The newly elected Labour government is facing a formidable challenge as it embarks on its plan to create or overhaul at least 17 public bodies, a move that is expected to come with hefty price tags, according to a recent report from the Institute for Government (IfG). The thinktank’s findings highlight the potential strain on the Treasury’s resources as Labour seeks to deliver on its manifesto promises.
Costly Endeavors: The Price of Creating New Public Bodies
Setting up new government agencies from scratch is no small feat, as the IfG report emphasizes. The thinktank estimates that the cost of establishing a new government department alone can reach a staggering £15 million in set-up expenses, with an additional £34 million lost in productivity during the transition period. While public bodies may not be on the same scale as departments, their creation can be even more costly, especially when they require entirely new infrastructure and systems.
The Challenges Ahead: Funding, Governance, and Remit
Matthew Gill, the author of the IfG report, underscores the central role public bodies will play in the success of the Labour government. However, he also points out the significant hurdles that lie ahead:
“Public bodies – from the National Wealth Fund to the National Care Service – will be central to the Labour government’s success. But they are hard to build well and many questions about the funding, governance and remit of the 17 bodies so far announced remain unanswered.”
– Matthew Gill, Institute for Government
The report serves as a guide for the government, drawing on lessons learned from past experiences in creating public bodies. It emphasizes the importance of clearly defining the mission, building support, and ensuring adequate resources for these entities to succeed.
Legislation in Motion: Fair Work Agency and Armed Forces Commissioner
The Labour government has already begun the process of bringing forward legislation to establish key bodies such as the Fair Work Agency and the Armed Forces Commissioner. However, there is a notable lack of detail regarding the costs associated with these initiatives. The impact assessment for the new Fair Work body, for instance, states:
“It has not been possible to estimate … the set-up costs of the FWA associated with bringing together existing enforcement bodies [or] the costs associated with new state enforcement responsibilities including the enforcement of holiday pay regulations.”
This uncertainty surrounding the financial implications of these new bodies raises concerns about the government’s preparedness and the potential burden on the Treasury.
Industry Levies and Future Funding
Some of the proposed public bodies, such as the football regulator, are expected to be ultimately funded by industry levies. While the initial set-up costs will fall on the exchequer, the hope is that levy payments will eventually cover the majority of the expenses incurred during the establishment phase and the ongoing running costs of the regulator. However, the success of this approach remains to be seen.
The Road Ahead: Defining Missions, Building Support, and Securing Resources
As the Labour government moves forward with its plans to create and revamp public bodies, it must heed the lessons outlined in the IfG report. Defining clear missions, building support, and ensuring adequate resources will be critical to the success of these initiatives. The report cites cautionary tales, such as the Independent Commission on Civil Aviation Noise (ICCAN), which was abolished within three years due to a lack of agreement on its purpose, and the Trade Remedies Authority (TRA), which faced cutbacks just two years after launch because of waning ministerial support.
Moreover, the government must be mindful of the financial pressures it faces as it seeks to deliver on its ambitious agenda. The IfG report serves as a reminder that creating public bodies is a complex and costly endeavor, requiring careful planning, sustained commitment, and substantial investments.
As the Labour government navigates the challenges ahead, it will need to strike a delicate balance between fulfilling its manifesto promises and managing the financial implications of its decisions. The success of its public body initiatives will depend on its ability to learn from past experiences, secure the necessary resources, and maintain the support of both politicians and the public.
The road ahead is undoubtedly filled with obstacles, but with careful planning and execution, the Labour government has the opportunity to create public bodies that will make a meaningful difference in the lives of citizens across the United Kingdom. The IfG report provides valuable insights and guidance as the government embarks on this transformative journey.
