political impartiality? 

1. Is this a function that needs to be delivered independently of ministers to establish facts and/or figures with integrity? 

The Cabinet Office continue to use this criterion to assess whether a public body should be created and continue to exist, through the form of ‘Public Body Reviews’.  

New research from the Institute for Government (IfG) argues that these tests do not meet the country’s needs and should be re-written to allow ministers to use public bodies more flexibly and more accurately reflect the reality of why public bodies are being set up today.  

The IfG advocates for three new tests, focused on effectiveness, independence and cost efficiency – and some ‘guiding questions’ to support decision makers. 

These should be considered when evaluating potential new bodies as well as the reform or abolition of existing ones, either individually or as part of a periodic review process. 

Measuring efficiency and effectiveness in government 

ACE and PCF members discussed the value of re-writing the three tests, to better reflect the plethora of reasons by which public bodies are created today.  

Current government guidance directs that public bodies should only be set up as a ‘last resort’, though members reflected that this doesn’t always match reality, as public bodies are created for numerous reasons, not least as a means to manage political “hot potatoes”. 

Members shared views that the ‘last resort’ rhetoric is often driven by an innate desire to avoid waste and retain control. To re-frame the ‘three tests’, they suggested that there would need to be clearer lines of accountability and greater clarity on how to measure efficiency and effectiveness.  

Establishing new public bodies  

How and why a public body is established can affect the entire trajectory of the organisation. Delegates discussed key factors to consider when setting a public body up for success, including calibrating a realistic calculation of funding, considering future pay and pension arrangements, and establishing the tone and voice of the organisation from the start.  

As discrete entities, members argued that public bodies are well placed to support government to deliver on clear missions. For example, creating a public body to deliver on environmental protection can help to enhance public understanding on the government’s goals in this area.  

Considering the wider system 

Public bodies exist as part of a much wider eco-system, including government departments, private companies and third sector organisations. ACE and PCF members discussed what steps can be taken to encourage a more unified approach to delivering services, for example encouraging greater co-ordination across sectors in the approach to managing combined risk.  

The Cabinet Office’s latest ‘Public Bodies Review Programme’ aims to address this, by enabling groups of public bodies to be reviewed together, along with relevant counterparts in departments. Public body leaders who feel this may be helpful are encouraged to advocate for a group review, ensuring that the rationale for this approach is clearly laid out in the terms of reference of the review.  

What’s next?  

What would the world look like without public bodies? As we approach another general election in the next year, and with such strain on the public purse, the future for public bodies is uncertain.  

One thing for sure is that established soundly, public bodies are well placed to support government to deliver on mission, enhance public trust in public institutions, and encourage greater system thinking.  

ACE and PCF members interested in continuing the conversation on how to re-write the ‘three tests’ are encouraged to get in touch with the IfG public bodies team at matthew.gill@instituteforgovernment.org.uk.