Modernising Government (Non-departmental Public Bodies)
I thank my colleagues and the civil servants who have worked enthusiastically and energetically to bring the review forward to the statement today.
Labour came to power in 1997. Between the end of that year and the publication of our discussion paper, the number of quangos in Scotland fell from 242 to 183. In November last year, the First Minister promised further radical action on quangos, and today, I am announcing the conclusion of the review that resulted. In the past two years, the Scottish Parliament and the Scottish Executive have transformed the accountability and democratic control and scrutiny of Scotland's public services. Our colleagues in local government are in the midst of a process of modernising their own structures and approaches to their work. It is in that context that I am reporting today on our review of non-departmental public bodies.
Public bodies have a long history in Scotland. Many have played important roles in advising Governments and delivering services. Their members have, over the years, provided valuable public service and contributed substantially to the well-being of Scotland. In the new context of devolution, questions have rightly been raised in public and political discussion about their representativeness, accountability and openness.
Scotland's 183 public bodies are immensely diverse and only a case-by-case review could properly determine their relevance and utility in their new context. Our review has asked many questions. Why do those bodies exist at all? What does each body do and is its function still needed? Are some bodies doing things that could now be done better by other organisations, or indeed things that no longer need to be done? Do the remits of some bodies overlap with those of others? Have some bodies outlived the circumstances for which they were created? Our review has acknowledged the complexity of those questions.
Fully two years into devolution, and with 183 quangos of varying ages and remits to consider, the decisions that I am announcing today represent a further major step forward in modernising the way that Scotland runs itself.
In January—had I been allowed to make my statement, Presiding Officer—I would have proposed a clear set of principles for the running of devolved government services in the new Scotland. The report that we are publishing today embodies nine tests that reflect those principles and which will provide a proper framework for our approach to public bodies in future. Among other requirements, those nine tests will mean that quangos will be retained or established only if they have a distinct role to play and functions to perform that cannot be carried out at least as effectively by any other organisation; if they are clearly accountable to ministers and the people whom they serve for the functions they perform; if they are able to work in a joined-up way with other organisations and are able to draw new people into the processes of government; and if they are properly run, efficient and effective, and deliver value for money.
I promised in January to abolish the bodies that failed the test of those principles. Again, we are delivering. Today, I can announce the abolition of 52 quangos—that is almost a third of all Scotland's public bodies. For example, the water authorities will be merged into a single, accountable water authority, and the Scottish Hospital Trust will be abolished, as will the Scottish Conveyancing and Executry Services Board and the Scottish Valuation and Rating Council. The Scottish agricultural and biological research institutes, which perform no public service or central Government function, will cease to be quangos, and the 43 separate board structures of health boards and trusts in NHS Scotland will be rationalised into only 15 new NHS boards. Another 61 of our public bodies—again, a third—have been specifically identified in the review for further and more fundamental scrutiny by Executive departments, with a presumption in favour of abolition.
The action to modernise government cannot and should not simply be about numbers. It must also ensure that those public bodies that remain operate more effectively and are more appropriately accountable to ministers, to Parliament and to the people of Scotland. They must become more open and more representative. Today, we are again delivering. Public bodies, properly structured and in the appropriate circumstances, have an important role to play in the new Scotland. They carry out important functions on behalf of the Executive or advise the Executive in a variety of ways.
We are abolishing almost a third of all quangos and further scrutinising another third with an intent to abolish them, but we are also radically reforming those quangos that remain. To carry out that radical reform, we plan action in four key areas. First, we are fundamentally reforming the appointments process. We will actively seek out candidates, rather than simply inviting applications, to ensure that a representative cross-section of the Scottish community serves on and runs Scotland's public bodies. We will also give the standards commission the power to oversee ministerial appointments.
Secondly, we are modernising the way in which board members are trained, supported and paid. All board members will be given the induction and training that they need, and an Executive unit will advise ministers on the proper rate for the job.
Thirdly, boards will be made more open, accountable and effective. Their meetings will be open to the public and summary reports of meetings will be made available, unless there are good reasons why they should not be. Boards will implement fully the Ethical Standards in Public Life etc (Scotland) Act 2000. To ensure compliance with those points, ministers will issue guidance on the circumstances in which they may intervene or use their powers of direction.
Fourthly, we are redefining the relationship between the Executive and quangos to ensure that they work, where appropriate, to the Executive's agenda. We will make publicly available the explicit guidance for quangos, so that they know, understand, and implement ministers' priorities. The guidance will cover expectations on outcomes, monitoring and general intentions.
Our review of public bodies is an important further step in a process that began just over two years ago with the establishment of the Parliament. As a result of the review, our remaining public bodies will be fewer in number and fit for purpose in 21st century Scotland. They will do a job that needs to be done and that can be done best by a public body. They will be clearly accountable to ministers and to the people whom they serve. They will be effective and properly run, and will deliver value for money. They will be able to work in a joined-up way with other organisations such as local government, the private and voluntary sectors, and the Executive itself. They will also be fully representative of the diversity of Scotland's communities. As the First Minister said in November, there are high expectations of Parliament and there should be high expectations of the remaining quangos.
Our review acknowledges the achievements by public bodies in the very different circumstances of the past. The conclusions of our review are clear and practical and its principles will serve us well in the future.
The review's recommendations are detailed and will require major and time-consuming administrative and legislative action. As members are aware, the Executive has a full legislative programme until May 2003. Unfortunately, there are substantial difficulties in finding time to implement our proposals, but the Executive has identified administrative action or legislation that will be completed by May 2003 for 46 of the 52 bodies that are to be abolished. That will abolish all but six of the bodies concerned. We wish to go further than that. We intend to introduce an omnibus bill in September 2002 to abolish the remaining six bodies. That means that all the bodies that we propose to abolish will be gone within the first Scottish Parliament. With further departmental scrutiny to come, the review could result in at least a halving of the number of quangos in Scotland.
Devolution is the settled will of the Scottish people. Our actions today show that devolution continues to deliver the will of the Scottish people. Others would deliver fiscal deficit; we are tackling the democratic deficit.
A third of quangos will be abolished and a further third will be reviewed with intent to abolish. The remaining quangos will be fewer, fitter and fairer—that is the action that we have taken on quangos.
The minister will be able to say that devolution is the settled will of the Scottish people when they are asked whether they prefer devolution to the normality of independence.
I welcome the minister's positive statement, particularly given the difficulties, shall we say, that he endured when the topic was discussed in Parliament on 18 January. The SNP warmly welcomes the statement, but, as always, we have a number of questions for the Executive.
The review of quangos was narrowly focused. Many bodies remain under the authority of Westminster. Will the minister discuss with Her Majesty's Government the transfer of responsibility to the Scottish Parliament for any quango that has a function that is currently reserved, but which operates within Scotland? At least that would ensure that duplication—a concern that the minister talked about—would not occur. If the minister will not do that, what will the Executive do to ensure that Scotland and its Parliament have a direct input in the functioning of such quangos?
Annexe C of the Executive's "Review of Public Bodies" discussion paper asks:
"Could the Function be put under Local Democratic control?"
I regret that the minister has failed to answer that question. The absence of any detailed reference to the relationship between NDPBs and local government is particularly surprising given the Executive's recent consultation paper on the power of community initiative, which acknowledges the important strategic role of local government.
In "The Report of the Commission on Local Government and the Scottish Parliament", it is recommended that
"transfer to local government should always be considered in any review of other bodies delivering public services; and likewise where new services are developed, prior consideration should always be given to whether local government should be their vehicle, subject to consideration of efficiency and cost effectiveness."
Even the detailed advice from the UK Cabinet Office states:
"All options should be assessed equally on their merits and there should be no presumption at the start that any of the options is to be preferred over the others".
As local government is directly accountable and accessible to its citizens, does the minister agree that it is inappropriate that bodies that deliver local services should not be accountable locally? Has the minister fully investigated the benefits and merits of having public bodies held accountable by local government?
Not long ago, a general election took place in which the SNP stood on a ticket of independence and was thoroughly rebuked by the people of Scotland. If memory serves me correctly, the SNP was the only party in Scotland to have the number of its elected representatives reduced. That pains SNP members, so we will not pursue the matter.
I caught on one of the television monitors some of the earlier debate on Scotland's place in the world, and heard my newly elected colleague, Brian Fitzpatrick, give a reasoned argument about the incredible fetishism of the SNP in its desire to test every single aspect of policy in this Parliament through the prism of independence. In the context of an exercise that concerned trimming down the number of quangos, making them more open, accountable and fit for purpose, and ensuring that a much broader range of people serve on the bodies that represent Scottish culture, it is bizarre that Mr Gibson should focus primarily on whether we addressed independence as it relates, in some arcane way, to quangos.
Mr Gibson's focus is even more bizarre given that, at the start of the exercise, we invited views from everybody in Scotland, including the political parties. Strangely, no representations were received from the Scottish National Party about what it thinks we should do with Scotland's quangos or what the new terrain should look like. Even stranger is the fact that we received no representation about engaging in discussions with the UK Government about UK quangos that may have an impact on Scotland. It is strange that Mr Gibson should raise that issue in Parliament today, when he has had so much time to do so in the context of the review.
On local government, I would be interested to hear from Mr Gibson which quangos he feels should have been transferred—
On a point of order.
Members are not allowed to answer questions. The minister said that he would like to hear from me, but he is the one who is answering the questions. Regrettably, we are not allowed to come back.
We are listening.
If the toys are back in the pram, I will continue.
After the question-and-answer session, or at any point when he feels moved to do so, Mr Gibson could explain which of the quangos in Scotland should have been transferred to the control of local government, and in what way and when that should have happened.
Mr Gibson should take cognisance of the fact that today, as a result of the review, I have made clear our intention to abolish about a third of the quangos, while another third are being subjected to further scrutiny. The opportunity will exist during that scrutiny to make representations on whether the quangos in question should be abolished or subsumed within another quanqo, should come back into the Executive, or should have a closer relationship to local government.
The difficulty is that there are a large number of relatively small local authorities in Scotland. Finding a structure that fits the scale and role of quangos and the scale and role of local authorities is easier said than done. Having said that, my colleague the Minister for Health and Community Care has made substantial progress in the changes that are being made to the structures that oversee the role of the NHS. We have made substantial changes to the direction in which quangos are going, especially in trying to localise the accountability of quangos so that they are closer to the people who are on the receiving end of the services that they provide and the decisions that they take.
The minister may consider that he was gagged back in January, but it seems to have induced a state of taciturnity. The statement, which we welcome, was anticipated at least six weeks ago, but a general election intervened.
When I read the statement and the accompanying documentation, I could see why the minister might have been diffident. I reckon that the proposals sent a chill through the spines of certain Labour fiefdoms throughout Scotland. I derive great comfort from that, which is why I say to the minister—on behalf of the Conservative party in this Parliament—that I welcome the statement and the initiatives that are being taken.
We have all acknowledged, in particular during the inquiry into the governance of the Scottish Qualifications Authority last year, that after devolution nothing was going to be the same for quangos in their relationship with Government. That brings me to my questions, of which one is general and two are specific. The minister said, during his statement:
"we are redefining the relationship between the Executive and quangos to ensure that they work, where appropriate, to the Executive's agenda."
That may be boldly adventurous or it may be downright sinister. It suggests—I await the minister's response with interest—that, whether intentionally or not, we are moving, where the activities of quangos are concerned, to a new relationship between the process of government and the responsibility of ministers to the people of Scotland. In general terms, I want to ask the minister this: if, henceforth, a disaster occurs in the public arena that emanates from a quango, can this Parliament and the Scottish public expect a minister to take responsibility for it?
Secondly, on the more specific aspects of the abolition and review that are proposed in the statement, I presume that some quantification has been made of the possible saving of resources. The statement mentions many abolitions, several reviews and unifications and one or two creations. I presume that, at the end of the day, we will satisfy one of the nine criteria, which is better value for money. Will the minister confirm to the chamber the exact cost saving of this initiative to the people of Scotland?
My final question relates to the composition of boards of quangos and the Ethical Standards in Public Life etc (Scotland) Act 2000. The minister will be aware that, particularly in the context of boards of management for further education colleges, the act has already given rise to a practical difficulty. Many able and good members of local communities who serve on those boards are proving reluctant to continue their period of service because of what some regard as the oppressive inquisitiveness of the act, which seems to require disclosure of information at a level of detail that frankly is beyond the understanding of most sensible people. If the current effect of the act is to remove good and able people from the areas of activity where we need them, will the minister satisfy the chamber by reassuring us that the act is not a deterrent, but is instead beneficial and encouraging?
Perhaps I should begin my response by registering my usual concern when I receive Conservative support for any matter of policy. I will count my fingers and check the details before putting the issue to bed.
It is commonplace.
It might be commonplace for the SNP in terms of its right-wing alliance with the Conservatives; I can assure members that it is not commonplace for the Executive.
I am grateful if the Conservatives genuinely welcome the outcome of the review. However, I should say that, as they had 18 years in which to make similar proposals, their welcome would sound rather more authentic if we could point to any measures along the same lines that were introduced earlier in the recent history of Scottish politics.
I will leave that matter to one side. We are seeking to introduce changes that are appropriate and meaningful in the context of the current situation with Scottish quangos. In my statement, I referred to bringing the activities of quangos more closely in line with the policies of ministers, and I want to be absolutely clear about what that means. Certain quangos have a quasi-judicial role on which it would not be appropriate for ministers to give advice and direction beyond a certain point. We understand that that is absolutely the case, and that the letter of the law must be adhered to. However, as far as other quangos are concerned, there is a case for saying that guidance is required on the specific aspects of the work they conduct, on the generality of that work, and on how that work must echo and parallel ministers' policy intentions. That is what we intend to do.
Will ministers take responsibility? Where ministers are responsible, they take responsibility. The relationships between ministers and quangos are many and varied, depending on the individual body concerned, but we seek no lessening of ministers' current responsibilities in relation to the quangos and the people whom ministers appoint to them.
This whole exercise is not resource-driven, although I appreciate the important point that Annabel Goldie raised. The bodies that we propose to abolish—the initial third that I mentioned—account for a budget of more than £400 million a year. The bodies that are subject to the further review—the second third—account for a budget of about £4.8 billion a year. We will seek to secure best value from the activities of the remaining quangos and of those that will be subject to further scrutiny, and will examine the function of the quangos that are to be abolished to find out how we can maximise best value for money for any resources that are freed up. I stress that the review has never been a cost-driven exercise; it is primarily about accountability, openness and fitness for purpose.
Annabel Goldie's final point about further and higher education institutions has been raised with me several times by representatives of those bodies and other institutions. I am sensitive to those concerns, and we are seeking to fine-tune how the Ethical Standards in Public Life etc (Scotland) Act 2000 will impact on some of those institutions. As a result of those discussions, we believe that we might be able to put in place a proper regime of accountability and openness that will also safeguard appropriate levels of privacy for the individuals concerned. We do not want to end up chasing away individuals who have a substantial amount to contribute and who make, in essence, a voluntary contribution to those bodies, and we will take cognisance of that issue as we continue to work on the implementation of the act.
I thank the minister for the advance copy of his statement and the documents that I received, which have been helpful. The Liberal Democrats welcome the statement. We may not yet have a bonfire, but at least the minister has found the matches. We welcome the progress of the review to date, and the proposals in the document for improved governance and accountability of quangos are important.
I draw the minister's attention to concern over paragraph 15 of the report, which refers to bodies such as local enterprise companies, area tourist boards and further education colleges, which are not directly accountable to ministers but are accountable to another public body that is accountable to ministers. What steps is the minister taking to ensure that those bodies are also held to account by the public for their actions? What role does he envisage for local government in holding those bodies to account?
Iain Smith's general comments on the statement are welcome, and I am grateful that he has recognised that I am not a pyromaniac. What is important is not the size or the brightness of the flames, but the quality of the fire and the warmth that it generates.
Iain Smith raised the important issue of downward governance, with regard to bodies such as local enterprise companies and area tourist boards. I stress that the review is only the first step. The quinquennial reviews of the quangos, which they are expecting, will present an opportunity to continue to review the validity of the quangos that will remain after today and those that survive the further scrutiny process.
We must address some further issues. We need to consider the relationship between the quangos, local government and the Scottish Executive over the longer term. Not everything can be dealt with in a single snapshot in this exercise. However, the exercise should not be regarded as some kind of embarkation on a voyage of permanent revolution; it is about properly addressing that part of the governance of Scotland that sits in the context of quangos. We have addressed the national governance of Scotland, through the creation of the Scottish Parliament. Local government is undergoing a number of exercises, not least of which is the review of internal governance that was begun recently and on which many local authorities have embarked enthusiastically. This is the third plank in the platform, which seeks to ensure that modernisation and devolution is taking place in quangos as well as in those two other areas. In that context, the work will have to continue—not as permanent revolution, but as constant fine tuning to ensure that the quangos are still fit for their purpose, appropriate and acting openly. We intend to see that process through.
I welcome the reduction in the number of health bodies, which will also be welcomed in a number of local communities. My question for the minister is the reverse of Annabel Goldie's question. Those who serve on quangos are the so-called elite of society. What steps will the minister take to ensure that people who are representative of local communities will be appointed to quangos—for example, people who have served on housing associations, such as the late John Butterley, who served on a housing association for 25 years but was not considered for any of a number of local quangos to which he could have made a valuable contribution? What steps will the Executive take to ensure that community council members, tenants association representatives and health council representatives, who have been excluded from quangos in the past, are given a genuine opportunity to apply to sit on quangos?
I am delighted that Paul Martin raised that point. For me, that issue goes to the heart of the work that we have been trying to do. The review must ensure that proper representation from all sectors of Scottish society is secured on those non-elected bodies. Those people must be actively engaged in the membership and the running of those organisations, and there are several steps that we need to take.
First, our task is not just to advertise more widely to recruit people from different backgrounds; we must engage in a much more proactive process in which we go out into communities and try to identify people who have the necessary qualities. We must not only encourage them to apply, but approach them and ask, "Have you considered playing a full role in something like a quango in your local area, or for Scotland as a whole, drawing on your qualities, experience and background and your capacity to deliver, not only in your local community, as you have demonstrated, but throughout Scotland?"
That means that we will have to set stringent targets in relation to women and ethnic minorities, for example, to ensure that, as far as possible, we increase the level of representation that all groups have on the quangos. In that respect, the appointments process will play an important part. I intend to ensure that this is not the end of the story with regard to appointments. Public confidence in quangos depends on the belief that the quangos are peopled by individuals who represent all parts of Scotland and not just some elite. Major steps have been taken in that direction, but we need to go further. I intend to flesh out the detail of that in the weeks and months to come.
I want to ask the minister how two points in his statement will impact on a substantial quango that was not mentioned in his statement: visitscotland. I assume that it is not one of the 52 quangos that are to be abolished, unless those of us who attended the visitscotland event last night, including the minister with responsibility for tourism, were attending some sort of last supper.
The first point is overlap. The duplication of effort is as crucial a question as the number of quangos. Can anyone clarify why tourism is dealt with not only by visitscotland but by tourism departments in Highlands and Islands Enterprise, Scottish Enterprise and the Scottish Executive?
The second point is guidance. Can we ensure that the direction and guidance that the minister talked about will address the question whether visitscotland is a marketing body or a regulatory body? That would ensure that we would not hear the excuse that the £4,000 that was spent on marketing Scotland in Canada, for example, was an operational matter for visitscotland. Such matters should become the responsibility of the Government.
Kenny MacAskill raises the important matter of how we can ensure that quangos act on the guidance that sets out the ways in which we expect them to act in relation to ministerial policy. Departmental colleagues will have the responsibility for ensuring that many aspects of the review are followed through in relation to their departmental responsibilities. The bodies that Kenny MacAskill mentioned will receive the same guidance that all the other bodies will receive. That guidance will outline the ways in which those bodies should take account of ministerial policy and will state that they should act in concert with that policy rather than in isolation.
On the future of visitscotland, the main document makes clear which bodies fall into which categories. My understanding is that Kenny MacAskill did not attend visitscotland's last supper last night.
I apologise to those members whom I have been unable to call, but we have run well past our time.