Lords committee reports on first year of the Public Bodies Act

Lords committee reports on first year of the Public Bodies Act

An influential House of Lords committee has told the government that it must consult before abolishing a public body, saying: “the consultation provisions in the Public Bodies Act are statutory...not optional.”

The Lords’ Secondary Legislation Scrutiny Committee scrutinises proposals to abolish or change the status of an organisation made under the Act. A public bodies order can only be made if the minister considers that:

  • the order serves the purpose of improving the exercise of public functions, having regard to: efficiency, effectiveness, economy, and securing appropriate accountability to ministers
  • the order does not remove any necessary protection
  • the order does not prevent any person from continuing to exercise any right or freedom which that person might reasonably expect to continue to exercise.

Of the 18 draft public bodies orders that the committee considered in the first year, only three were cleared without making comments or recommendations. For the remaining orders, the committee’s recommendations fell under four broad headings:

Making the case for the reform – the committee’s most common criticism related to insufficient evidence for the reform in the Explanatory Document.

Meeting the statutory tests – although peers saw some instances of good practice where the Explanatory Document set out a persuasive explanation, they said they “had cause to comment adversely in a number of our reports where the Explanatory Document has not demonstrated clearly how the tests have been met.”

Monitoring and scrutiny of future arrangements – peers were keen to see appropriate mechanisms for future monitoring and scrutiny of the new arrangements when a draft order transfers or merges functions.

The consultation requirement – The House of Lords included a requirement to consult on the face of the 2011 Act. Although there were some examples of good practice, the report said this good practice was not universal.

But there was some praise for the government. The committee welcomed “the very positive response that ministers have given to our reports on public bodies orders. For almost all of our recommendations or comments, the government have agreed outright or agreed with the broad thrust of our recommendations.”

However, although each individual order laid was accompanied by an Explanatory Document containing some information on costs and savings, the committee had not been able to obtain a single figure for the net savings arising from public bodies orders in the first year.

“We recommend that the Government provides a statement of the net savings arising from reforms to public bodies and offices under the Public Bodies Act 2011 one year on from Royal Assent.”

“Our scrutiny of the first 18 public bodies orders has revealed some areas of good practice but more serious areas of concern. In a few instances, the explanatory material provided with the draft order may have given rise to an impression that the department concerned viewed the public bodies order process as a rubber stamping mechanism; and we have sought to challenge such assumptions.

“In carrying out our scrutiny and reporting our findings to the House…we have sought to ensure that the explanatory material makes clear how the proposed savings are being achieved, particularly when bodies are being merged. We have also sought to ensure that there is future transparency about the savings and other benefits arising from the reforms brought about by public bodies orders.”

Public Bodies Act 2011: one year on - Secondary Legislation Scrutiny Committee