The Cabinet Office has “not been enforcing the code for public appointments” in relation to arm’s length bodies (ALBs), the Public Accounts Committee has warned.
MPs on the committee said this risked the transparency and accountability of the public appointments process and impacting the reputations of the ALBs those appointments lead.
In a report the PAC also suggested that the Cabinet Office “does little to monitor” whether the Code of Practice, intended to rein in and rationalise the use of ALBs, is actually being followed by departments.
The Government must overhaul how it devises the business cases for new ALBs, the MPs added. “If there is ever to be real progress in the governance of ALBs, the Cabinet Office must place greater emphasis on ensuring these business plans are correct and in order rather than trying to reform an ALB once established.”
Dame Meg Hillier MP, Chair of the Public Accounts Committee, said: “The famous ‘bonfire of the quangos’ of a decade ago notably failed to spark and in fact we’ve seen Government wave through half-baked business cases for arms-length bodies too often since. The public appointments to lead these bodies lack transparency and accountability to an extent that poses a real risk to the reputation of the organisation and so to how Government delivers objectives using them.
“Government must begin to properly account for the vast £265 billion of taxpayers’ money a year spent by ALBs, starting at the point of why they’re set up in the first place, and demonstrate who is genuinely the best person to lead and deliver through an open, fair and transparent public appointments process.”
A Cabinet Office spokesperson said: “It’s crucial ALBs provide value for money and deliver for the public. That's why they have strict oversight and spending controls, and our reform programme will ensure they operate to the highest standards.
“All departments’ compliance with appointment rules are monitored independently.”
The Cabinet Office said the Public Bodies Reform Programme would ensure that ALBs were operating "to the highest standards of governance, accountability, efficiency, and effectiveness that taxpayers rightly expect".