How long is the arm?
10 January 2025
Arm’s-length bodies have proliferated since the Labour government took office; Elizabeth Atherton looks at some of the challenges they face.
According to recent reports, by Christmas the current government had established 25 new arm’s-length bodies (ALBs) in the six months since achieving power—an average of one a week—to add to the UK’s 305 pre-existing ALBs.
ALBs are unelected public bodies, responsible for delivering many of our vital public services at a distance from government, but which are ultimately accountable to Parliament for their use of public funds and are sponsored by a designated government department. Some ALBs are enormous entities with thousands of employees—such as NHS England, the British Council and Network Rail—but the majority are relatively small organisations with niche functions.
Last month, GGI hosted a roundtable event, bringing together six of the smallest ALBs to discuss the challenges of operating as independent bodies of government. The themes that were raised, despite each organisation having a different structure and purpose, were pretty much universal, with an overriding question hanging over each one: ‘how long is the arm?’
Opera challenge
Indeed, this is a question I have been raising outside my work with GGI over the last months, as I have spent my spare time pressing politicians in the UK and Welsh governments for inquiries into Arts Council England, one of the larger English ALBs, and the Arts Council of Wales, both of which have unilaterally decided to virtually decimate the UK’s opera sector through what are widely seen as perverse and illogical decisions that I believe should be challenged.
My argument throughout has been that if ALBs aren’t responsible to government, then who holds them to account when things go wrong? But sadly, it appears far too easy for ministers to hide behind the arm’s-length principle and abdicate responsibility for decisions taken by their ALBs—decisions upon which the security and sustainability of entire sectors across Britain rest, along with the livelihoods and wellbeing of those working within and reliant upon them.
ALB dichotomy
The ALBs we spoke to last month have differing levels of operational freedom, and during the conversation it became clear that most were originally established in response to circumstances which the government felt needed action, but seemingly without putting much thought into some key questions. How would the body function long-term? What might be the repercussions of establishing the organisation? And how would its complex relationship with its sponsoring body and other related organisations work in the decades to come?
There is a dichotomy at the heart of an ALB’s challenges: how to hold its sponsor department to account so that it can effectively act for its service users and stakeholders while simultaneously finding ways to successfully influence its sponsor to achieve its desired outcomes.
One issue is that board appointments are made by the government department, with the ALB having little or no say in recruitment, often meaning that any desire to widen diversity or bring in the necessary skills the executive feels may be missing can be overlooked.
In governance terms, this is obviously far from ideal—a board imposed upon an organisation by a sponsor department that may or may not operate an effective relationship with its ALB could be a recipe for disaster. Indeed, this has been recognised by the National Audit Office (NAO), which has said: “The continuing inconsistency in how ALBs are set up and overseen is a barrier to further improvement. More needs to be done to share lessons across organisations, identify opportunities to improve the complex systems in which policies and services are delivered, and understand when a delivery model is no longer working effectively.”
Varying experiences
The NAO’s work has highlighted that “types and classifications of ALBs are inconsistently applied, departments take different approaches to oversight, and oversight tends to focus on compliance and control rather than making the most of the operational expertise of their ALBs." This was certainly evidenced in our discussion, with all six of the participants describing very different levels of control being utilised by their sponsor departments, some of which exerted far more influence than others who appeared to employ an almost entirely hands-off approach.
Cabinet Office maintains that the sponsorship role is vital in assuring that ALBs are operating effectively, while also admitting that “ineffective sponsorship can undermine the relationships between departments and public bodies. This can in turn have a detrimental effect on delivery of effective public outcomes that offer value for money.”
In reality, an ALB’s hands are tied by which government department is its sponsor, who the elected minister of the time is, and how blurred or not the length of the arm becomes depending on the level of political influence.
Challenges that are universal to many organisations, be they public or private, remain as standard, such as tensions with flexible working policies and challenges to recruit and retain staff (though pensions were cited repeatedly as being a particular draw into ALBs), but the unique position that every ALB finds itself in due to its complex relationship with its sponsoring department and minister sets them apart from other organisations and raises discrete challenges.
Letting off steam
Hopefully, it will have felt cathartic for the six organisations we spoke to last month to come together and let off some steam—certainly the feedback has been very positive. Sharing their experiences of working in such unique circumstances and the techniques and strategies that each of them has developed in response to the challenges they face was clearly beneficial to each of them and provided much food for thought.
One takeaway that was clear to me on listening to the participants speak was that regular arm’s-length body external governance reviews are vital to ensure that the organisations can make the very best of their circumstances and exert as much control as possible over their own destinies.
Another was a renewed determination to continue fighting for investigations into both Arts Councils…
