Why new public bodies fail – and 10 lessons for the government to get it right

A new Institute for Government report has revealed the gap in support for people creating new bodies – with much practical knowledge passed on by word of mouth, on an ad hoc basis, and relying too heavily on interpersonal networks.

With the Labour government planning to create 17 new public bodies and counting, such as Great British Energy and an Ethics and Integrity Commission, How to set up a public  body, published today, is designed to fill this pragmatic advice vacuum – and sets out 10 practical lessons from past experience to help ministers, senior civil servants and public body leaders to design and lead new bodies successfully.

The new IfG report is published alongside an IfG tracker charting how much progress the government has made on creating its planned new public bodies – and revealing how much work still needs to done.

Between 2000 and 2023, between two and 12 public bodies were established each year – although a much greater number have been abolished. IfG research suggests that the direct cost of creating a new government department – excluding staff costs – can be around £15 million, with up to further £34m resulting from lost productivity as staff adjust to the new organisation.

Drawing on interviews with 35 people involved in the creation of six public bodies – including the Office for Budget Responsibility and the UK Health Security Agency – over the last 20 years, the IfG paper sets out the steps that should be taken – alongside studying Cabinet Office guidance on the process of establishing a body – to ensure that newly-created public bodies don’t consume time, money and ministerial attention, and ultimately fail to achieve their goals.

The IfG’s 10 lessons for setting up public bodies are:

1. Define the body’s mission and objectives clearly. The Independent Commission on Civil Aviation Noise (ICCAN) was abolished within three years because politicians, civil servants and leaders never agreed what it was for. 
2. Build widespread support. The ability of the Trade Remedies Authority (TRA) to bind the government was cut back two years after launch because new ministers were less committed to the value of a technocratic body shielding ministers from producer lobbying. 
3. Agree powers, independence and governance in advance. The National Citizen Service (NCS) Trust was set up at arm’s length because its users were likely to distrust a government programme, but this contributed to a lack of financial control in its early years.
4. Secure the right resources early. The UK Health Security Agency (UKHSA) faced financial uncertainty and big cuts in its first year, frustrating recruitment, even at board level. 
5. Plan realistically for the future from the start. The Human Tissue Authority (HTA) was set up as an independent body to demonstrate action politically, but civil servants initially expected it to be merged with the Human Fertilisation and Embryology Authority (HFEA) in due course, which led to debate over its location and leadership structure. 
6. Recruit and prepare a well-balanced senior team. The HTA recruited a board including pathologists and a professor of ethics to ensure early credibility following the findings of the Retained Organs Commission.
7. Build on the enthusiasm that can surround a new body. The Office for Budget Responsibility (OBR) was able to recruit a strong senior team because they were excited by its purpose. 
8. Anticipate how the body will change and grow. The TRA initially needed technically expert leaders who could, in uncertain circumstances, credibly build functions the UK had not performed for decades. When it had developed greater specialist depth, their focus could change to incremental improvement. 
9. Maintain the body’s political licence. The Office of Tax Simplification (OTS) could not maintain political consensus over what ‘tax simplification’ meant and was eventually abolished by ministers.
10. Resist mission creep that detracts from the core purpose. In its early years the OBR resisted calls to examine the impact of climate change on the sustainability of the public finances.

Dr Matthew Gill, report author and programme director at the Institute for Government, says:

“Public bodies – from the National Wealth Fund to the National Care Service – will be central to the Labour government’s success. But they are hard to build well and many questions about the funding, governance and remit of the 17 bodies so far announced remain unanswered. Our report provides a timely how to guide, based on lessons learned that have not been clearly set out before.”