Burying the bodies

The National Audit Office today reported that public bodies reduced their administrative spending by £723 million in 2012-13, compared to 2010-11. 283 public bodies have been removed, either by merging them with other bodies or outright abolition. This represents 92% of the expected total reduction. So far, so good. The Cabinet Office are pleased that the NAO “recognises this progress” in driving costs out of the system. However, as the NAO indicate in the detail of the report, savings figures alone don’t tell the full story of the success or failure of reform in government. The spending reductions, which are expected to total £2.6 billion over four years, are partially the result of savings not related to the reform programme. Organisations have been working to find other efficiencies and these savings are not separated from the savings arising as a direct result of the programme. Given this, it is unclear exactly what impact the bonfire has had on the expenditure of public bodies. Substantial savings have certainly been achieved, but could similar figures have been achieved by other means, without the need to dramatically reduce the number of public bodies? The focus on the scale of savings also obscures the bigger question of whether structural reform will actually deliver “public value” in the form of improved services. On this count, the NAO is unequivocal: “the Cabinet Office and departments have so far been unable to collect evidence to measure the wider value of reform”. Non-financial outcomes such as improved public service or increased levels of public trust are difficult to measure and as much as they would like to, the Cabinet Office will struggle to convincingly attribute any improvements to structural reform alone. This matters to government because in the absence of improved services, savings, no matter how large, are a hollow victory. The NAO point out that the landscape of public bodies remains complex and will continue to be even once the programme of reforms has concluded. As the Institute has highlighted in Read Before Burning, simplifying the landscape of public bodies is essential to put them on a stable footing in the long term and to provide clearer lines of accountability. The row over appointments to Ofsted and the Environment Agency’s heavily criticised response to floods in the south-west has once again thrown the relationship between sponsoring departments and their public bodies into the spotlight. Spending may have been reduced, but volatility and uncertainty remain, while public trust in arm’s-length bodies continues to be fragile. Until success is determined not by savings alone, but by the quality of services delivered and public confidence in government’s use and management of arm’s-length bodies, questions will linger about the effectiveness of the Public Bodies Reform Programme.