How to review agencies and non-departmental public bodies to improve the quality and effectiveness of public services

Introduction
Planning and preparation
Timing of a review
Timing and links with better quality services and public spending reviews
How long should a review take?
How to announce the reviewWho should carry out the review?
Involvement of the Agency or NDPB in the review
The role of the Cabinet Office and theTreasury
Role of the devolved administrations
How to announce the results of the review (Stage One and Two)
Superseded guidance
Further information

Introduction

2.1. Part Two provides guidance on the following general issues which will be relevant to most reviews:

Planning and preparation

2.2. Proper planning is vital to the success of a review. This will involve thinking about:

Scope – is there a case for widening the scope of the review beyond the immediate boundaries of the Agency or NDPB concerned, bearing in mind the Agency’s or NDPB’s links with other organisations both within and beyond the Department?

Information – what will the review team need to carry out their work? Does it already exist in an easily accessible form, or will it have to be specially generated for the review? Consider providing interested parties with advance notice of the types of information to be sought from them.

Skills – can the review be carried out by an individual, or will it require a team to provide a mix of skills?

Resources – are sufficient resources available to ensure that the review will be completed on time?

Oversight – will the review need a Steering Group and who should be on it? In particular, what sort of external representatives should be included?

Engagement – how can you best ensure Ministerial and senior management engagement in the review from an early stage?

Other reviews – what impact will other reviews (eg under Better Quality Services 5; or public spending reviews) have on the timing and scale of the Agency or NDPB review?

Timing of a review

2.3. Agency and NDPB reviews are generally carried out on a five year cycle with the review proper starting at the end of the fifth year. This is usually sufficient for a new Agency or NDPB to bed down and then concentrate on delivering the business for which it has been established. It is also a long enough interval for an existing Agency/NDPB to implement any changes introduced since the last review and measure their impact. However, planning and preparation should start well before this.

2.4. However, there needs to be some scope to be flexible in the timing of reviews if they are to be as effective as possible. Reviews may need to be carried out sooner if, for example, there is:

2.5. Reviews may also need, exceptionally, to be delayed if, for example, they would clash with other work which may have a bearing on the future delivery of the services currently delivered by the Agency or NDPB in question. However, a delay for more than a year would need to be based on highly compelling reasons. Where Departments want to either bring forward or delay a review, Ministers in the parent/sponsor Department should seek the agreement of Cabinet Office and Treasury and a revised timetable agreed. Once a review has started, the Department and the Agency or NDPB, in consultation with the Cabinet Office and the Treasury, should make every effort to keep to the agreed timetable and advise other parties of any significant slippage.

How long should a review take?

2.6. How long a review takes to complete can determine the impact it has. The scale of a review should be commensurate with the job to be done. Departments should be aware of the costs of carrying out a review and of the impact and benefits which the review generates in order to ensure that the effort and cost involved is justified by the end result. Larger Agencies and NDPBs, and those with more complex activities, will tend to require more work than smaller and simpler Agencies and NDPBs. In addition, those with an interest in the Agency or NDPB must be given sufficient time to contribute to the review. However, whilst it is important for reviews to be rigorous and to consider properly all the relevant issues, this should be balanced with the need to complete reviews quickly enough so that the opportunity they provide to achieve improvements in how services and functions are delivered is not lost. Long-running reviews can also be counter-productive for the morale of staff working in the Agency or NDPB being reviewed.

2.7. With this in mind, Departments should aim to complete Stage One within two months, and at most, three months from when they start to when recommendations are presented to Departmental Ministers. They should aim to present recommendations from the second stage, if undertaken, within three months of the conclusions of the first stage being agreed.

2.8. Not all reviews will be able to fit within these timescales, for example, where a review is considering particularly complex issues, a very extensive consultation exercise to gain customers’ and stakeholders’ views needs to be carried out, or a joint review involving several Agencies or NDPBs is being carried out. But these should be the exceptions. It is hoped that by adopting a two-stage approach, where the organisational questions are settled before consideration is given to how to improve performance in the future, sufficient impetus will exist to complete the review quickly.

2.9. Departments should also consider whether it is possible to draw on other relevant and quality work which may be able to substitute for parts of a review. If this is possible, it may have an impact on how long the review takes. Examples of other work which may have relevance include that completed under Better Quality Services; reviews carried out as part of the public spending review; value for money studies carried out by the National Audit Office; internal audit work; and the results of an Agency’s or NDPB’s participation in one of the various quality schemes available to the public sector, such as the European Foundation for Quality Management Excellence Model® 6, and Charter Mark 7. However, in considering such work, Departments should be careful to ensure that the results remain current.

How to announce the review

2.10. Reviews should be publicised and comment from customers, staff and their trade unions, and other stakeholders, encouraged. This is particularly important given the emphasis within the Modernising Government White Paper on delivering services in such a way as to meet the needs of citizens rather than the convenience of service providers; and on involving staff in thinking about how services should be delivered. Seeking the views of customers on the services and functions provided by the Agency/NDPB is one essential way of ensuring that reviews reflect their needs when considering how such services and functions should be provided in the future.

2.11. Reviews should be announced in the following way:

Who should carry out the review?

2.12. Departments, rather than Agencies or NDPBs, are responsible, on behalf of their Ministers, for carrying out the review. In exercising this responsibility, it is up to Departments to decide how to staff the review. Reviews can be carried out by an individual or by a review team, depending on the size of the Agency or NDPB being reviewed and the scope of the work.

2.13. Reviewers can include:

2.14. In all cases there should be an independent element in the interests of objectivity and as a challenge to internal thinking, and this should influence the choice of reviewer. Normally, a reviewer from outside the Department should be involved in at least Stage One of the review and, where appropriate, Stage Two. Including external representatives on the Steering Group for the review is also an effective way of ensuring such independent input. The evaluation of the role of the Department in advising Ministers, in particular, will require independent input or the Department would otherwise be, in effect, evaluating its own performance.

2.15. Consultants may be able to bring to bear wider experience or provide specific skills in particular areas, which Departments may not have. However, there is no presumption that consultants should be used and Departments should have a clear view of the added value consultants would provide before deciding to use them. Departments may find the guidance in the Efficiency Unit report on the use of external consultants 8 helpful in reaching a view. The Cabinet Office and the Treasury do not hold a register of consultants, and Departments are advised to speak to their own procurement staff for further advice.

2.16. Where Agencies are Departments in their own right, careful thought needs to be given as to how an independent and objective review can be achieved. Such Agencies are still ultimately responsible to particular Ministers. An option, therefore, is for the review to be carried out by the Department for which the Minister is principally responsible. Another option would be for external consultants to carry out the review and to report directly to the Minister, taking care, of course, to ensure that the Agency is fully involved in the process.

2.17. Whoever is chosen to carry out the review, they should have sufficient standing and experience to win the respect of the Agency or NDPB being reviewed. They should also have, or be able to obtain quickly, a proper understanding of the business of the Agency or NDPB; and the environment it operates in, including the wider Government policies and priorities which are relevant to its operation.

2.18. Review teams should also include, or have access to, skills relating to the use of new technology. In particular, the review should be able to consider the new possibilities for organisational structures which such technology offers.

2.19. If Stage One of the review leads to a decision not to retain Agency or NDPB status, Departments should consider retaining the first stage reviewer(s) to develop detailed proposals for actioning whichever alternative organisational option has been chosen, depending, of course, on the skills that are needed to take this work forward. Or at least to ensure that they are involved as part of any team appointed for this purpose. This will help implementation by ensuring continuity of thinking.

2.20. The cost of the review, and in particular, the cost of any external input, should be borne from Departmental budgets.

Involvement of the Agency or NDPB in the review

2.21. Although not responsible for carrying out the review, the Agency or NDPB should be closely involved. In particular, their senior management, and in the case of NDPBs, the Chairman and the Board, should have a proactive role in helping to identify specific issues which the review should address, In addition, the Agency or NDPB needs to be involved in providing information to the reviewers, making key staff available for discussion, and helping the review team understand the environment in which it operates, including its contribution to wider Government policies. For these reasons, the Department should consider including a member of staff from the Agency or NDPB on the review team for some or all of the review. This may also help to provide the team with the technical expertise to understand areas of an Agency’s or NDPB’s work which can be highly specialised. In addition, it can help to increase the sense of ownership within the Agency or NDPB being reviewed and aid the implementation of changes recommended by the review. A member of the Agency or NDPB will normally sit on any Steering Group.

2.22. Departments should also discuss with the Chief Executive of the Agency or NDPB how best to make sure that the staff of the Agency or NDPB and their trade unions can be constructively involved in the review process. The terms of reference for the review should be made available to staff and their trade unions and they should be given the opportunity to put views to those undertaking it. They should be told what decisions Ministers have made as a result of the review and, where appropriate, consulted on the implementation of those decisions. They should also be consulted, as appropriate, about any provisions in the proposed Framework Document or Management Statement that may affect terms and conditions of employment.

The role of the Cabinet Office and the Treasury

2.23. In carrying out reviews, Departments should familiarise themselves with this guidance. The role of the Cabinet Office and the Treasury is one of challenge, quality control and advice. Both the Cabinet Office and the Treasury have extensive experience of Agency and NDPB reviews and Departments should make use of this expertise as necessary. As part of this, the Cabinet Office and Treasury should be invited to sit on any Steering Group which is set up to oversee the review. In particular, on issues such as performance measurement; making effective use of partnership working; and making better use of new technology, the Cabinet Office and the Treasury will be able to provide advice on how they can be best exploited to improve future performance. The first point of contact in the Cabinet Office is the Modernising Public Services Group (for Agencies) and the Central Secretariat (for NDPBs); and the relevant Expenditure Team in the Treasury. Where the Agency or NDPB being reviewed is a public sector research establishment (PSRE), Departments should also consult the Office of Science and Technology (OST) regarding the particular issues to be addressed by such a review. The OST and/or the Chief Scientific Adviser’s Commitee network may also have views on the value of conducting joint or parallel reviews involving PSREs.

2.24. The Cabinet Office and the Treasury also have a role in ensuring that reviews succeed in achieving their aim of being an effective lever for improving public services. As part of this, they should be kept informed of a review’s scope, terms of reference, timetable and progress and be given the opportunity to comment. In relation to the scope of a review, there may be occasions when the Cabinet Office and/or the Treasury will suggest that it be extended to include other Agencies or NDPBs, in the form of a joint review, if from their central perspective they can see that there would be added value in doing so. Cabinet Office and Treasury Ministers will also need to agree the recommendations arising from Stage One regarding the future organisational option to be chosen in respect of all Agencies, and large executive NDPBs with staff of 100 or more; and (for Agencies) any changes to Framework Documents as a result of Stage Two.

2.25. The Cabinet Office and the Treasury will also want to ensure that the lessons learnt and good practice identified as a result of reviews are given wide circulation across the public sector, as appropriate (and in a form which safeguards commercially or other sensitive information).

Role of the devolved administrations

2.26. Some Agencies and NDPBs are sponsored jointly by the UK Government and by one or more, of the devolved administrations; others are sponsored solely by the UK Government but operate in devolved areas. In such cases, the devolved administrations should be involved in the review process. In particular, in relation to:

The extent to which these should be a matter of formal agreement rather than an opportunity to comment will depend on the exact legal responsibilities which underlie the joint sponsorship arrangements.

2.27. In addition, the degree to which the devolved administrations choose to become involved in individual reviews is a matter for their own Ministers. Where they do become involved, there is likely to be a need to resolve a number of issues at an early stage. For example, the devolved administrations may be working to different guidance, or have a different set of priorities, which will need to be reflected in the terms of reference. There may also be a number of funding or other resource issues to resolve (e.g. how the costs of the review should be shared between the devolved administrations and the UK Government). It will, therefore, be important to clarify with officials in the devolved administrations at an early stage the degree to which they wish to become involved in a particular review.

2.28. These requirements do not apply to Agencies or NDPBs which operate in non-devolved areas.

How to announce the results of the review

Stage One

2.29. The outcome of the first stage of the review should be announced by means of a Parliamentary Question, after having been agreed with Cabinet Office and Treasury Ministers in respect of all Agencies and large NDPBs (i.e. those with 100 staff or more). The results of the first stage should be published (either edited or unedited). Departments should place a copy of their report on their own web site and/or the web site of the Agency or NDPB. In addition, the Department may also publish the results:

Stage Two

2.30. It is up to Departments to decide whether the results of the second stage of the review should be published in some form. It may be appropriate to publish, for example, in the Agency’s or NDPB’s Annual Report, or Corporate or Business Plan, the action proposed to implement the changes identified by Stage Two to help improve future performance and then to provide updates of progress in subsequent reports and plans. In addition, Departments, Agencies and NDPBs are encouraged to report the results of the review on their own web sites.

2.31. In the interests of openness, the presumption should be that the results of both stages should be published unless there are overriding sensitivity reasons for not doing so.

Superseded guidance

2.32. This guidance supersedes Guidance on Agency Reviews issued by the Cabinet Office (OPS) in 1995, and Chapter 12 and Appendices E and F of Non- Departmental Public Bodies: A Guide for Departments, which were issued by the Cabinet Office in June 1996.

Further information

2.33. For further information about any aspect of this guidance please contact the Modernising Public Services Group in the Cabinet Office on 020 7270 6172/6454. Copies of this guidance are available on the Internet at the Modernising Public Services Group web site.

2.34. This guidance may be revised and updated from time to time as necessary.

Footnotes

5 More detailed guidance on BQS reviews can be found in Better Quality Services: A handbook on creating public/private partnerships through market testing and contracting out, 1998, ISBN 0 11 630964 4 (which is available on the Internet at http://www.cabinet-office.gov.uk/eeg/1998/quality/hb_ind.htm)

6 Further information on the EFQM Excellence Model® can be obtained from British Quality Foundation, 32–34 Great Peter Street, London SW1P 2QX
(Web site: http://www.quality-foundation.co.uk).
Information on how to apply the EFQM Excellence Model® to the UK public sector is available on the Internet at http://www.cabinet-office.gov.uk/eeg/1999/benchmarking.htm
Information on Charter Mark is available on the internet at http://www.chartermark.gov.uk

7 Information on Charter Mark is available on the Internet at http://www.chartermark.gov.uk

8 Cabinet Office, The Government’s use of external consultants, 1994, ISBN 0-11-430140-2

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