Official Report: Minutes of Evidence

The Chairperson (Mr O'Toole): The first thing to do is thank you for your patience. Given how digitally enabled the Northern Ireland Civil Service is, I am sure that you have been working feverishly outside and there has not been a second of lost productivity. Notwithstanding that, we apologise and appreciate your patience. Obviously, our previous session was important, not that this one is not important. There are some related matters, because, tangentially, arm's-length bodies (ALBs) came up in the previous session. We have in front of us, Tony Simpson, deputy secretary for strategic policy and reform; Helen Toner, director in the same part of the Department; and Stuart Stevenson, director of the property services division. I think that you have got a new job since the last time we saw you, Stuart.

Mr Stuart Stevenson (Department of Finance): No, Chair. I am still the Treasury Officer of Accounts (TOA).

The Chairperson (Mr O'Toole): Are you? There was some discussion about that. You wear multiple hats. In any case, you are here as the director of the property services division, and we are happy to have you. Tony, you can make an opening statement. Members, indicate if you want to ask a question.

Mr Tony Simpson (Department of Finance): Thank you, Chair, Deputy Chair and members for inviting us here. You have already introduced Helen who has been leading on this work in my team, and Stuart who is still in his role as Treasury Officer of Accounts. Given the link between this work and wider ALB governance arrangements, we thought that it would be useful to have Stuart with us to cover any questions on wider financial management and governance issues across Departments.

I welcome the opportunity to provide the Committee with an update on the Department's work on public bodies. As members will have seen from our written briefing, that work is well advanced and nearing completion. We are in the final stages, focusing on validating the data with Departments to ensure that the accuracy and findings are robust and reliable ahead of consideration by the Minister.

With your permission, Chair, I thought that it might be useful to briefly set out the background to this work and what we are hoping to achieve. The Committee will be aware that the Department conducted an exercise in 2021, but it was subsequently acknowledged that that high-level assessment did not provide a sufficiently robust review of ALBs to allow decisions to be taken, and it was agreed that it would be for individual Ministers to determine the status of their ALBs.

In December 2021, the Executive agreed that it would be for sponsoring Departments to take forward assessments of their relationships with arm's-length bodies, including plans for ALB reviews as part of the existing governance and accountability frameworks. The Executive also agreed to the preparation of legislation, commonly referred to as the public bodies Bill, which, it was thought then, would provide a useful mechanism in certain circumstances to support Ministers in reforming their ALBs. The drafting of that Bill and the preparation of departmental plans were in train prior to the Executive collapse in February 2022.

Following the restoration of the Executive in 2024, the Department, last year, commenced two connected pieces of work to strengthen our understanding of the ALB landscape. That initially involved an ALB public-sector pay landscape review. Later in 2025, the Department commenced a one-off ALB review exercise for Departments to assess the status of their public body reviews and, in particular, to consider whether there is a clear need for primary legislation in the form of a public bodies Bill. Those have been significant data collection exercises.

Briefly, in September last year, the Minister asked all Departments to nominate representatives for the focused ALB review exercise, and a working group was established across Departments. Progress has been made on that since the last update was provided to the Committee in December, and the exercise was conducted in two phases. We have completed the first phase of that exercise, establishing a single, verified list of public bodies across Departments. That was shared with the Committee in February. Phase 2 involved a further information-gathering exercise across 119 bodies that agreed to be in scope, and that excluded Executive agencies and North/South bodies. We have completed the main data collection exercise element of that, with all Departments providing detailed returns. Since then, officials have been working closely with Departments to validate that information. That work is now well advanced, and analysis is under way with ongoing validation of the data and findings.

The Department has conducted the pay landscape review. Given DOF's overall responsibility for public-sector pay and wider budgetary processes, that work informs the Department's consideration and analysis of pay-related matters, including trends in pay and comparison between different public-sector staff groups and bodies. Similarly, it involved an extensive data collection piece. The updating of those datasets is ongoing, including some further cooperation following the Audit Office's recent report into partnership working with ALBs.

To conclude my remarks, given the scale and complexity of the ALB landscape, this has been a significant exercise, with a huge volume of data collected that is being validated at this time. The Department's focus is to ensure that it provides a robust and accurate picture of the overall ALB landscape. It is important to stress that the exercise is not the beginning of ALB reform. Departments, Ministers and accounting officers are already responsible for the oversight of the bodies that they sponsor, ensuring that the necessary governance arrangements are in place and identifying where reform is necessary or where outcomes or value for money can be improved.

Through this work, we want to obtain an overall picture of the current position of the ALB landscape, particularly to assess whether a public bodies Bill would be a useful vehicle to support that reform. Once the data is fully validated and assessed, the Minister will, of course, need to consider the findings of that data, any potential next steps and how he might want to engage with his Executive colleagues.

In short, the groundwork has been done, but there is further work to be done with Departments and Ministers, and we can assure the Committee that we will keep it updated as we work through that. I am happy to take any questions or comments that you may have.

The Chairperson (Mr O'Toole): Members, as always, indicate if you wish to ask a question.

The first question is, I suppose, to contextualise it. There was a commitment in the New Decade, New Approach agreement not just to review arm's-length bodies — it is important to say that — but to review arm's-length bodies "with a view to their rationalisation". Is that no longer the policy of the Executive? We are six years on from New Decade, New Approach, but for the purposes of clarity, is the position of the Executive that they are reviewing arm's-length bodies with a view to their rationalisation, or just reviewing them?

Mr Simpson: There has been no Executive decision taken on that since then that I am aware of. Moving on from the New Decade, New Approach commitment, the position of the Executive is that it is for individual Ministers to review and consider what reform is needed and to develop any action plans, as necessary. We now want to do a stocktake of where Departments are with that and assess that overall picture and then assess whether our public bodies will be a useful means of doing that.

The Chairperson (Mr O'Toole): OK. You went out and asked the Departments what they were doing with the arm's-length body reviews that were done last year. Was it in September?

Ms Helen Toner (Department of Finance): The exercise started in September, when the Minister wrote to them. We then went out in December and got the first phase, which was the actual list of bodies. We worked from February to the end of March, when we got the initial data in. Since March, we have basically been trying to validate that and ensure that it is accurate, because it is quite a complex landscape.

The Chairperson (Mr O'Toole): When you wrote out to them in September, was the expectation that they were supposed to have been doing something before then?

Mr Simpson: It would have been for individual Ministers to determine what the review activity would be, what ALBs they would need to review and what the nature of those reviews might be. That is what we are trying to establish.

The Chairperson (Mr O'Toole): So, just to be clear — not to get too 'Yes, Minister' about it — a review was announced in 2020. Then, a desktop exercise of some kind happened in 2021. Then, there was an election; the institutions collapsed and did not restart, and we had that period without an Executive. So, presumably, at that point, there was no active arm's-length body review. An exercise began in 2021, and that was parked, so it is fair to say that there was no active policy at that point.

Mr Simpson: No new Executive decision was taken, on restoration, in 2024.

The Chairperson (Mr O'Toole): Then, on restoration, there was no new policy decision taken. Then, last year, prompted by a number of things, possibly including questions from this Committee, the Finance Minister said, "Fair enough, I will write out and find out what the situation is". That is where we got to. We were writing out in September to find out. At that point, were you asking, "Where are you with the review?", or were you asking, "How many ALBs do you have?"?

Ms Toner: We had two phases. The first was to get an understanding of the landscape and the number of ALBs and the characterisation of those bodies. The second phase was to understand when they had been reviewed, primarily from the role —. There had been Executive agreement, in December 2021, that the Department of Finance would take forward a public bodies Bill if there was a need, if there were a number of bodies that had been identified for reform. That exercise was to understand whether the bodies had been reviewed and when that had happened, what the status was and whether there was a need for a public bodies Bill. We supplemented that with a few extra questions to get an understanding of the use of shared services across the bodies as well. Those were the questions that were asked, and it was primarily to see whether there was a cohort of bodies that had been reviewed where reform or change was needed that would benefit from taking forward a public bodies Bill. That was the driver. There were a number of questions: had they been reviewed? What was the outcome of the review? Does it need a public bodies Bill? What is the use of shared services?

The Chairperson (Mr O'Toole): OK. How many had been reviewed and how many had not?

Ms Toner: We are in the process of establishing that. The first phase is complete. We have the list of the bodies. We are now working through the initial returns, the last of which came in towards the end of March. We are now working back and forth to validate that data.

The Chairperson (Mr O'Toole): You must know whether there were some Departments that just did not actually do a review and just said, "Oh, actually, we did not do that in the end, but we will start now."?

Mr Simpson: There is not a binary choice, really, between doing a review and not doing a review. What we are seeing, and what we are trying to explore to ensure that we have a consistent picture, is that there is a spectrum of review. There is ongoing governance activity on which the Departments will be engaging with their ALBs, and there is a spectrum of review-type activity that a Department could be doing, so it is not a simple, "Have you reviewed or not?". They could be light-touch reviews. They could be in-depth reviews. They could be looking at governance arrangements —

The Chairperson (Mr O'Toole): Open-book exercises, dare I say it?

Mr Simpson: Perhaps, yes. There could be wider programme effectiveness reviews, so there is a broad spectrum. What we are trying to gauge is how to present that in the most meaningful way possible to understand that review activity and where that has taken Departments to with their ALBs.

Ms Toner: The other question is around the outcome of that review activity and whether it requires a public bodies Bill.

The Chairperson (Mr O'Toole): There is no decision yet on whether there will be a public bodies Bill. Have you made any recommendations to the Finance Minister yet about what he could or could not do? Are you still going through the raw data?

Ms Toner: We are still at the validation stage, yes.

The Chairperson (Mr O'Toole): Then, at a certain point, you will produce advice or options for the Finance Minister with your findings. I am not saying that this will definitely happen, but are you likely to say, "We have established that there is a cohort of bodies where we are pretty confident that there are multiple HR functions that could be relatively easily merged", and it would be practical, or things like communications functions or other —? Are you seeing much of that? Are you seeing many easy, quick wins for improving back office functions?

Mr Simpson: It is not really about quick wins. We are trying to establish the extent to which they are using shared services and to understand why that might not be practicable. We need to establish whether smaller organisations are using shared services. In bigger organisations, there may be a critical mass, and it might make more sense for them to have their own internal services for those functions. It is not that zero is bad, and 100% use of shared services is good. We want to have more richness of understanding of that data.

The Chairperson (Mr O'Toole): Were there any shocks or surprises when you were reviewing the arm's-length bodies? For example, did you find out that some random arm's-length body that people had forgotten about is toiling away with a vast number of HR professionals, internal auditors or press officers, or has it been what you would have expected?

Mr Simpson: We are not in a position now to comment on a dataset that is still being validated. I do not want to give a view on something before I have total confidence in the data or before I finally present it to the Minister. The richness and the value in it for us is having that overall picture. We have not previously had a comprehensive list of public bodies that is held centrally by Departments.

The Chairperson (Mr O'Toole): Did you say that there are 113?

Ms Toner: There are 139 public bodies of various classifications. About 84 of those are non-departmental public bodies (NDPBs), which is what you would classify as the main ALBs. We did not take all those forward for the second phase of the exercise. We excluded Executive agencies and North/South bodies. For the second phase of the exercise, data was collected for 119 bodies.

Just to manage expectations, I will say that we have not reviewed each body and its HR functions. It is fundamentally being done to get a landscape picture and to ask whether they are using shared services, and, if so, which ones and to what percentage, rather than going in-depth into each body to understand how they are using them.

The Chairperson (Mr O'Toole): We are not necessarily talking about abolishing bodies or reducing the headcount, but you must at least have a vague sense that some savings could be made. Theoretically, savings can always be made in any organisation, but do you at least have an indication that you could make savings in broad terms, or do you not want to venture that yet?

Mr Simpson: The questions are not around where money can be saved. They are: have you undertaken a review? Can you give us recommendations? Where are those recommendations? Have they been taken forward? Are there action plans? One of the main focuses for us is whether a public bodies Bill would be a useful vehicle to enable them to do that, or whether a Department feels that it does not need a public bodies Bill and that it can advance it through its own legislation.

The Chairperson (Mr O'Toole): Some of the bodies are non-statutory and were created by Ministers, with or without Executive agreement, to do a specific function. They might have a statutory function, but they are not in statute. Is that right?

Ms Toner: That is the case for some of those 140. The public bodies Bill was modelled on the Westminster 2011 Public Bodies Bill. That was the intention at the time. It was very much for non-contentious bodies. If there was a backlog of reform, for want of a better word, that needed to be done, it could be done through that vehicle rather than through individual primary legislation. The bodies would have been named in the public bodies Bill. That is why we really need to understand the landscape of the reviews and whether they have been done, and whether Departments have bodies that they have identified that they would want to change that would benefit from such a legislative process.

The Chairperson (Mr O'Toole): I will bring in others now.

Ms Forsythe: Thank you all very much for coming. Following on from the theme in our previous session with the head of the Civil Service, you are sitting in a centralised role, in the Department of Finance, gathering all the data on all those things to inform other people, but you are not making decisions in respect of the whole Civil Service.

The Committee got the list of arm's-length bodies and quangos in February. I pulled it up, and I appreciate that there are 140 bodies on it.

When I looked at the list, I saw a lot of names of bodies that I had not heard of — I did not know that they existed — so it is really useful to have that. Alongside that, it would be helpful for us to know the size and scale of each body. It is not just about us. I come back to the point that, although the Finance Committee looks at it centrally, we try, as we do with the Budget, to support every Committee to scrutinise its Department. I will take DAERA as an example just because the list is in alphabetical order, and I have it open. Three or four bodies are listed with an overview of what they do. If there were another column to show how many people the body employs and what its running costs are, and the AERA Committee had its hands on the list, it could open a good conversation with AERA officials for scrutiny by asking, "What are we doing with this body, and why?".

A lot of the bodies are legacy bodies, and I am concerned about that because it feels as though the default position in our structures is to form new bodies. We have new commissioners for climate change and for languages, and we have just passed legislation that makes the Fiscal Council a stand-alone organisation. The need for the Fiscal Council to stand alone and be independent for financial scrutiny purposes is well understood and has been established by the Finance Committee, but, when a new function arises, it is right to look at it and ask, "Is a new body needed for this, or can it be done within existing structures?".

Do you think that the need to do that is well understood across the board? Given that you are doing the review, does everyone think that you are going to tell them what to do, or do people accept that, when you put all the data in place, there will be a bigger picture that everyone needs to stand back and look at from the perspective of public-sector transformation by asking, "Do we need all this? Are we delivering the best public services because of it?"?

Mr Simpson: Your point on data is an important one. We have been collecting data on workforce and budget to provide context. I do not anticipate that Departments will say to us, "You tell us what to do". That was a failing of the previous exercise, which was an internal desktop exercise. Realistically, how could we, sitting in the Department of Finance, tell another Department, "You seem to have a number of small ALBs, but you have some big ones; maybe you should rationalise" when it might not make sense for two bodies to be merged or for one to be abolished?

The key thing that we want to get out of the review is transparency. The list will be there for Departments, because, even within a Department, sponsorship teams will have different arrangements whereby an individual team looks after an individual body. Bringing the review together provides transparency for Departments, which can see their bodies listed with their size and scale, and for us to look across the piece from the centre. Transparency often influences thinking and changes behaviours, and we have tried to bring that in along with our focus on asking, "Do we need to progress a public bodies Bill? Would it be useful?". I agree totally.

Ms Forsythe: It is really important. You know a lot more about these things than I do, but I was surprised by the size of the list. I found it useful to see which bodies are NDPBs and which are advisory or in the other categories. With the extra data, the list will be a really useful tool for everyone's scrutiny. I am keen to see that when it comes through and whether there is anything that we can do. As I said, sitting centrally, the Committee has done a lot of good work with other Committees to get some outputs on the Budget. It is not all about criticising; it is about seeing that we have a lot of legacy bodies and asking whether, in some cases, it is the best use of our resources to deliver our public services in that way.

Thank you for that. I am keen to watch this progress and to see the numbers come through.

Mr Simpson: One thing to add to that, Diane, is that Departments have been working well with us, so the time that the review has taken does not reflect poor engagement from Departments. That is purely about the volume of data and the way in which it has to be interrogated. As I said in responding to the Chair's question, we need to make sure that we describe and characterise things accurately.

Ms Forsythe: And bring everybody with you.

Ms Toner: Yes.

Ms Forsythe: Absolutely. Thank you.

The Chairperson (Mr O'Toole): No further members have indicated that they wish to ask a question. Deirdre, do you want to come in?

Miss Hargey: Yes. On the contents of a public bodies Bill, are you aware of whether any Departments have done a deeper dive into their arm's-length bodies?

Ms Toner: That is, hopefully, what we will get from the exercise. It will validate what type of reviews have been done, whether reviews have been done and what they include. One of the questions is about the type of review. As Tony said, there is a spectrum. Some bodies are part of very big reform programmes. It is about understanding that. Through a public bodies Bill, there would be an opportunity to make structural changes to bodies by abolishing or merging them, but a programme of work is needed to identify which bodies, and those would be named in the Bill. The intention is that the Bill would be live for five years. There is a mechanism for Departments to make changes to their bodies through primary legislation. The Bill would just be for the cohort of bodies identified for which we want to do something that may make the process a little more streamlined.

Miss Hargey: As part of that, will you identify potential bodies —?

Ms Toner: Part of it is about identifying the bodies that Departments want included in the Bill.

Miss Hargey: Thank you.

The Chairperson (Mr O'Toole): As for next steps, even if the Executive agree this quickly, I suspect that the Bill will not be introduced and certainly not passed by the end of this mandate. Therefore, what are you planning as potential outputs ahead of the next mandate in order to get the steer of the Finance Minister and potentially the Executive on planning for a future Executive in a future mandate?

Mr Simpson: If there is the need for that legislation, it will need to be factored in to the legislative programme. We are at the step before that, where we need to establish whether the legislation is required. To come back to Diane's point, even if it is established that the legislation is not required at this point, it will be valuable to have transparency on the data and to know where Departments are with their ALBs and to have that available centrally and in Departments in order to enable discussions between Ministers and their officials and between Departments and our Minister.

The Chairperson (Mr O'Toole): OK. That was useful, albeit I would really like to have an evidence session when you have verified the data a bit more. I appreciate your being very patient in waiting to give us evidence, but it will be more useful to have an evidence session when you have data or observations on, for example, whether any arm's-length bodies have good duplication such as the use of shared services — well, that is not good duplication; it is the opposite, but you know I mean — where they are working together and whether there is duplication of policy. Duplication of shared services is sometimes an unavoidable or natural consequence of setting up an organisation, and you may or may not, for legitimate reasons, be able to consolidate and share services in some cases. We are particularly interested to know whether there is duplication of policy or operational delivery, which there may be, and we are keen to hear whether savings can be made in a way that is not about simply reducing a service but is more optimal. If you can return to us when there are observations and when the data processing is a bit less raw and a bit more digested, that will be helpful.

Mr Simpson: Yes, we will come back to the Committee as soon as we can.

The Chairperson (Mr O'Toole): Thanks very much. We appreciate your time, and thanks for waiting.