Q. When is an agency not an agency?

Welcome to the confused subject of arm’s length government. At the launch of the Institute last year, Cabinet Secretary Sir Gus O'Donnell singled out the tangled landscape of arm’s length government as a suitable case for 'IFG treatment'. One year’s research, seminars and discussions on, we have published Read before Burning, our recommendations for sorting out this confused landscape. A key recommendation is to untangle the current confused designation of public bodies – and relate form and governance much more closely to function and the freedom the body needs to perform that function. Although ALBs in total account for about 14% of government spending, the big money is tied up in just a few organisations – and even then 75% of NDPB spending is passed on to third parties.  If we are to get real efficiencies and better governance, we need remove the temptation to treat arm's length government as a numbers game. Half ALBs are small advisory bodies with no independent budget or staff. They advise, not execute. We think they should simply be treated as what they are - departmental advisory committees and no longer be regarded as part of arm's length government. For the rest, we would get rid of the confusing categories of non-Ministerial departments and executive NDPBs and replace them with three new, distinct categories:

• Constitutional bodies – answerable to Parliament, not Ministers (like the NAO or Electoral Commission)
• Independent Public Interest Bodies – regulators, standard setters, watchdogs – which need to be protected against Ministerial interference (think Ofgem, UK Statistics Authority and the new Office for Budget Responsibility)
• Departmental Sponsored Bodies – with some discretion on what they do, or needing expertise on how to do it  – but operating within departmental strategy (for example, the Arts Council and the Environment Agency)

The Government could make the change either as a big bang or over time as bodies were reviewed. But is the hassle worth it? On paper this looks like a prime piece of bureaucratic tidymindedness – and potentially an excuse to waste public money on new logos and letterheads for no real change. But our research suggests that a big part of the ALB problem is:

• a lack of clarity on roles and responsibilities
• a lack of transparency with the public
• an inconsistent approach to managing ALBs across government – which leads to tension, duplication and real inefficiency.

So there are potential real gains for Ministers, civil servants, people working in ALBs and, most importantly, the public, from a clear and common understanding of the relationship to government of different types of body.