Member Article

The Finance Committee at Holyrood published its long awaited Report into Accountability and Governance last month. Its conclusions, and especially its strong criticism of the current structure of independent bodies in Scotland, have raised a few eyebrows among those with an interest in public administration. The Report follows a lengthy inquiry which began in March this year, looking into the growth of independent regulatory and investigatory bodies in Scotland since devolution. These bodies have been established in a number of forms; there are currently six Ombudsmen, Commissioners or Office Holders that are accountable directly to the Parliament and seven bodies that are accountable to the Executive as Non Departmental Public Bodies, Executive Agencies or Non Ministerial Departments. Broadly, the Report finds that the current arrangements surrounding these bodies are not satisfactory and that plans for the establishment of more of them should be put on hold pending the resolution of these outstanding issues. Three of the Report's key criticisms concern value for money and financial accounting, overlapping functions between different bodies leading to wastage, and the confusing classification of bodies. Several concerns with financial accountability, and particularly that value for money has not been achieved, have been flagged up. Of particular concern to the Committee was the creation of Non Ministerial Departments, as neither the Parliament nor the Executive have been designated a leading role in scrutinising these bodies' expenditure – which is considered unsatisfactory. The Committee also wants to see a streamlining of these bodies' functions as many undertake overlapping activities. This would involve the pooling of resources between bodies, but would extend as far as consolidating a number of different bodies that have similar or overlapping remits. Concern was expressed at the lack of logic and consistency regarding the current classification of bodies such as Non Departmental Public Bodies and Non-Ministerial Departments and the report suggests that the Executive reviews the classification with a view to simplifying the models. More fundamentally, in order to prevent further duplication of efforts, the Committee proposes to put on hold the creation of any new bodies unless it can be demonstrated that the function cannot be carried out by an existing body. For example, this could see the existing Scottish Public Services Ombudsman take on the responsibilities of the proposed Scottish Human Rights Commissioner. What does this mean for the future? If the Finance Committee's suggestions for reform are implemented, we would see a significant streamlining of the current structure. Not only would this save costs and increase effectiveness of the bodies themselves, but it would lead to a more user- friendly and more inherently coherent body of administration. Despite the general recommendations of the Report, it does not appear that many have been adopted in the re-energised Scottish Commission for Human Rights Bill. The Bill had been stuck in Committee for several months after the Justice Committee refused to recommend it, but September saw a flurry of activity (both before and after the publication of the Finance Committee's Report), which has led to the Bill progressing to the final stage. The debate for this is scheduled for November. While a number of further amendments were proposed to the Bill subsequent to the Finance Committee's Report being published – including a number by Des McNulty, who chaired the Finance Committee's investigations – none appear to go as far as the recommendations proposed in the Finance Committee's Report. The Report's criticisms will hopefully lead to an overhaul of the current process for establishing these bodies to increase up-front consideration of efficiency and accountability. However, no quick fix is in sight, as changes are unlikely to be proposed until after publication of the Executive's own independent review of the regulation, audit, inspection and complaints handling of public services. This review, which is being conducted by Professor Lorne Crerar, is due in around June next year. This will lead to significant short-term uncertainty for the bodies and their users but presents a welcome opportunity to remodel the current system into one coherent structure. The key challenge in any such remodelling is to balance conflicting interests of independence on the one hand and financial accountability on the other. However the dice will fall in this balancing exercise, it is unlikely that the current system will continue without fundamental reform.

 

Footnotes: Gordon Downie is a partner specialising in competition and regulation with UK law firm Shepherd and Wedderburn