Smaller Government: Shrinking the Quango State - Public Administration Committee Contents

Written evidence from the Public and Commercial Services Union (PCS)


  1.  The Public and Commercial Services Union (PCS) is the largest trade union in the Civil Service (with over 300,000 members). We are submitting our views to the select committee because of our key position as the largest trade union representing staff working for Non-Departmental Public Bodies (NDPBs).

  2.  We would be happy to supplement this written submission with oral evidence or further written evidence.

  3.  Our members and representatives in NDPBs have a wealth of information and understanding about the organisations, what they do, why their functions are important to the economy and to society, why it is important that those functions continue, and what the impact would be if they didn't. We have illustrated our points with examples from these organisations, and would be very happy to follow up with further detailed evidence.

  4.  A major concern we have about the process of deciding to abolish NDPBs is that there has not been sufficient consultation of those that provide and use their services, which we suggest is a further reason the select committee would want to hear more detail.


    — PCS disagrees with the Government's policy of abolition of NDPBs as part of public sector cuts to tackle the deficit, and instead proposes an alternative strategy.

    — We are concerned about the process of abolition, in particular the failure to assess and evaluate the impact or to allow Parliamentary or public scrutiny of the decisions.

    — We challenge the assertion that cutting NDPBs will increase public accountability: we believe this will worsen it.

    — We explain that far from reducing costs, there will be serious economic, regional and social impacts from abolition.


  5.  The Government plans to cut the number of NDPBs as part of its plans to reduce the deficit by reducing the level of public expenditure.

  6.  PCS disagrees with the Government's assertion that it must reduce the level of public expenditure in order to tackle the deficit.

  7.  We propose an alternative strategy: we should collect the tax that is uncollected, avoided or evaded; we should create jobs rather than worsen the economic situation by cutting them; and we should use the nationalised bank assets for public good. If this strategy was followed public services would not need to be cut.

  8.  We don't accept that it is necessary to abolish NDPBs as part of public sector cuts. (Q1)


  9.  The Government has already begun the process of abolishing NDPBs before publishing the draft legislation to enable abolition, and before there has been proper assessment or consultation. Ministers have made announcements disparaging organisations while announcing their abolition, without having carried out proper and transparent evaluation.

  10.  In preparing this submission we have concentrated on organisations where abolition has been announced to illustrate our concerns about the process and the impact. However, we don't know which other organisations are also to be abolished using this same flawed and hasty process: all we have to go on is a leaked list of organisations under consideration.

  11.  The Government has failed to do an equality impact assessment of the proposal to cut NDPBs, despite this being a legal duty.

  12.  The Government has failed to do economic or regional impact assessments, although there will be economic and regional impacts of the abolitions.

  13.  In the decisions made so far on which NDPBs to abolish, the Government has failed to consult users and providers, leading to flawed decisions which have not taken account of the full functions carried out by the organisations.

  14.  The process for deciding which NDPBs should be abolished has not been sufficiently transparent because of the failure to properly assess, evaluate and to consult (Q4).

  15.  The Government proposes to introduce legislation to abolish public bodies without Parliamentary scrutiny. Many of the organisations whose abolition has been announced were set up by primary legislation, but no opportunity has been allowed for Parliamentary scrutiny of proposals to abolish or merge them.

  16.  Because the process of decision-making has not been transparent, it is difficult to know how decisions to abolish NDPBs have been reached. However, it appears that many of these decisions are open to challenge using the Government's own criteria: technical operations; politically impartial decision-making; determining facts transparently.

  17.  Clearly a number of NDPBs perform important functions which should be politically impartial. Several independently scrutinise government progress, for example the Sustainable Development Commission told the Government in 2009 that though they had made significant steps they were not on course for meeting their carbon emissions target. It is important that the Government receives advice, even when that advice might be unwelcome or unpopular.


  18.  One reason the Government has given for its decision to reduce the number of NDPBs is to increase public accountability. We challenge this proposition (Q7), (Q8).

  19.  NDPBs are already accountable to ministers of their parent or sponsoring departments, and they are also accountable to Parliament through the National Audit Office, Public Administration Select Committee, and the Comptroller and Auditor General who ensure that they spend public money for that purpose it is granted to them.

  20.  Some NDPBs have further specific channels of accountability. For example RDAs, as well as being accountable to the Business, Innovation and Skills Department, are accountable to Parliamentary subcommittees for each region.

  21.  Accountability would not be increased by abolishing NDPBs. The statutory duties and functions and other important roles they carry out will be transferred or taken up elsewhere. In some cases these functions will be transferred into central government. In others they will be transferred to the private sector, the third sector, or elsewhere.

  22.  Many of these changes will severely decrease accountability. Instead of a clear line of accountability from the NDPBs to the minister, the involvement of non-government or non-public sector organisations will create a loss of clarity about who provides what and who is accountable to whom.

  23.  Accountability in local government would certainly not be improved by the abolition of Standards for England. This body oversees the way local authorities deal with complaints about their councillors and investigates the 20% of complaints that local authorities cannot do themselves. If this function disappears, and if the Government goes further and abolishes the code of conduct for councillors and the system under which local authorities investigate complaints, then the public will have no way to hold councillors accountable for any misdeeds.

  24.  The abolition of the Audit Commission will mean that auditing will be done by private sector auditors. It will no longer be done by an accountable public body. The Audit Commission looks at local services working together to provide high quality and cost effective services and enables the public to compare value for money from area to area. If abolished the public will lose this route for holding local government accountable.

  25.  There is no evidence that accountability is being considered in the decisions the Government is making about the abolition of NDPBs.

  26.  Departments are currently deciding who will take up the functions of organisations that are to be abolished, but it is not clear that they are evaluating and considering issues of accountability: they are certainly not doing so transparently.


  27.  The Government gives cost as one of its primary reasons for the abolition of NDPBs. The inquiry asks about the implications of abolition and changes in terms of disruption and costs (Q6).

  28.  We challenge the assertion that there will be cost savings. Even if there were some savings in the short term (which itself is doubtful), there will not be long-term savings once account is taken of the full impact of abolition (Q6).

Abolition process costs, impact and disruption

  29.  The cost of the process of abolishing NDPBs includes the costs of redundancies, relocation, excess fares, retraining and recruitment.

  30.  Estate management costs will be significant, as decisions to close offices or move result in being left with premises which are hard to shift in an unfavourable property market, or being left with leases with large penalties for cancelling. For example the outstanding lease on Becta's premises, refurbished in 2010-11 at a cost to the Department for Education of £3 million, will cost the department £4 million between 2011 and 2018.

  31.  The latest estimate of windup costs for Standards for England is £15 million, set against an annual budget of £6.4 million.

  32.  There are numerous staffing impacts from these abolitions, merger or other changes, including loss of expertise, impact on staff morale, uncertainty and stress, impact on terms and conditions.

  33.  Management, unions and staff will be dealing with complex negotiations. Harmonisation of terms and conditions is made more complex by having terms and conditions that vary considerably between NDPBs and departments and across the Civil Service. There are legal obligations to carry out collective and individual consultation and complex transfer rights under legislation and agreements. There will be full or part transfer of functions, necessitating examining the percentage of an individual's work in a particular role before deciding where to allocate them, and this is just one example of much detailed work to be done.

  34.  In addition to the impact on staff, there will be disruption to the provision of public services in all organisations facing abolition or change, from organisations that are very new, for example the Young People's Learning Agency has only been in existence for five months since it was created in a reorganisation, and now faces further disruption, to other organisations which have well-established contacts and have built up a wealth of expertise and experience in their field, for example the Independent Living Fund established in 1988 which advises on and champions ways to enable severely disabled people to live independently and now face the loss of these assets.

The impact costs

  35.  There is an impact on the economy, regionally and nationally, and on the ability of this country to deal with the deficit.

  36.  The level of skills in the workforce is crucial in economic recovery. However, the abolition of education and qualifications bodies will have an impact. Employers need consistent qualifications and confidence in the standards of these qualifications.

  37.  If the Qualifications and Curriculum Development Agency (QCDA) is abolished the loss of a coordinated approach to qualifications could lead to anarchy in the field, making it difficult for educational institutions or employers to be certain of the value of qualifications that learners or potential employees present to them.

  38.  QCDA developed the Qualifications and Credit Framework. Designed to help to present qualifications in a way that is easy to understand, and which facilitates and rationalises the recognition and measurement of achievement, it has a big part to play in meeting the requirements of the Leitch Report to ensure that the country has sufficient numbers of people with the right skills to meet the challenge of the coming years. In the current economic climate, its benefit to employers and employees and the economy is of particular importance. It is essential this work is continued and built upon, however it is not clear how that will happen if QCDA is abolished.

  39.  A key example of national and regional impact is what would be lost if the Regional Development Agencies (RDAs) are abolished.

  40.  RDAs play an important role in bringing economic prosperity to all English regions, using economic expertise to encourage growth in the important regional industry sectors. An independent report by Pricewaterhousecoopers in March 2009 found for every £1 spent by the RDAs £4.50 was put into the local economy by other sectors.

  41.  RDAs lead development, provide help with new business start-ups, and support enterprise and new businesses. RDAs focus on skills development to meet the needs of regional economies.

  42.  Business leaders, local authorities and regional economists have all expressed concerns about the abolition of RDAs. There will be a considerable impact on inward investment, regional marketing, and research and development if these changes go ahead. In addition the Government has halted several large projects supported by RDAs which would have increased long term economic prosperity in regions.

  43.  The Government has stated that regions such as the north-east are over reliant on the public sector, and it wants the private sector to flourish. The abolition of RDAs will hinder the development of private sector industries in these areas, where a strategic approach to economic regeneration is required. As a result of the abolition of these organisations regional economies will suffer.

  44.  The loss of RDAs and the positive role they play will be exacerbated because there will be no Government Office Network (also being abolished as a separate measure) to fall back on.

  45.  Abolishing the RDAs could put at risk European funding which aims to help England's most deprived areas, costing hundreds of millions of pounds. It has not yet been decided how to manage the programme after the abolition, and the European Commission has made it clear that the change could mean targets are not met and the funding could be lost in regions that will be in even more need as a result of public expenditure cuts.

  46.  The abolitions will have an impact on local areas and regions. One example is that abolition of the three education bodies employing over 1000 people will have an impact on the wider West Midlands economy as these high-quality jobs are lost from the area, and will hit Coventry particularly hard, with Becta and QCDA being among the largest local employers with 750 staff between them.

  47.  The Government said in the June budget that it would have regard to the impact of cuts on areas of the country which most rely on the public sector employment. However, many of those areas are likely to be affected by the loss of jobs as a result of abolishing NDPBs (on top of other job cuts coming out of the spending review).

  48.  The abolitions will have an impact on the rural economy, hampering rural regeneration.

  49.  The Agricultural Wages Board plays an important role in attracting and retaining skilled workers. If it is scrapped there is likely to be a race to the bottom amongst rural employers, which will exacerbate the skills and labour shortages, threaten the viability of agriculture and have a major impact on the rural economy.

  50.  Many of the organisations facing abolition save the Government or the public sector money, including the Sustainable Development Commission, National Policing Improvement Agency (NPIA), education bodies and many others.

  51.  Costs for schools will increase if they have to carry out the functions provided by Becta, General Teaching Council and QCDA. For example, with its capability for creating economies of scale in ICT provision, Becta plays a key role in ensuring schools are able to get more for less.

  52.  There is a strong case for maintaining a central source of ICT expertise on cost grounds. A Becta agreement with Microsoft that greatly reduced the number of licenses schools are required to buy will not be renewed in December 2010, and there is no guarantee any other organisation(s) will be able to replicate this agreement, resulting in significantly higher potential costs of operating system and software licences for schools.

  53.  The abolition of the Agricultural Wages Board will mean that farmers will have to negotiate pay and understand employment law, meaning increased costs and bureaucracy for them, and potentially costs from the harm done to industrial relations in the industry.

  54.  There are costs to carrying on the work done by NDPBs that will be abolished if their functions continue elsewhere.

  55.  However, there will be even greater impacts and costs from not carrying out them out after abolition.

  56.  For example, there will be costs in corruption and waste if organisations such as the Audit Commission and Standards for England are abolished.

  57.  Standards for England was set up to ensure standards in local government, and if it is abolished the problems of corruption that led to its establishment are likely to recur meaning long-term costs rather than savings. The problem is exacerbated by the abolition of the Audit Commission, which will no longer be in place to prevent local fraud, corruption and financial irregularity.

  58.  In addition, if Standards for England and the ethical standards regime for local government is abolished the outcome could include variable and declining standards, declining public confidence in elected officials, and in national and local politicians, reduced access of the public to complaints mechanisms, and a loss of advice or consistency for local authorities on standards of behaviour.

  59.  Abolishing the Commission for Rural Communities will mean a loss of the important role it plays in the economic regeneration of rural communities, changes to Natural England and the Forestry Commission will endanger nature conservation work and the protection of vulnerable species and habitat, and abolition of the Royal Commission on Environmental Pollution will put the environment at greater risk from pollution.

  60.  The Sustainable Development Commission (SDC) plays a role in improving the efficiency and sustainability in the way government is run and how it decides what it does, and this will be lost, with resultant costs, if it is abolished.

  61.  In addition, the loss of the SDC will mean a loss of its crucial work in scrutinising government progress toward sustainability, helping towards progress in energy conservation and a low carbon economy and encouraging public debate on a whole range of climate and environmental issues.

  62.  If the General Teaching Council for England (GTCE) is abolished, there is a question about who will carry out the safeguarding functions of the GTCE independent of government in England (GTCs in Scotland, Northern Ireland and Wales are to continue). It will mean the loss of the independent professional body whose remit is to contribute to improving the standards of teaching and quality of learning and to maintain and improve standards of professional conduct amongst teachers in the interest of the public. This loss will impact upon standards in schools in England.

  63.  The GTCE's Professional Standards Team have investigated over 4,000 cases of unacceptable professional conduct, serious professional incompetence or convictions for relevant offences, including manslaughter, fraud, accessing of inappropriate materials on school equipment, and grooming of minors.

  64.  The National Policing Improvement Agency (NPIA) provides critical national services to support frontline policing, helping the police to save money and operate more efficiently (eg by achieving value for money in procurement) and to improve the focus on serving the public and working towards a safer society. There is a danger that these will be lost if the NPIA is abolished.

  65.  Particular groups will feel an impact. From the abolition of education NDPBs young people and learners face a less safe environment, lower provision and access to resources, less help for teachers, less choice of schools and concerns about quality of examinations, curriculum and qualifications.

  66. There will be an impact on some of the most vulnerable in society. The Independent Living Fund helps 21,000 people who are severely disabled to live independently. With administration costs of only £9 million a year (out of a total grant of £350 million) it plays a key role in saving the state money that would otherwise be spent on institutional care. If abolished many users and providers are very concerned that local councils will be unable to provide any more than basic support, because of financial pressures and the complexity of replacing a national service to individuals. Disabled people could lose their ability to live independently in their communities and take part in society as full and equal citizens.

  67.  The inquiry asks about improving effectiveness for remaining NDPBs after abolitions (Q8). We consider that the effectiveness of the whole of government should be considered, particularly as many of the functions from NDPBs that are abolished are likely to be transferred into central government or other parts of the public sector—areas that are subject to the Government's cuts agenda. We are deeply concerned that the proposed cuts will have a major impact on the effectiveness of all of the public sector.

October 2010

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