MPs tell Cabinet Office to ensure proper oversight of arm's length bodies

The Cabinet Office should press other Whitehall departments to improve the way they work with arm's-length bodies, the Public Accounts Committee has said.

It said the web of some 460 bodies had grown in an unplanned way without clear rules for their operations and accountability.

Committee chair, Labour MP Meg Hillier said: "The Cabinet Office describes today's diverse network of arm's-length bodies as 'an accident of history’.

“While this 'accident' may not have been preventable you would certainly expect any replacement system, designed from scratch today, to look very different.”

She said the Cabinet Office, given its role at the heart of Whitehall, must ensure these bodies are effectively overseen with clear rules on their conduct, accountability for spending and performance.

In a report Departments’ Oversight of Arm’s-Length Bodies, parliament’s spending watchdog said there was too little understanding across government of how to effectively oversee these semi-independent bodies.

They range in size from some of the largest parts of central government - such as NHS England and HM Revenue & Customs - to smaller concerns such as the Gambling Commission.

The PAC said lines of accountability between departments and arm's-length bodies were unclear and there was a lack of criteria to judge which tasks should be performed by a department and which by arm's-length bodies, with the result that it was difficult to tell who should be held to account.

MPs on the committee were “not convinced departments' oversight arrangements are proportionate to the relative risks and opportunities presented by different arm's-length bodies” and thought these could also introduce unnecessary costs and bureaucracy.

They also criticised the appointments processes used by arm’s-length bodies to recruit to non-executive roles, which the report described as “lengthy and burdensome and risks putting off good candidates”.

A Cabinet Office spokesperson said: “The Cabinet Office has taken the lead in engaging with departments across Whitehall and arms-length bodies.

“We are taking the opportunity to go further than oversight and are collectively working to redefine the relationship between departments and arms length bodies.”

Mark Smulian