Public: Governance | Public

Quangos: back in the firing line

Nick Huber — Mon, 08 Mar 2010 10:52:55 GMT

There may not be the predicted 'bonfire of the quangos', but they are in for a bumpy ride and a overhaul, which ever party wins the next election. Those that do survive may find themselves merged with others or brought back under central control

As politicians fine tune plans for public spending cuts in the run up to the general election, quango leaders could be forgiven for feeling that they have a big target sign on their backs.

Quasi-autonomous non-governmental organisations, which deliver services ranging from nuclear commissioning and teacher training to arts grants and national savings, have long been accused of creating unnecessary bureaucracy and being unaccountable.

Now they are under the spotlight again, as political parties hunt for areas to save money.

Both Labour and the Conservative parties have announced plans to cut the UK's 750-or-so quangos, which spent £46.5bn in 2008/9. In December, prime minister Gordon Brown announced plans to abolish or merge more than 120 quangos.

Speaking last week at a conference on the future of quangos (Public Bodies 2010), Francis Maude, shadow minister for the Cabinet Office, told public sector managers that a Tory government would want to come to "fairly rapid conclusions" about the future of quangos.

Tory review

A Tory review would decide which quangos should be scrapped and which could be bought back within government departments, in order to make them directly accountable to ministers, Maude said.

The Conservative party has said it will decide the fate of quangos based on a three-point criteria, including whether the quango is politically impartial and whether it is "transparent", allowing important facts, such as national statistics, to be presented clearly.

At the same conference, the Institute for Government, an independent charity aimed helping improve government effectiveness, revealed some provisional early findings from its research into quangos.

One of the biggest challenges facing quango managers is a lack of clarity over quango roles and responsibilities, and their relationship with government department "sponsors" who fund them, said Tom Gash, a fellow at the Institute.

"In many cases government departments treat Arms Length Bodies (ALBs) rather differently," he said. "We found entire policy functions duplicated across ALBs and government departments."

The Institute revealed a series of draft recommendations including: "light touch" reviews of quangos every two to five years; having a "sunset" clause for some quangos, requiring their functions to be renewed; and requiring politicians to prepare a business case when planning a new quango and present it to Parliament.

How can quango leaders help safeguard the future of their organisation (and keep their own job)?

Flexible and positive

Matthew Flinders, a politics professor at the University of Sheffield and an expert on public sector reform, advised quango heads to justify what they do on a single piece of paper, focusing on where their service gives "added value. Quango leaders should be "flexible and positive", he said, presenting minister and civil servants with different possible options for reform.

Flinders was relatively upbeat about quangos' prospects. He said that moves towards a "smarter state" will probably mean some quangos will merge and become more streamlined, but Flinders predicted that there would not be a "bonfire of quangos".

Whatever the scale of reform, it is important to learn from previous quango culls, according to Lord Warner, a former health minister from 2003 to 2006 who oversaw a review of health "Arms Length Bodies" (ALBs), which helped reduce the number of health ALBs from 38 in 2004 to 20 in 2009.

Managers overseeing a quango overhaul need their political bosses to go public about the plans in order to reduce the "risk of departmental backsliding and Sir Humphrey manoeuvring," Warner told delegates.

In addition, the reasons for cutting quangos, and the benefits to the public, need to be explained in order to avoid looking like an "unguided axman" Warner said.

Quango managers are in for a bumpy ride, whatever the result of the next election. Quangos are a tempting target for cuts, and there is confusion over their exact number, powers and relationship to government departments.

One delegate at the 2010 conference asked Maude what life will be like for quango managers under a Conservative government. "Pretty fraught," quipped Maude to slightly nervous laughter from the audience.

Nick Huber

EHRC: set up and launch cost taxpayer £39m

Thu, 04 Mar 2010 09:08:00 GMT

The public accounts committee reveals the cost and disarray of setting up the Equality and Human Rights Commission - and warns that there are still weaknesses in its operation

When the Equality and Human Rights Commission (EHRC) came into existence on 18 April 2006, it was not "ready for business'', according to the committee of public accounts.

The committee has published its latest report based on evidence from the EHRC and the Government Equalities Office.

"When the Equality and Human Rights Commission came into being, at the beginning of October 2007, taking over the powers of three former commissions, just 10 directors out of the planned complement of 25 had been appointed, the management team lacked the right balance of skills, and its business plan had not been finalised. It was, to say the least, not ready for business," said Edward Leigh, who chairs the committee.

"The process by which this new body had been established, at a total cost to the taxpayer of nearly £39 million, was patently flawed."

One of the main blunders was allowing staff to leave and then re-hiring them as consultants. This meant that not only did the EHRC lose staff with valuable skills but it also cost the taxpayer £11m.

"The re-engagement as consultants by the EHRC of seven senior staff who had taken early severance was carried out without competition or formal approval," said Leigh. "The taxpayer was hit twice: some £630,000 for their severance packages and nearly £340,000 to rehire them."

The report said the chairman of the EHRC was in part responsible for the ineffectiveness with which the board scrutinised the set-up process and challenged management's proposals.

"There are still weaknesses in the EHRC's controls over staff costs, shown by the unexplained payment of £15,000 to one of the re-engaged consultants. This is not the way this committee expects public bodies to be run and reinforces the need in future for stronger controls and proper procedures for managing and using public money," said Leigh.

The committee acknowledged that serious errors were made in setting up the EHRC and it was not helped by three changes of sponsor department in the months immediately before its launch.

Leigh said the EHRC accepts that it was not ready for business when the doors opened on 1 October 2007 and that its set-up process, which cost £39m, was flawed and inefficient.

The EHRC has been without a permanent chief executive since May 2009. When the new chief executive has been appointed, he or she will need to ensure that strong controls are in place to ensure that such errors do not recur, Leigh warned.

Government reports: file under 'ignore'

Tue, 02 Mar 2010 14:19:21 GMT

Reports commissioned, recommendations ignored, has been a consistent theme throughout Labour's tenure, writes Eifion Rees, so will a new government or a coalition be any different?

As the Winter Olympics packs up in Vancouver, the Olympic torch begins its journey to ... Paris?

This may well have been the story had the government listened to its own experts. In December 2002, the Game Plan report, commissioned by the culture, media and sport department and signed off by then-prime minister Tony Blair, concluded that a successful Olympic bid would produce no lasting benefits for the capital.

It has become a familiar pattern over Labour's 13 years in power. The government commissions reports, the report's authors make recommendations, the government welcomes those recommendations – and for the most part ignores them.

Examples include Kate Barker's review of housing in 2004; a Home Office white paper on 24-hour drinking in 2005; the Crosby report on ID cards in 2008; and Ed Gallagher's damning biofuels review that same year.

Drugs tsar David Nutt

Another example was drugs tsar David Nutt, sacked as the head of the Advisory Council on the misuse of Drugs in 2009 – three months after a Commons Innovation, Universities, Science and Skills Committee (CIUSSC) report suggested scientific advisers should name and shame departments that based decisions on political considerations rather than research.

It remains to be seen whether last week's Home Office-commissioned report into lads' mags will also get left on the top shelf.

Why does the government consistently ignore expert recommendations? Clearly a balance must be struck – accepting all advice is as bad as ignoring it – but the government appears to have found another third way: commissioning reports in lieu of acting upon them.

Chris Game, honorary senior lecturer at the Institute of Local Government Studies, Birmingham, suggests Labour is probably a victim of its own prolific report-commissioning. Having championed evidence-based policy-making, it has provided academics with more ammunition to attack it than any government before – and, he suspects, after.

"Some of the blame must also lie with junior ministers, eager to make their mark and impatient with the time it takes academics to provide considered evaluations," he says.

"They jump ahead without fully waiting for, let alone incorporating, the recommendations of pilots." An example of this was highlighted in the CIUSSC report: the Every Child A Reader scheme, whose national roll-out was announced in 2006, just one year into a three-year pilot scheme.

Game adds that often there is a communication clash: academics are not necessarily very good at negotiating with politicians, providing them with what they need, when and in the form they need it.

Patrick Dunleavy, professor of political science and public policy chair at the London School of Economics, says Labour governments have tended to be more keen on commissioning enquiries, and this was particularly noticeable during the first Blair term, but doesn't believe they have more of a tendency than any other party to ignore their findings.

"Governments sometimes have disagreements with advisers, and there can be quite good reasons for not accepting expert opinion," he comments. "I'm not saying it's defensible, but it's perfectly common and a pretty permanent political thing. We are also currently in an unusual period, with ministers not able easily to bind their successors into long-term plans. If the government were rushing through all the long-term planning it could and trying to bind it in concrete, there would soon be opposition."

In terms of what happens after the general election, Dunleavy believes a hung parliament would be good and a coalition government better for evidence-based policy-making: "A minority government cannot pass legislation without the parliament's agreement, for which it need consensus and a strong, legitimising consulting process to get everyone on board.

"Two parties working together will mean several commissions and committees, plenty of focus on detail, and no strong ideological ability to resolve everything along party lines. To avoid mistakes and running an ineffective government, they will consult more and adopt things that work well."

How to fund, govern and run a hybrid organisation

Mon, 01 Mar 2010 12:41:43 GMT

Many organisations that are not directly owned and run by government deliver public services or have public service remits as hybrids, but how efficiently are they run?

Author and economist John Kay wants public sector leaders to think more about hybrids. He is not talking about breeding animals or plants; nor about the new-generation petrol-battery vehicles.

Kay's hybrids are organisations that deliver public services, with business management skills, but whose functions are of a broad public interest concerns and with revenues not normally earned in competitive markets.

Kay's examples include universities, Network Rail, the electricity and gas infrastructure networks, Channel 4, housing associations, contracted-out public sector providers and Transport For London. Delivering the recent NHS Confederation Foundation Trust Network Lecture, Kay outlined how hybrid organisations all have different governance, capital structures and regulatory arrangements.

Quality, management, governance and regulation
The governance of hybrid organisations, Kay says, is not merely central to issues of output quality. Output quality depends on management, which depends on governance, which depends on the regulatory framework.

We have, Kay adds, invented these arrangements from scratch each time, creating new governance structures, financing and regulatory arrangements for each new body without learning from previous successes and failures. He suggests that "the way we deal with hybrids is perhaps the fundamental public policy issue of our time".

The role of the state
Kay suggests that the state's major role today is about providing a variety of economic services. The state has thus become an economic agent like any other, providing health education and economic and physical security. Services and goods are provided through a public agency and sometimes by hybrids, rather than through private competitive markets.

Changing public attitudes to state-hybrid provision
We have, Kay adds, come quite a long way in thinking about governance, finance and management issues of hybrid organisations - but we still think about state activities through the prism of processes, rather than outcomes.

Objectives of hybrid institutions include:
* to distinguish the control and availability mechanisms for semi-commercial organisations from those associated with process and propriety

* to give professional management responsibility and autonomy in day-to-day decisions, removing those decisions from second-guessing (which he dubbed "meddling without responsibility") and direct political accountability

* to combine this with meaningful accountability for both output quality and financial performance over a medium-term period

* to affirm that the purpose of limited financial autonomy is to reinforce managerial autonomy not to support 'funny financing' such as PFI (attractively bringing in private sector project management) or financial services

* to prevent capture of the organisational structure by particular interest groups, which tend to be employee interest groups with a large veto over management activities

Outcomes, not processes
Kay concludes that successful hybrid organisations must find a challenging balance between offering short-term autonomy (at every level, from chief executive to employee) with medium-term accountability for performance. In almost all public sector activity, delivery relates to overall organisational performance, and can rarely be reduced to a simple list of metrics.

The complex objectives we seek from hybrids mean that we must develop difficult and complex judgments of the quality of outcomes in economic terms for the public sector, as opposed to our previous measures of the quality and propriety of processes.

Andy Cowper is the editor of Health Policy Insight

Shared ownership? Yes please

Wed, 24 Feb 2010 15:13:14 GMT

Ken Hesketh from Benenden Healthcare Society, a mutual organisation, welcomes the trend back towards shared ownership, but wonders why it ever went out of fashion in the first place

George Osborne's comments last week on Conservative plans to give public sector employees the chance to form co-operatives to run public services, strengthens opinion that shared-ownership and mutuality is back in vogue.

The role co-operatives and mutual organisations, like ourselves, can play in providing and funding such services is not widely acknowledged and, given our heritage of mutuality, we believe this role needs to be expanded.

We welcome the current policy debate around shared ownership.

The nature of shared ownership is numerous and varied. It can be described best through three main definitions which relate directly or indirectly to the financial stake an employee is offered. These are: 'employee ownership,' 'co-ownership,' and 'employee share ownership. '¹

Each definition is characterised by the amount of control the collective employees hold within a business. It is measured on a sliding scale, where more than 50% of employees have a vested interest it is classed as employee owned. John Lewis is a well known example of an organisation adopting this approach. When a substantial yet minority stake is held (more than 25%) it is known as co-ownership and if equity share is minimal, employee shared ownership applies.

All of the above are based upon seven principles of co-operation, which include open and non-discriminative membership; independence and democracy of member voice and a commitment to foster their member community.

Research has shown that companies experience a productivity boost when a shared ownership model is introduced. The model positively impacts staff turnover, absenteeism, company loyalty and performance - as employees have more motivation to succeed. This is best achieved when the culture of ownership is marked by active involvement within the decision making process, where the collective voice is heard.

Every member has a role to play

Regardless of job title, every member has a role to play. It is critical that the concept of shared ownership, and all that entails, is adopted at board level. Board members must recognise their responsibility to embed this culture from the top-down. This means regularly engaging with staff, having an awareness of employee-related concerns and critically listening to the collective voice. If this is successfully achieved it can be implemented company-wide.

Managers will also become accountable to staff via the democratic process. Human resource personnel will be responsible for encouraging staff participation and implementing channels for regular engagement, with the wider workforce. The knock-on effect will create a culture of transparency and enable all staff to participate in making day-to-day decisions. Only then can shared ownership be measured as a true success, epitomised by effective partnership working, good communications and above all real teamwork.

As we approach a general election, it is hardly surprising that politicians are looking at shared ownership as a solution to reducing central government support of the public sector and improving efficiency and productivity of frontline workers.

What ministers must remember is translating theory into practice - introducing a new system of working in the public sector - poses a number of stumbling blocks.

Pension schemes

These include implications on receipt of state-funded pensions. Should the organisational nature of public sector change, for example, what impact will this have upon workers access to existing and new pension schemes? In a workforce that is characterised by longevity of service, pension provision is key incentive in public sector recruitment and retention.

Likewise the varied types of contractual agreements offered by the sector could become problematic. Temporary, part-time and flexible working contracts will need to be reviewed in regards to equity share in the business in comparison to full-time employee stake. Can this be achieved without undermining the principles of co-operatives?

There are also real issues around raising capital. Employees must feel that shared ownership is an attractive investment. If the public sector is to be sustained through reduced central funding, opportunities to raise capital must be provided. In the US this has been successfully achieved by the introduction of tax measures that exempt company owners from paying capital gains if they sell more than 30% of their business to employees.²

As a mutual organisation ourselves we recognise that moving towards a shared-ownership model offers many benefits in terms of service quality and efficiency and a collective concern for custody and investment in the organisations assets.

In our case it also offers the potential to generate additional funds for healthcare. While the model may never replace tax funded provision of public services it certainly offers the potential of significant supplementary funding which could be harnessed to improve the quality of public services for everyone.

Ken Hesketh is chief executive of Benenden Healthcare Society

Footnotes

¹Employee Ownership Association, 2007

²NHS Mutual – engaging staff and aligning incentives to achieve higher levels of performance, by Jo Ellins and Chris Ham

Ethnic minorities press for a fairer deal in public sector

Jane Dudman — Wed, 24 Feb 2010 11:10:41 GMT

Britain's ethnic minority community is represented at the highest level in other walks of life, such as law, the arts and banking, but when it comes to public sector bodies there is a woeful lack of diversity, a new taskforce claims

Ethnic minority leaders in the UK have criticised the government's implementation of diversity policy on public appointments.

At a recent meeting supported by Cemvo, a charity committed to extending opportunities to people from disadvantaged communities, leaders from a wide range of public, private and voluntary organisations concluded that while the government's policy on diversity is good, its delivery has been poor and glass ceilings remain in place that make it hard for women and those from black and ethnic minorities to rise to the highest levels of leadership in the public sector and on public bodies.

"Britain's ethnic minority community as a whole, has a wealth of talent, skills and experience that it can bring to improve efficiency, effectiveness and value-for-money in the provision of public services", comments Dilip Joshi, leader of the Hindu Council UK taskforce, which recently launched its strategyon public appointments.

"By organising this event, we are actively seeking the participation of political leaders, the civil service and public sector organisations themselves in an open dialogue and constructive development of plans to improve black and ethnic minority representation at the highest levels in the sector.

Hindu Council taskforce

The Hindu Council's taskforce has made a number of recommendations to the Government Equalities Office and the Cabinet Office on ways to increase representation of women and those from a black and minority ethnic background in the public sector and on public bodies, including a complete stop of all five-year appointments, a limit on public appointments positions that an individual can hold to a maximum of two roles concurrently; and legislation to bring all public sector appointments, rather than the present level of 30%, under the regulation of the Office of the Commissioner of Public Appointments.

Diverging views were expressed at the event about the best way to tackle the continuing problem of ensuring greater diversity across all public services. Keynote speaker Baroness Sandip Verma acknowledged that a glass ceiling does still exist in Whitehall and on public bodies, but exhorted those from a minority or ethnic background to work together and improve opportunities for the whole community.

Deepti Patel, a trainee solicitor and trustee of the Interfaith Youth Trust, said that while the glass ceiling was being broken in the private sector, it was still firmly in place in the public sector. "It has taken time, hard work and legislation but both men and women from our community have broken through the glass ceiling in the private sector in this country," she said. "We have members of the community as celebrated authors, academics, economists, actors, artists, senior post holders in banking and financial institutions, board members of FSTE100 companies, GPs, consultants, engineers, accountants, lawyers, pharmacists, musicians, and members of both houses of parliament."

In comparison, she said, "senior public appointments have been blocked from experiencing the same levels of growth in diversity".

Jane Dudman

Top mandarins add their weight to Better Government Initiative

Wed, 27 Jan 2010 12:26:52 GMT

Former senior civil servants criticise Labour's style of government under Tony Blair and call for more scrutiny and an end on reliance of political advisers

Former senior mandarins and an influential group of six former permanent secretaries, including Lord Butler of Brockwell, the former cabinet secretary, and Sir John Chilcot, who is currently chairing the Iraq War inquiry, have put their name to The Better Government Initiative report published today which calls for an end the government's reliance on political advisers to develop policy, bypassing experienced civil servants.

The report is also backed by other former permanent secretaries Sir Richard Mottram, Sir David Omand, Sir Nicholas Monck and Sir Geoffrey Chipperfield.

The charity's study, Good Government: Reforming Parliament and the Executive, criticises Labour's informal style of policy making which emerged under Tony Blair and calls for a more formal way of governance.

Recommendations include a new Parliamentary Resolution to set out in writing how laws should be vetted thoroughly by Parliament. MPs and the media would be expected to hold the government to account if ministers abused it.

It also calls for an explicit Cabinet code of conduct, monitored by the cabinet secretary, to ensure that the entire Cabinet is consulted when important policy are being agreed.

The report also recommend that ministers should be made more accountable to MPs by strengthening the role of Parliament in scrutinising the government's work.

Sir Christopher Foster, the chairman of the Initiative, expressed his concerns about ministers use of special advisers to develop policy at the same hearing.

He criticised a "tendency for some ministers to engage in policy-making with their political and media advisers while leaving subsequent implementation to their civil service and other public servants".

Last week a separate report from the independent Institute for Government, based on evidence from 60 Whitehall figures, said there was no "single coherent strategy" and urged reforms.

The independent charity warned that ministries are not "coordinated as effectively as they should be". But the Cabinet Office said government departments work closely together.

Held to account

Mon, 25 Jan 2010 11:59:41 GMT

Seven years since its inception, the Centre for Public Scrutiny sees its role as a watchdog becoming increasingly important. Away from the headlines much of the centre's work is with local councillors and this week it launches its Good Scrutiny Awards

Over the past 12 months, issues around accountability and scrutiny have been almost constantly making media headlines.

Stories about the running of Parliament, the safety of children, the quality of hospital and care services and the way our money is invested have all demonstrated the need to strengthen and support effective scrutiny and accountability.

The Centre for Public Scrutiny supports anyone with a formal 'non-executive' role to hold decision makers to account in the public sector. The words of broadcaster Jeremy Paxman, who opened our first annual conference seven years ago, still hold true – "there is a perfectly acceptable alternative career in public life and it is the job of holding powerful people to account".

Much of the centre's work is with local authority councillors serving on overview and scrutiny committees. They are an important part of a wider "local accountability framework" that also includes the public and communities (either as service users or taxpayers and very often both), and people or groups with a role in relation to particular services, such as NHS Foundation Trust patient governors, Local Involvement Networks or parent governors on school governing bodies.

There are opportunities for each of these parts of the framework to 'have their say' about the way services are planned and delivered.Local councillors on scrutiny committees have very wide ranging powers to hold their council executive to account and scrutinise crime and disorder and health matters. They can also look at how partner organisations are working towards achieving Local Area Agreement targets. At a national level, MPs on parliamentary select committees scrutinise the work of government departments and hold ministers to account for policy direction. Inspectors and regulators work across the country to check that local performance and outcomes meet expectations.

Good Scrutiny Awards

Our Good Scrutiny Awards (see more information on our website) help to celebrate the achievements of these non-executive and also highlights that 'accountability works'. Our awards have grown from strength to strength and with our 2010 awards opening this week we are now encouraging individuals, groups or teams, organisations and partnerships from across the public sector to submit any entry.

This year's awards will promote accountable public services, they will celebrate the work of 'non-executives' in the public sector and also recognise public sector organisations that respect the work of non-executives.

Previous winners have found that receiving an award has raised the profile of their work: "A key component of the work for which we won our award was the effectiveness of joint working with our partners in the community and voluntary sector," says Lynne Margetts, service manager for scrutiny in the London borough of Harrow.

"By acknowledging the effectiveness of the engagement with third sector colleagues, the award has strengthened this partnership and at the same has highlighted the profile of scrutiny and the contribution it can make to service improvement."

Simon Harper, scrutiny support team leader at Gloucestershire county council, says winning the scrutiny chair of the year award and being part of the winning entry for health scrutiny has done much to raise the profile of scrutiny in Gloucestershire.

"Through coverage in the local media the public are becoming aware of the important role of scrutiny in holding public service providers to account," he comments. "Our award winning scrutiny chair, councillor Andrew Gravells, has been invited to events throughout the country and is spreading the word that scrutiny done well can really add value and make a difference for local people."

We think most people and organisations will have done something in the last year that they are proud of and we look forward to receiving this year's entries.

Tim Gilling is executive director at the Centre for Public Scrutiny cfps.org.uk

Concern over Cadbury's charitable roots

Jo Adetunji — Mon, 25 Jan 2010 09:37:00 GMT

Kraft's take over of Cadbury has not only raised fears of job losses, but also the future of its considerable charitable arm, the Cadbury Foundation. Will the US food giant honour the founder's Quaker ethos and continue its social and economic responsibility?

For a company founded on a Quaker ethos and which its chief executive described last year as "principled capitalism," the takeover of Cadbury by Kraft has left many concerned about the US food group's commitment to a proud tradition of social and economic responsibility.

While the spectre of potential job losses hangs in the air, another area of possible concern is the impact of the takeover on the company's charitable arm, the Cadbury Foundation, which is funded by the company via an annual donation.

Although the £9.6m given to non-profit making causes by Cadbury's companies in 2006 – accounting for more than 1% of Cadbury's pre-tax profit – dwarfs the near £1m the foundation spends, it supports organisations including the environmental regeneration charity, Groundwork, and Young Enterprise, an educational charity linking schools with business.

While some of the Cadbury Foundation's recipients are circumspect over what a takeover might mean, it raises a question mark about what steps and buffers have been put in place to protect a linked trust or foundation from changes taking place on the business side of a company.

According to a recent survey by the Charity Commission, there are an estimated 8,800 trusts and foundations in the UK, with the top 500 grant-makers spending around £2.7bn a year, providing around 10% of charity sector income.

Some corporate trusts and foundations, like the Cadbury and Vodafone foundations, depend on annual donations – often linked to profits – and therefore affected by a company's financial performance. So while setting up a foundation requires the body to be legally independent of the company, the amount injected into it following a merger, takeover or collapse, may be another matter.

"The charity itself has to be independent and any decisions made for the benefit of the charity," says a spokeswoman from the Charity Commission.

"Depending on the relationship … if a trust gets a certain percentage of a company's profits then it's income could go up or down."

Northern Rock Foundation

In 2008 the Northern Rock Foundation (NRF) - Northern Rock's charitable arm and one of the UK's largest corporate funders, announced cutbacks to grants made up from 5% of the bank's annual pre-tax profits.

The foundation has spent almost £200m on community centres, welfare organisations and arts groups, since its inception in 1997, many of whom also rely on its expertise.

The government deal that guaranteed an annual sum of £15m for three years meant many recipients of the foundation were shielded from the full brunt of the Northern Rock crisis.

Andy Beeforth, director of Cumbria Community Foundation, which receives significant funding from the NRF, said: "We've continued to receive grants and most recently £100,000 was put into our flood recovery appeal. Further discussions will need to be undertaken to renew funding- it's a very significant source for us."

Sometimes trusts break links to a company despite original funding. The Barrow Cadbury Trust, a charitable foundation set up in 1920 by Barrow Cadbury and his wife Geraldine, provides grants to grassroots voluntary and community groups in deprived communities in the UK- particularly in Birmingham and the West Midlands.

Funded through interest on an endowment from Cadbury, the trust was made a separate entity 90 years ago. In 2008-9 the trust awarded just over £2.5m in grants to 63 organisations and projects.

The trust recently completed a two-year study into poverty in Birmingham, which found that 13 of the city's 40 council wards were still seriously deprived despite significant investment in the area.

One issue tackled by the report was the impact of job losses from closures of manufacturing firms in the area – including giants HP Sauces and MG Rover.

Any future job losses from the Kraft takeover are still uncertain but also if the company will cut, continue or extend Cadbury's charitable commitments.

"The takeover by Kraft is not necessarily a bad thing," said Beeforth. "[They] may have more money to put in."

Jo Adetunji

Train to Gain needs more fiscal control

Thu, 21 Jan 2010 11:04:54 GMT

Public accounts committee has uncovered 'serious weaknesses' in the way programme has been managed - despite a good response from employers

While the Train to Gain programme, set up by the Department for Business, Innovation and Skills (DBIS) and the Learning and Skills Council (LSC), has delivered a more flexible approach to training to meet employers' needs it could still be better managed, says a report by the public accounts committee (PAC).

In its recent report to MPs, the committee looked at how the two departments can get a firmer grip on demand and spending, to increase the effectiveness of training, and how the programme's efficiency can be improved.

By July last year, 1.4 million learners had been supported, and around 200,000 employers had staff involved in training through the programme. Most learners have benefited and some employers have reported business benefits.

But the PAC report has uncovered serious weaknesses in the way the programme has been managed by the LSC, an executive non departmental public body of the DBIS. It started badly with over-ambitious targets, it said, and under-spending in the first two years as the programme failed to sufficiently expand demand for, and supply of, training.

Conservative MP Edward Leigh, chair of the committee, said: "Despite providing work-based training for around 5% of the workforce, the Train to Gain programme has been mismanaged from the outset. In the face of evidence of what was achievable, targets for the first two years were unrealistically ambitious. The number of learners, the level of demand from employers and the capacity of training providers were at first all overestimated.

"By the third year, demand for training, fuelled by substantially widened eligibility for the programme and by the recession, had increased to the point where the programme could no longer be afforded. Funding to training providers has been stop-start, with many now having to run down the capacity they had been encouraged to build up. Employers with new requirements are being turned away."

With expenditure on Train to Gain totalling almost £900m last year, Leigh said: "What must happen now is for spending to be brought under control. In the light of experience gained over the last three years of what courses and qualifications have proved most valuable, funds need to be directed at the training and sectors with the most acute needs, and the training delivered by the best quality providers."

A strong Cabinet Office is good for government

Jane Dudman — Tue, 19 Jan 2010 13:19:00 GMT

Under Gordon Brown the sofa style of governmemt may have gone, but there is still a 'strategic gap' between No 10 and senior civil servants with a strong argument to increase the powers of the cabinet secretary

In the run-up to a general election, it is not just politicians who set out their stall. Yesterday's report from the Institute for Government was a major salvo in the battle about how government itself should be run.

Senior civil servants, though of course unable to comment directly on such matters while in the job, have made little secret of their dislike for the sofa cabinet style of running the country introduced by Tony Blair.

Senior civil servants, such as former cabinet secretary Lord Andrew Turnbull, have been forthright in their criticisms and the Chilcot inquiry into the Iraq war is once again shining a light on the relationships between public managers and their political masters.

The report identifies a "strategic gap" at the heart of the government - the relationship between No 10, the Cabinet Office and the Treasury.

Its answer, by and large, is to strengthen the powers of the Cabinet Office and, by extension, those of the cabinet secretary. The Cabinet Office has progressively become the central department for civil service management since the 1980s and the present holder of that post, Sir Gus O'Donnell, has exercised increasing power over departments, through mechanisms such as the capability reviews, which monitor the performance of Whitehall departments.

But the report says the cabinet secretary's powers remain "somewhat informal". The cabinet secretary does not, for instance, legally employ permanent secretaries - that is the secretary of state's role. Professor Colin Talbot, professor of public policy and management at Manchester Business School, points out that any change to the constitutional relationship between departments and ministers might well be resisted within departments. "There has always been this problem," he says.

Whitehall is changing - yesterday's survey published by the Cabinet Office, on the socio-economic background of the top 200 civil servants, is one sign of that. The modernising tendency want both more change and a consolidation of power, if possible out of the hands of politicians and into the realm of the professional manager. Hence the emphasis in the institute's report on the need for a "strategic" plan for government.

How that would work in practice remains open to discussion. Take technology, for instance: the report says there should be a central body, able to intervene when there is a strong case for greater standardisation of computer systems.

But, as Public's sister site, Kable, points out, the report also acknowledges the problems of such a course - efforts to do exactly this have been undermined by competing priorities and resistance within departments.

Jane Dudman

When financial prudence left the building

Wed, 13 Jan 2010 09:03:00 GMT

As the fall out and recriminations of what went wrong with Britain's economy continue, the argument has now shifted as to whether it's the Treasury or the system that needs salvaging

Lord Andrew Turnbull, former permanent secretary at the Treasury and former head of the civil service, wrote a very Sir Humphrey-esque piece for the Financial Times this week about how to 'salvage' (his word) the Treasury.

The first point is that Lord Turnbull fails to explain why the Treasury need salvaging in the first place.

As our principal economics ministry, the Treasury completely failed to spot the risks involved in the huge asset bubble price and credit over leverage that put our financial system in peril of complete collapse.

Just a small oversight?

As our finance ministry, the Treasury allowed the structural deficit in the public finances to gradually accumulate during the boom years, which has made the subsequent fiscal crisis much more acute than it needs to have been. Prudence had definitely left the building, an error for which we will all be paying for some years to come.

The Treasury's reputation for economic and public financial management is, frankly, in tatters which is why it needs 'salvaging', although Lord Turnbull is of course too polite to say so.

But his lack of diagnosis is not just a considerate oversight, it fundamentally weakness his prescription – which is essentially more of the same, but bigger and better.

Of course, the civil servants who run the Treasury can't take credit for all of the shambles – their political masters did their bit too. Gordon Brown and Ed Balls, in particular, were the architects of the system and approach that helped create the conditions for today's crisis.

But it doesn't appear there were very many mandarins in the Treasury 'speaking truth unto power' when this was happening either.

Lord Turnbull's prescriptions are all about strengthening the Treasury, with one exception – his acceptance of the Tory idea of some sort of office of budget responsibility (rather than Labour's proposed fiscal responsibility bill) to monitor fiscal policy and keep the Treasury and the government on the right path in good times as well as bad.

Ironically this idea, and the fiscal responsibility bill, address the right problem but neither really supplies the correct answer. The problem is the one-sided, unchecked, some would say unhinged, system that allows HMT to drive public finances almost totally free of any checks and balances.

Notionally, of course, parliament provides the check through authorising of tax and spend decisions, but in practice parliament rarely, if ever, exercises this power.

Unlike most other legislatures – in both presidential and Westminster-style systems – our Parliament does not really scrutinise tax and spend decisions except retrospectively (by which time the damage has usually been done).

The first move should be to radically overhaul parliament's role in public finance decisions. The fiscal responsibility bill, now before parliament, gives it a role, for the first time, in authorising medium term tax and spending plans, which is welcome.

But it does not address the central issues that have been raised by the Hansard Society, the parliamentary liaison committee (the chairs of all the select committees), and others for years: the whole supply system needs modernising and democratising. It is time to make the Treasury properly accountable to Parliament.

I know from numerous exchanges with Treasury officials over the years they will resist such changes tooth and claw. I have suggested a number of times that the multi-year spending review system, introduced by Labour in 1998, provided an ideal vehicle for a whole new process.

Draft spending plans could be published and parliament as a whole, and especially the select committees, invited to scrutinise, invite evidence and opinion, and debate the proposals. The Scottish parliament manages such a process on an annual basis; it would not be too difficult to do on a two - or three-yearly cycle.

But every time I have floated such ideas within earshot of Treasury mandarins they have gone into a hissing fit. They much prefer the behind closed doors, all will be revealed when the red box is opened on Budget day, approach – or what two American academics memorably called "the private government of public money".

There is no certainty that more open scrutiny by parliament of spend and tax decisions would have prevented the structural deficit-problem that accumulated over the past decade and has now exploded in our faces, but it has more chance and much greater legitimacy than some unelected quango being asked to do the job.

Colin Talbot is professor of public policy and management at Manchester Business School and a former specialist adviser to both the Treasury and Public Administration select committees

Audit Commission: Triangular approach to assessment is working

Jane Dudman — Mon, 11 Jan 2010 09:33:00 GMT

While it has come under fierce criticism from some authorities, and the Tories have already threatened to abolish it, comprehensive area assessments have boosted local accountability - says the Audit Commission

As we begin the countdown towards this year's general election, a growing number of battle lines are being drawn on the supposedly neutral territory of public services.

Last week, Jonathan Baume, secretary of the FDA union for senior civil servants, warned the government about using civil servants to cost opposition politics, and the scrutiny of local government performance is becoming increasingly politicised.

Next week, the chairman of the Audit Commission, Michael O'Higgins, will praise the impact of a "triangle" of local oversight at a conference on the first round of the watchdog's new comprehensive area assessment of councils, which the Conservative party has said it will abolish.

O'Higgins is set to tell delegates that the combination of area scrutiny, with the emphasis on outcomes, rather than the inner workings of councils, together with theOneplace website and the government's Total Place project to tot up spending across specific regions, has formed a triangle of initiatives that is boosting local accountability.

The speech is a strong defence of the CAA approach in the run-up to a general election. The commission's new website, Oneplace, which gives the results of the organisation's new scrutiny regime for local government, has notched up more than 1m hits since it was launched last month, but publication of the results led two Conservative-led councils, Wandsworth and Hammersmith and Fulham, criticising CAA for requiring excessive demands in terms of the councils' time and finances.

Fighting for Hertfordshire

This month, another attack on the new regime came from Robert Gordon, the leader of Conservative-led Hertfordshire county council, in a message to the county's residents. Overall, says Gordon, the commission's report on the county is "very positive", but it concludes that Hertfordshire is not doing enough to plan for additional housing in the county. Gordon's response? "If fighting for Hertfordshire's character and the well-being of residents results in a ticking-off from the Audit Commission, then so be it," he writes. "We're here to stand up for the people and communities of Hertfordshire."

Gareth Davies, the Audit Commission's managing director for local government, says some form of political attack over CAA is "inevitable, particularly given where we are in the cycle", but says that overall there has been a varied set of reactions to the new regime and support from a wide range of local authorities, including Conservative-led Westminster.

"The question is whether this [CAA] is in the public interest, what it costs and how it can be developed so that we can get more and more out of it," comments Davies.

"Anything that poses a challenge to the existing way of delivering services is potentially a challenge to those leading such services, but we think the big breakthrough here is the public accessibility to information.

"We have had a lot of interest that suggests there is a public appetite for this. I'm not claiming we have got everything right in all aspects this first time, but we are adjusting the system all the time and we are listening to what people are saying, so we are not in defensive mode. We think this is a big step forward."

Jane Dudman

New highway code brings improvements

Thu, 07 Jan 2010 10:14:36 GMT

The public accounts committee hears of a vast improvement in maintenance projects on the nation's motorways, but is concerned that the Highways Agency is still not obtaining best value for money from contractors

While travel on the country's motorways has become less stressful for many motorists due to improvement in the Highways Agency's maintenance work, there is still concern about value for money.

The Committee of Public Accounts (Pac) has examined the extent to which the Agency is an informed customer and is challenging contractors to deliver value for money and better outcomes for road users and for those who work on the network.

It found that in many respects, the Agency's letting and management of maintenance contracts, known as 'Managing Agent Contractor' (MAC) contracts, is not a bad story.

The contract largely follows best practice and offers the potential to secure value for money, Edward Leigh, chair of the committe, told MPs.

Since its introduction, he says, in his report out today, there has been greater certainty over delivery of maintenance schemes within budgets and to timescales. Journey time reliability on the strategic road network has steadily improved since summer 2007 and the timing suggests that Agency interventions have contributed to the improvement.

There are still some serious shortcomings, however, which put value for money at risk. In particular, the Agency lacks basic facts about what it gets in return for taxpayers' money and by how much the costs of some items such as road resurfacing have increased.

Drive for efficiency

The committee found that it has failed to exploit cost information to benchmark prices and drive efficiency improvements, and has lacked the quantity surveying and commercial skills required to manage the contracts effectively. These shortcomings are especially worrying given overall increases in costs and the wide variability of costs between areas.

"The Highways Agency's planned highways maintenance work has probably contributed towards the recent improvement in journey time reliability on the strategic road network. It is the value for money of the Agency's spending on such maintenance that is in serious doubt," said Leigh.

"The basic point is that the Agency does not know enough about what it is getting for the taxpayers' money it spends on maintenance across its whole network. Without a better understanding of the costs of network-wide activities - such as resurfacing - it cannot hope to drive those costs down.

"The extent of the variation between different Agency areas in the unit costs of particular types of maintenance jobs is of concern to this committee. We expect the Agency to find out why it is spending substantially more in one place than another and whether the differences are justified. The ordinary taxpayer would not hesitate to challenge prices for jobs on their own homes, when higher than expected; the Highways Agency should be no less vigorous in challenging its contractors"

While competition for road maintenance contracts appears to be holding up, Pac warned that there is a risk that the Agency is too reliant on the procurement stage to deliver performance improvements rather than through the proactive management of contractors during the term of the contract.

Japan opts for UK model of public sector reform

Thu, 07 Jan 2010 09:33:00 GMT

Treasury's influence in making departments reach set performance targets is just one of the ideas to be copied by Japan as they ditch US-style performance and results scheme when new reforms are introduced in March

The Japanese government is planning major public sector reform in 2010, including implementing cross-government goals, similar to the UK's public service agreements (PSAs), in order to encourage inter-departmental cooperation.

The Democratic party, which came into power in Japan last year, has commissioned a report examining how cross-government cooperation has worked in the UK, Canada and the US.

The report, due out in March, is expected to recommend that Japan adopt performance measures and a multi-year public sector budgeting system similar to that which exists in the UK.

Since 2001, all Japanese government departments have been obliged to evaluate their own policies, using a system similar to the Government Performance and Results Act (GPRA) in the US. But the officials have agreed this system is not suitable. Departments have little incentive to evaluate their policies seriously and see evaluation as a burden, involving extra paperwork for little result.

Last October, the government decided to review the existing evaluation system and put in better links between evaluation and budgeting. As part of its overhaul of the present system, it is looking at the way the US, Canadian and UK government have attempted to link performance management and results in the public sector.

Masamichi Takasaki, a senior analyst with the public management group of Mitsubishi UFJ Research and Consulting, which is preparing the report for the government, says the Japanese government is particularly interested in both multi-year budgeting and inter-departmental performance management.

Takasaki has talked to several UK government departments, including the Cabinet Office, the Treasury and the Department for Work and Pensions, as part of his research. His conclusions are interesting for government-watchers in the UK.

Takasaki believes the strength of the Treasury is a real incentive to getting departments to reach set performance goals, but also sees the scrutiny role of MPs as a vital part of the evaluation process.

He says that in contrast in Japan there is little looking back over the success, or failure, of previous policies when new initiatives are implemented.

At a time when the UK government is keen to emphasise its credentials in continuing public sector reform, Japan is set to follow its example through the sincerest form of flattery, imitation.

The Japanese government is likely to implement many of the budget controls included in the PSAs as well as inter-departmental, outcome-based objectives, along with a greater emphasis on communicating policy intentions with the public.