Developments in UK executive agencies: Re-examining the ‘disaggregation

Abstract

Executive agencies remain key players in UK government. However, reflecting their declining political profile, little research has emerged on the longer term evolution of this key new public management (NPM) infrastructure. Although widely cited, the ‘disaggregation–reaggregation’ thesis – which posits that a significant reversal has taken place, following the extensive agencification of the 1990s – has received little systematic evaluation. As political interest in the agency model reawakens under the Coalition Government, it is necessary to understand how the agency landscape has evolved while outside of the limelight. Accordingly, this article examines developments across 1988–2010 along two dimensions: ‘structural’, relating to organisational boundaries; and ‘functional’, relating to the department–agency task division. Viewed within this structural–functional framework, considerable merit is found in the disaggregation–reaggregation thesis, although not entirely in the terms in which it has come to be accepted. The limited extent of formal ‘de-agencification’, particularly, challenges existing reports of the expansion and decline of agencies, and raises important issues for the future research agenda.

Keywords

agencification disaggregation New Labour new public management UK

Introduction

Following the high-profile programme of agencification which the UK government implemented from the late 1980s, the executive agency model has more recently sat outside of the political and academic limelight. With the completion of the ‘Next Steps’ agency creations in 1998; the cessation of the annual Next Steps reports; the abolition of the ‘quinquennial’ review process; and without any government-wide review since 2002, the agency format has, as Gains (2003: 17) predicted, lost the ‘distinct and celebrated identity’ it formerly enjoyed. In academia, compared with the torrent of research pertaining to the first decade of agencification (for instance Gains, 1999; Greer, 1994; Hogwood, 1995; James, 2003), recent work has been rather scant. Latterly, agencies most often form an aside in broader discussions of arm’s-length government (Flinders, 2008; Gash et al., 2010), thereby leaving many questions unanswered. In particular, the long-term evolution of agencies and the agency landscape remain largely uncharted, and as a result, the implications for broader – paradigmatic – developments in UK public administration are poorly understood.

As the Coalition Government embarks upon its programme of fiscal consolidation and democratic renewal, political interest in the agency model has reawakened. Within a year of the coalition taking office, seven new agencies were announced (Jenkins and Gold, 2011), including four in the agency-barren Department for Education. The Public Bodies Review, aimed at reducing the number of non-departmental public bodies (NDPBs), has, in addition, transferred many smaller quangos into existing agencies (Cabinet Office, 2011). The new government sees executive agencies as the ‘default delivery option’ for central government services which require some ‘operational independence’ (Minister for the Cabinet Office, 2011: 22), and it is committed to reviewing their accountability and effectiveness as part of a wider roll-out of ‘autonomous’ organisational forms (HM Government, 2011: 41–2).

Research interest also is beginning to revive (James et al., 2011; James et al., forthcoming). However, at present, the gap in the UK’s agency story has not received sufficient attention, meaning that the incipient academic and political renaissances currently lack context. There is a general consensus that some rollback has occurred, although, in the absence of any systematic review, its magnitude and character remain contested. One influential paper, for instance, argues that ‘from the large-scale disaggregation of the early 1990s policy seems to have almost completely reversed itself, in practice if not in rhetoric’ (Talbot and Johnson, 2007: 55), while another reports only a ‘modest “de-agencification” trend’ (James et al., forthcoming: 10). Accordingly, this article examines changes to agencies and the agency landscape between 1988 and 2010, in order to re-evaluate existing accounts of the UK’s now prolonged courtship of this mode of government administration.

After reviewing the original Next Steps programme, the paper outlines the ‘disaggregation–reaggregation’ thesis. Drawn from the dominant existing account of the ‘post-Next Steps’ period, this posits a substantial policy reversal, evidenced primarily by the return to larger organisational forms. To explore the underlying complexity and multidimensionality of this trend, the article proceeds to explore agency developments along two aspects: ‘structural’, relating to the separation of organisational entities; and ‘functional’, relating to the department–agency task division. The conclusion, in brief, is that the disaggregation–reaggregation thesis has considerable merit when viewed within the structural–functional framework, provided that ‘reaggregation’ is not equated with ‘de-agencification’ and a relapse to a ‘pre-managerialist’ condition. State bureaucracies continue to be heavily ‘agencified’, and it is therefore the evolving manner of this agencification which, going forward, should attract considerable attention.

Executive agencies

The rise of executive agencies has been well documented (Gains, 1999; Goldsworthy, 1991). In the main, the model owes its introduction to the Thatcher Government’s concern that repeated attempts at civil service reform were largely failing to instil a managerial culture into Whitehall. In 1986, the Efficiency Unit examined what further measures were necessary. Its now famous Next Steps Report (Efficiency Unit, 1988) concluded that fundamental changes were needed to the incumbent Whitehall structure, which, perversely, had required officials to deal with policy and parliamentary matters as well as manage complex service delivery. Political pressures invariably led to the subordination of the latter, and thus the report recommended that ‘agencies’ be established as separate delivery organisations, headed by personally accountable chief executives charged with efficient and effective service delivery. Responsibilities and delegations would be formalised in ‘framework documents’, with a presumption in favour of significant operational autonomy (Efficiency Unit, 1988: 9).

The 1990s saw rapid progress towards achieving the agency system envisioned by the Efficiency Unit. By the last days of the Major Government there were more than 130 agencies (James, 2003: 56). It was then announced that the Next Steps programme would end (Chancellor of the Duchy of Lancaster, 1997). Thereafter, the benefits of agencification were broadly accepted by the Labour Government elected in 1997, although a refocusing on collaborative working was sought (Minister for the Cabinet Office, 1999). Thus, while agencies continued under New Labour, a contrasting narrative developed on their role within government (Gains, 2003; see also Schick, 2002).

The ‘disaggregation–reaggregation’ thesis

Talbot and Johnson (2007) argue that the trend of the 1990s towards disaggregating public organisations into multiple smaller units has latterly undergone a significant reversal. This represents a ‘cyclic’ fashion swing back towards ‘big government’. Although they acknowledge that ‘the new big government differs in significant ways from the old’ (2007: 53), the suggestion is nonetheless that some reversal has taken place. Executive agencies are just one instance of this. Several examples of reaggregations are cited as undermining the original agency concept, including: the merger of the Employment Service and Benefits Agency into Jobcentre Plus – a single, much larger agency with questionable autonomy; the development of a single, department-wide framework document for the social security agencies; and the move away from operating on Next Steps lines in the UK tax authorities. Moreover, at a macro level, reductions in the agency population and in the proportion of the civil service in agencies were noted (Talbot and Johnson, 2007: 56). Collectively, these developments signal both a return to larger organisational forms and a departure from the agency model.

Despite its relatively modest empirical basis, this research has proved influential. It remains the leading account of ‘post-Next Steps’ developments, cited by Pollitt (2007: 532) when describing how ‘the fashion has swung towards and then away from the semi-autonomous agency format’, and Halligan (2007: 227), who writes of ‘the reversal of the agencification trend internationally, now most apparent in Britain’. In an earlier paper, Dunleavy et al. (2006: 470) also noted the rollback of agencification. This, they argue, is evidence of a paradigm shift away from NPM. As they explain, contrary to initial expectations, agency coverage stabilised at just over half of the civil service, reflecting a general questioning of the performance of agencies and the advisability of ‘decoupling’ policy systems.

The existing literature thus portrays the evolution of UK agencification as a tale of expansion and decline. Such ‘cycles’ have long been observed in public administration, particularly regarding the perennial centralisation–decentralisation debate (Pollitt, 2005). Nevertheless, until now, little attempt has been made to go beyond high-level headcounts and select examples in order to test more fully the disaggregation–reaggregation thesis.

Before proceeding to such an evaluation here, it is necessary to formulate some conceptual distinctions. Specifically, differentiation is needed between a narrative of agencification–de-agencification on the one hand, and disaggregation–reaggregation on the other. Strictly speaking, the latter refers to machinery-of-government changes that can be achieved through a variety of reorganisation strategies (including de-agencification and agency-to-agency mergers), while the former denotes a specific process whereby functions previously removed from unitary bureaucracies (agencification) are returned to them (de-agencification). This interpretation aligns with the official definition of de-agencification as ‘[the] return of the agency and its functions to within its sponsoring department’ (Cabinet Office, 2006: 8). De-agencification and disaggregation are, therefore, related yet distinct concepts. Any link between them requires empirical verification. Moreover, moving away from purely structural concerns, formal de-agencification is not a requisite for fundamentally altering the interaction of policy and delivery units within the central government policymaking process. Changes to the department–agency task division can modify the process of government without resorting to changes to its structural composition. Overall, then, equivalence between the disaggregation–reaggregation and agencification–de-agencification theses cannot be assumed, but rather is a matter for empirical investigation.

Investigating patterns of disaggregation

In the original Next Steps proposals, the concept of disaggregation featured at two main levels, identified here as the ‘structural’ and ‘functional’ dimensions. The ideas embodied by these two dimensions are, moreover, key to the wider NPM movement. By defining reaggregation along either dimension as observable developments in the opposite direction to that specified for disaggregation, the structural and functional dimensions together form a dynamic framework through which the disaggregation–reaggregation thesis can be tested systematically.

The structural dimension

Structural change is a central mechanism of administrative reform, often involving the ‘merging or splitting [of] public sector organizations’ (Pollitt and Bouckaert, 2004: 8). The structural dimension thus refers principally to changes in organisational boundaries. Specifically, structural disaggregation involves the dismantling of unitary bureaucracies into multiple, organisationally-distinct units – a process considered ‘doctrinal’ to the NPM movement (Hood, 1991). This formed the mainstay of the original Next Steps proposals:

The central civil service should consist of a relatively small core engaged in the function of servicing Ministers and managing departments … Responding to these departments will be a range of agencies … concentrating on the delivery of their particular service. (Efficiency Unit, 1988: 15)

If disaggregation along the structural dimension implies the fragmentation of bureaucracies into a multiplicity of smaller, quasi-independent organisations, structural reaggregation, by implication, involves reintegrating related entities to form larger, composite bureaucracies – a clear departure from NPM’s mantra of ‘small is beautiful’ (Talbot and Johnson, 2007). However, as already reasoned, such reaggregation is not achieved exclusively by formal de-agencification.

The functional dimension

With functional disaggregation, the focus turns from organisational boundaries to the department–agency task division. In line with its public choice theory and political-primacy background, NPM advocates institutional arrangements which separate policymaking and implementation (Dollery, 2009; Stewart, 1996). As Christensen and Lægreid (2006a: 12) describe, ‘role purification’ sees ‘policy formulation, service delivery, purchasing and regulation … split up and allocated to specific agencies according to the principle of “single-purpose organizations”’. Translating this to the present framework, the institutional disconnection of policymaking and implementation constitutes functional disaggregation. This was also a central component of the Next Steps Report’s recommendations, as one of its authors recently confirmed: ‘Next Steps philosophy … saw policy remaining firmly the responsibility of the department, with the execution of those policies the task of the agency’ (Jenkins and Gold, 2011: 14). Functional reaggregation thus implies the organisational reunion of policymaking and implementation, engendering a commensurate loss of role ‘purity’. As the reabsorption of functions into departments, de-agencification is the most obvious way of achieving this reunion. Nonetheless, this is not the only means of re-coupling policymaking and implementation, as the empirical material below testifies.

The remaining sections of the article operationalise this framework in order to explore more thoroughly the trajectory of agency developments in the UK.

Structural disaggregation and reaggregation

Structural disaggregation involves breaking apart organisational entities, primarily by removing executive functions from unitary departments. In order to chart developments along this dimension, Table 1 presents a chronology of UK agency landscape changes between 1988 and 2010. Yearly figures are provided for the number of agencies established, along with the number of closures. Drawing partly on official literature (Cabinet Office, 2006) and existing research (Massey and Pyper, 2005: 90), dissolutions are further subdivided between four categories: privatisation (by organisational sale or wholesale outsourcing); merger (at the agency level); reintegration (into a sponsoring body); and miscellaneous. The annual net change and year-end total are also detailed.

Table 1.

UK agency landscape^a

Year	Agency Launches^b	Agency Dissolutions					Net Change	Year-end Total
Year	Agency Launches^b	Privatised	Merged^c	Reintegrated	Misc.^d	Total Closures	Net Change	Year-end Total
1988	3					0	+3	3
1989	6					0	+6	9
1990	25					0	+25	34
1991	23					0	+23	57
1992	19					0	+19	76
1993	16	1				1	+15	91
1994	12				1	1	+11	102
1995	14	3	4			7	+7	109
1996	31	8	1		2	11	+20	129
1997	12	3				3	+9	138
1998	4		2	1	1	4	0	138
1999	6		6	1	2	9	−3	135
2000	5		3	6		9	−4	131
2001	6		4	3	2	9	−3	128
2002	3		2	2	1	5	−2	126
2003	10		6	1	2	9	+1	127
2004	3		2	4		6	−3	124
2005	6		1	6	3	10	−4	120
2006	5		4	5	1	10	−5	115
2007	6		8	8	2	18	−12	103
2008	6		8	6	3	17	−11	92
2009	3		3	4	1	8	−5	87
2010	2			2	3	5	−3	84
Totals	226	15	54	49	24	142

Includes UK central government and devolved administrations.

Includes agencies formed from mergers. Excludes departments run on ‘Next Steps’ lines and cases of name change.

For merged agencies, all original bodies are listed as closed and a new agency is counted.

Includes agencies closed for further disaggregation; those whose functions were dropped from government altogether (without being privatised); and those endowed with alternative statuses.

Several cautionary remarks about the data are needed. First, reflecting the frequently ‘messy’ character of machinery-of-government changes, closure classifications are made according to the dominant direction of transfer for an agency’s functions. For example the majority of HM Stationery Office was sold in 1996, though a small part was retained. This is listed simply as a privatisation. Accordingly, the chronology should be read as an abstraction, useful for analytic purposes, rather than as a definitive register of events. Second, in the absence of any official agency registry for 1988–2010, the chronology’s absolute coverage cannot be guaranteed, although the numbers presented in Table 1 are internally consistent.

Overview

The UK agency population (including the territories and, latterly, devolved administrations) grew in the decade after 1988 to peak at 138 in 1997 and 1998. By the end of 2010, the population fell to 84, with the largest net reductions in 2007 and 2008 (Figure 1). Since 1997, 2003 was the only year to see a net increase (of one agency). James (2003: 57) reports that agency employment (excluding the Northern Ireland Civil Service (NICS) and departments adopting Next Steps principles) reached 285,000 in 1997 – 60% of the Home Civil Service. Adopting the same exclusion criteria, the number of full-time equivalent (FTE) civil servants in agencies in 2009–10 totalled approximately 303,000 – 62% of the Home Civil Service.¹ If the NICS is included, the figure is 315,050. Together, the five largest agencies employed nearly 207,000. The smallest agency has just 38 FTE.

Figure 1.

UK agency population, 1988-2010.

Agency launches

Between 1988 and 1997, Next Steps produced 161 agencies. Nominally, the majority of launches involved newly disaggregated functions, although in practice some agencies already existed as separate organisations (Talbot, 2004). Latterly, several were also formed as a result of small-scale rationalisations of already ‘agencified’ functions. As for the ‘post-Next Steps’ period (1998–2010), 65 further agencies were created by the UK government and the devolved administrations. These are also divided between those housing newly decoupled functions and those resulting from rationalisations. A significant example of new agencification is the Immigration and Nationality Directorate of the Home Office, which, having been considered poorly suited to agency status during Next Steps (OPSR and HM Treasury, 2002: 16), was finally hived-off in 2007 (Border and Immigration Agency, 2007). This reduced the core department’s staff by approximately 18,000 and therein constitutes a notable example of continuing structural disaggregation during the period characterised by the thesis as predominantly ‘reaggregating’. Other ‘new’ agencies came from the restructuring of public bodies (Health Commission Wales) or evolving public policy demands (Asset Protection Agency). Nevertheless, in contrast with the Next Steps programme, more than half of launches after 1998 were rationalisations of the existing agency population.

Agency closures

In the first decade of agencification, privatisation was the main factor behind dissolution. Of the 15 such closures listed in Table 1, 12 constitute full privatisations and three involve major contracting-out initiatives. Table 1 records no direct privatisations since 1997, although, as Burnham and Pyper (2008: 146–7) demonstrate, some functions formerly undertaken by agencies have, since dissolution, been moved to the private sector.

In addition, 54 closures have been classified as due to agency-to-agency mergers; 49 as reintegrations with sponsors; and 24 as miscellaneous. Generally occurring after 1997, these developments suggest a mixed picture as to the manner of the agency landscape’s evolution. While there is strong support for the broad reaggregation narrative, absorptions into sponsoring bodies constitute only one component of this. To probe the character of this limited ‘de-agencification’ further, it is necessary to unbundle the data into the constituent sub-polities of the UK. Existing work has already demonstrated that policy towards arm’s-length governance generally progressed differently in Scotland, Wales and Northern Ireland following devolution (Flinders, 2008). The component data presented below support this assessment for executive agencies specifically, revealing some underlying patterns hidden within the main chronology.

Scotland

Closely paralleling political events, Scotland saw no major rationalisation until 2008. In 2001, the Scottish Executive proposed reducing the number of NDPBs by returning functions to either the core government or an executive agency (Scottish Executive, 2001: 6). Agencies were painted favourably since they allow ‘a strong emphasis on the delivery of outputs’ while remaining ‘an integral part of the Executive’ (Scottish Executive, 2001: 18–19). Across 2001–06, the number of Scottish agencies duly rose to 18 (Table 2). However, with the change of administration in 2007 came renewed concern that Scotland had too many disparate public bodies. A ‘Simplification Programme’ was launched, and agencies were no longer immune to the cull. Indeed, a stated aim was to ‘[enhance] links between policy development and delivery’ by bringing these together in government (Scottish Government, 2009: 12). Six agencies were reabsorbed in 2008 and 2009, although two new agencies were also designated. By the end of 2010, Scotland had 13 agencies, indicating that the extent of de-agencification remained limited.

Table 2.

Agencies in Scotland

	1990	1991	1992	1993	1994	1995	1996	1997	1998	1999	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010	Total
Launches	1	2	1	3	1	1	0	1	0	0	0	2	1	1	1	2	1	0	1	1	0	20
Reintegrations																			3	3		6
Misc.																					1	1
Net Change	+1	+2	+1	+3	+1	+1	0	+1	0	0	0	+2	+1	+1	+1	+2	+1	0	−2	−2	−1
Total Agencies	1	3	4	7	8	9	9	10	10	10	10	12	13	14	15	17	18	18	16	14	13

Wales

Wales stood apart during Next Steps, only gaining one agency of its own. Three further Welsh agencies were launched after devolution, although by 2005, three had also been lost (Table 3). Despite the rollback in Wales predating that in Scotland, their agency stories display several similarities. In particular, no agency-to-agency mergers have occurred, making de-agencification the dominant reaggregation mechanism. Furthermore, in both countries, the changes occurred against a wider backdrop of ‘quangocracy’ reforms (for details of this in Wales, see Thomas, 2004).

Table 3.

Agencies in Wales

	1991	1992	1993	1994	1995	1996	1997	1998	1999	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010	Total
Launches	1	0	0	0	0	0	0	0	0	1	0	0	2	0	0	0	0	0	0	0	4
Reintegrations													1	1	1						3
Net Change	+1	0	0	0	0	0	0	0	0	+1	0	0	+1	−1	−1	0	0	0	0	0
Total Agencies	1	1	1	1	1	1	1	1	1	2	2	2	3	2	1	1	1	1	1	1

Northern Ireland

Agencification in Northern Ireland was conditioned by the region’s socio-historical and political particularities, including the existence of a separate civil service (NICS). By 1998, 25 agencies had been established: three for the UK government’s Northern Ireland Office; and 22 as part of the NICS (Minister for the Cabinet Office, 1999: 252). Unlike in Scotland and Wales, net agency reductions began soon after 1999, though the decline was not dramatic (Table 4). Between 2003 and 2005, the population stabilised at 22, before a second period of reaggregation followed the Review of Public Administration (RPA, 2006). This came in response to accusations that Northern Ireland was vastly over-administered (Knox and Carmichael, 2006), and resulted in a major rationalisation through a combination of mergers and reintegrations, leaving 13 agencies by the end of 2010.

Table 4.

Agencies in Northern Ireland

	1990	1991	1992	1993	1994	1995	1996	1997	1998	1999	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010	Total
Launches	1	2	3	3	0	5	10	0	1	0	0	0	0	1	0	0	0	2	0	0	0	28
Mergers																		4	2			6
Reintegrations											1		2				2		1	1		7
Misc.													1					1				2
Net Change	+1	+2	+3	+3	0	+5	+10	0	+1	0	−1	0	−3	+1	0	0	−2	−3	−3	−1	0
Total Agencies	1	3	6	9	9	14	24	24	25	25	24	24	21	22	22	22	20	17	14	13	13

UK central government

As well as highlighting the different evolutionary patterns in Scotland and Wales (which opted for de-agencification) and Northern Ireland (which implemented a mixture of de-agencification and mergers), the removal of the territorial agencies clarifies the picture for UK central government (Table 5). Closure by merger is still the most prominent category, accounting for 48 dissolutions since 1988, 43 of which came after 1997. By contrast, the number of reabsorptions falls to 33, reflecting the prevalence of de-agencification elsewhere. Miscellaneous closures sum to 21.

Table 5.

Agencies in UK central government

	1988	1989	1990	1991	1992	1993	1994	1995	1996	1997	1998	1999	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010	Total
Launches	3	6	23	18	15	10	11	8	21	11	3	6	4	4	2	6	2	4	4	4	5	2	2	174
Privatisations						1		3	8	3														15
Mergers								4	1		2	6	3	4	2	6	2	1	4	4	6	3		48
Reintegrations											1	1	5	3			3	5	3	8	2		2	33
Misc.							1		2		1	2		2		2		3	1	1	3	1	2	21
Net Change	+3	+6	+23	+18	+15	+9	+10	+1	+10	+8	−1	−3	−4	−5	0	−2	−3	−5	−4	−9	−6	−2	−2
Total Agencies	3	9	32	50	65	74	84	85	95	103	102	99	95	90	90	88	85	80	76	67	61	59	57

Language evoking the ‘joined-up government’ agenda has often rationalised central government mergers. The broad idea, which surfaced early in New Labour’s term of office, was that coordination in public services needed to be restored following the fragmentation engendered by managerialist policies (Cabinet Office, 1999a; see Bogdanor, 2005). For agencies in particular, it was suggested that ‘An issue for all … to consider is whether there is scope for improving performance by cooperation with bodies beyond the agency boundary’ (Minister for the Cabinet Office, 1999: v–vi). Different tools for improving horizontal (agency-to-agency) coordination require different degrees of organisational change. For example, James (2003: 136–40) distinguishes between ‘sporadic links’, based on voluntary agreements between organisations, and ‘networks’, which involve ‘more enduring partnerships’ and which, taken to the extreme, result in mergers. Similarly, Dunleavy (2010: 16–19) posits a seven-stage model for joining up services, the last stage being ‘mergers, take-overs or integration’. Thus, changes along the structural dimension, as posited here, represent more dramatic forms of coordination-improvement mechanisms.

Although there has been no central policy seeking mergers specifically on this basis, ideas of ‘joining-up’ often accompanied such developments. The formation of the Maritime and Coastguard Agency, for example, allowed ‘synergies’ between the separate Coastguard Agency and Marine Safety Agency to be exploited (Minister for the Cabinet Office, 1999: 141). More recently, the amalgamation of the Pensions Service and the Disability and Carers Service was said to ‘[provide] more holistic services to those receiving pension age benefits’ (Disability and Carers Service, 2008: 4). It thus appears that, in attempting to mitigate the fragmentation brought about by the agency system in the 1990s, considerable structural upheaval to the agency landscape was achieved – along with diminished task-specificity – without, however, reversing the broad policy of agencification.

Of the 33 departmental reintegrations, 24 were in the Ministry of Defence (MoD). During the 1990s, this department thoroughly embraced the agency model (Hogwood, 1995). Throughout the following decade, however, the population steadily declined – initially through mergers, but increasingly through reintegrations – from its high point of 44 agencies, to just nine by the end of 2010. Questioned in 2006, an MoD official offered a quasi-transaction cost rationale for this pronounced de-agencification, reporting a concern with ‘the overheads that go with a very decentralised structure’, and a realisation that ‘the decentralising tendency in the Department went perhaps a little too far in the 1990s’ (see House of Commons Defence Committee, 2006: 19).

Looking to other departments, there have been no similarly coherent programmes of agency rollback. Most non-MoD reintegrations took place before 2001 and involved low-profile bodies from various departments. Therefore, in contrast to Scotland and Wales, ‘de-agencification’ in Whitehall has been restricted to a particularly agencified department and some tidying in the wake of the rapid initial roll-out of agencies.

As for miscellaneous closures, many of these involved agencies attaining other arm’s-length classifications, either individually (entailing continued disaggregation), or as part of a merger (sub-departmental reaggregation). These changes do not constitute de-agencification proper; their functions remain at ‘arm’s length’ – or even at greater arm’s length – so that, while diminishing the agency population, the effect on the overall sphere of delegated governance is minimal.

Reviewing the structural dimension

Measured on the structural dimension, the disaggregation–reaggregation thesis boasts considerable merit. The amalgamation of formerly disparate organisational entities has indeed been a central, if somewhat silent, trend under New Labour. However, a more nuanced assessment of changes to the agency landscape – and, specifically, the extent to which ‘de-agencification’ has occurred – is only possible when the aggregate data are unbundled by sub-categorising closures and by looking at sub-polities. Despite some differentiation, it is clear that agencies remain key players in UK public service delivery (including in Wales, where many central government agencies operate). Broadly speaking, de-agencification has been a relatively minor force for reaggregation compared with agency-level mergers, thus supporting the argument for the non-equivalence of the disaggregation–reaggregation and agencification–de-agencification narratives.

Functional disaggregation and reaggregation

In turning to the second component of the analytic framework, the evaluation of the disaggregation–reaggregation thesis proceeds beyond the terms of the argument expounded by its original authors, looking not only at organisational boundaries, but also at the nature of the department–agency task division. Although, officially, Next Steps sought the institutional separation of policymaking and operations, existing research has highlighted the practical difficulties experienced in trying to achieve this (Greer, 1994; Hogwood, 1995). A review in the mid-1990s, for example, found that ‘half of agencies have policy functions either resulting from their framework document … or de facto’ (Trosa, 1994: 3). This calls into question the extent to which functional disaggregation was originally achieved, and thus whether any subsequent reversal can now be measured. Nevertheless, the Labour Government’s early discourse on agencies focused largely on the problems engendered by a policy-implementation dichotomy in government. In particular, the ‘vertical’ aspects to the joined-up agenda were predicated on the idea that a detrimental schism had arisen which sat awkwardly with the new, holistic vision of policymaking:

‘Whilst organisational and management changes over the past decade have emphasised the separation of policy making and policy implementation, “modernised” policy making demands that they be re-integrated into a single, seamless, flexible process’ (Cabinet Office, 1999b: 9).

Labour’s Agency Policy Review similarly found that ‘the gulf between policy and delivery is considered by most to have widened’ (OPSR and HM Treasury, 2002: 5). Thus, although not achieved universally, functional disaggregation appears to have been implemented sufficiently well during the Next Steps era to have subsequently concerned advocates of joined-up, ‘seamless’ policymaking. Moreover, Labour’s search for this new policymaking ideal within its broader ‘modernisation’ programme (Cabinet Office, 1999a, 1999b) implies that functional reaggregation was actively sought during their term of office.

In order examine the extent of functional (dis-/re-)aggregation under Labour, agency framework documents have been examined to establish how agencies are involved formally in the policymaking process. Although these are, at best, only indicative of practice, they provide a useful account of the changing ‘official’ image of agency policy activities.

Given the political nature of New Labour’s ‘modernisation’ project, the sample is confined to UK central government. The most recent frameworks for 47 of the 58 agencies operating at the end of the New Labour Government in 2010 have been examined and classified according to the level of policy responsibilities devolved to the agency (Table 6). Most documents were authored by Labour but, reflecting the declining salience of agencies, some predate the 1997 election. Of those agencies that were not analysed, five belong to the Department for Transport’s Motoring and Freight Services Group, which now operates a single framework. The ‘grouping’ of agencies in this manner was actually intended to ‘strengthen the role and position of the agencies, ensuring they are fully engaged in shaping as well as delivering policy’ (Department for Transport, n.d.) – in itself, a clear attempt at functional (and quasi-structural) reaggregation. However, this multi-agency framework proved unsuitable for inclusion in the main analysis. For the remaining six unclassified agencies, appropriate frameworks could not be sourced.

Table 6.

Formal policy responsibilities of UK central government agencies

Agency undertakes significant levels of policy formulation and development work		Agency undertakes periodic policy development work, either assisting the department with the formulation of ministerial policy advice, or being consulted on operational aspects of policy	Agency has no formal policy responsibilities
Agency leads on policy and/or legislative matters	Agency and department share policy duties (agency may lead in certain areas and/or is a key ministerial advisor)		Agency has no formal policy responsibilities
FERA (2009) Identity and Passport Service (2009) National Fraud Strategic Authority (2008) National Measurement Office (2010) Office of the Public Guardian (2009) UK Intellectual Property Office (2008)	Defence Storage and Distribution Agency (2003) Defence Support Group (2008) Defence Vetting Agency (2006) Dstl (2006) Forest Research (2003) MHRA (2004) NOMS (2008) Ordnance Survey (2004) Service Children’s Education (1996) Skills Funding Agency (2010) The National Archives (2009) UK Border Agency (2009) UK Debt Management Office (2005) UK Hydrographic Office (2007) Valuation Office (2009) Veterinary Medicines Directorate (1995)	Asset Protection Agency (2009) Department for Work and Pensions (2008) (encompassing Jobcentre Plus and Pension, Disability and Carers Service) Highways Agency (2009) HM Courts Service (2008) Planning Inspectorate (1998) Rural Payments Agency (2005) Service Personnel and Veterans Agency (2007) Treasury Solicitor’s Department (2008)	Central Office of Information (1998) CEFAS (2008) Companies House (2009) Criminal Records Bureau (2003) FCO Services (2008) Forest Enterprise England (2003) Land Registry (2008) Met Office (2007) Ministry of Defence Police and Guarding Agency (2006) National Savings and Investments (2009) People, Pay and Pensions Agency (2008) Queen Elizabeth II Conference Centre (2003) The Royal Parks (1993) Tribunals Service (n.d.) Veterinary Laboratories Agency (1995) Wilton Park (2009)

In-depth textual analyses were performed, leading to the formulation of initial categories of agency policy responsibilities. These were then refined through repeat readings. Throughout the process, consistency in applying the high-level criteria was paramount. Nevertheless, the contestable nature of language interpretation, combined with the evolving criteria, meant that some documents occupied different positions before the final classification was reached. Table 6 thus represents but one possible taxonomy, reflecting as much the author’s subjective judgement as the ‘facts’ presented in the official literature.

The taxonomy posits three hierarchically ordered groups. The first contains framework documents reporting a significant, regular policymaking role for the agency. These are further subdivided between agencies leading in policy development, and agencies sharing responsibilities with the sponsor. In the former category is the Identity and Passport Service, whose ‘role extends beyond those normally associated with an executive delivery agency’ (Home Office, 2009: 6). It is ‘the primary source of advice to the Home Secretary on policy issues relating to the National Identity Service’, with the chief executive ‘representing the Home Office on safeguarding identity policy’. The second subset is illustrated by the National Offender Management Service (NOMS). Here, the sponsor ensures ‘the NOMS Agency is fully participative and influential in the process for setting national priorities and strategic policies under which it must operate’ (Ministry of Justice, 2008: 15). The agency takes the lead in certain policy areas, thus suggesting, overall, a sharing of policy formulation duties.

The second major category includes agencies whose policy participation is periodic, occurring more explicitly at the discretion of departments. Agencies may be consulted on policy matters, or assist departments in formulating their advice for ministers. HM Courts Service (2008: 21), for example, is consulted by the Ministry of Justice ‘on all policy and legislative proposals which it is developing that may have an operational impact on the courts’.

The final category lists framework documents which contain no details of a devolved policy role. This is not to say that these agencies do not, in practice, contribute substantially to policymaking. However, for the purposes of exploring the ‘official’ image of department–agency relations, these bodies have no formal policy responsibilities.

Reviewing the functional dimension

Some major departures from the Next Steps model are essayed in Table 6. In particular, documents listed in the first two subcategories bear little resemblance to the official model of disaggregated policy and implementation. As for whether this represents reaggregation along the functional dimension, in the absence of comprehensive longitudinal data and, moreover, given the questions over the extent to which Next Steps ‘philosophy’ was actually translated into practice, firm conclusions are problematic. Nevertheless, in the context of Labour’s ‘joined-up’ agenda, developments like that in the Department of Transport (described above), and other case studies, suggest that functional reaggregation did indeed occur in some areas. In 2009, for example, policy responsibilities transferred from a departmental directorate to the National Measurement Office (2010: 2), so that the agency ‘became responsible for the whole of the UK’s scientific and legal national measurement system’. Similarly, when the Skills Funding Agency was established in 2010, it was to be at ‘shorter’ arm’s-length to ministers, so that it be ‘actively involved’ in policy development (Department for Business, Innovation and Skills, 2010: 9).

The frameworks published by the new Coalition Government also reveal something of the ‘functionally-reaggregated’ state which they inherited in 2010. Both coalition parties oppose policy activities being carried out outside of departments (Gash et al., 2010: 29), and, prior to the 2010 election, David Cameron (Cameron, 2009) argued that quangos – loosely defined to include executive agencies – should be ‘strictly administrative’. Now in government, the implications of this are gradually emerging. The new NOMS framework, for example, essays a retrenchment of agency policy influence, with the organisation now only being consulted ‘on the operational impact of strategic policy changes’ (Ministry of Justice, 2011: 6), rather than being a co-author of such. Similarly, in the Home Office, policy capacity is to be taken back from the UK Border Agency (Jenkins and Gold, 2011). While retaining the methodological qualifications cited above, therefore, the emergent narrative would suggest that a degree of functional reaggregation was sought and achieved under New Labour, though not primarily through de-agencification. Rather, some agencies were vested with considerable policymaking responsibilities – something which the Coalition Government now appears to be attempting to reverse.

Conclusions

Up to the early years of the New Labour Government, the UK’s agency story is a familiar one. It has been widely retold as the embodiment of NPM-inspired reform. Latterly, despite limited empirical testing, the ‘disaggregation–reaggregation’ thesis has gained acceptance as a narrative of the longer term trend in central government administration. By developing and operationalising an analytic framework built from the original Next Steps discourse and wider NPM literature, this article has found considerable evidence to support this thesis, although not entirely in the terms in which it has often been cited. Specifically, the concept of ‘disaggregation’ has been problematised, with the chief argument being that it should not be treated as a synonym of ‘de-agencification’, or else confined solely to structural elements. In making this case for greater conceptual clarity, the evaluation of the structural and functional aspects of ‘reaggregation’ has moved beyond simple, unidirectional classifications of ‘expansion’ and ‘decline’ to explore the multidimensionality of recent developments.

The UK agency landscape has indeed evolved considerably from the immediate ‘post-Next Steps’ position. De-agencification has played a relatively minor role in this, although the analysis revealed some differentiation across the devolved administrations. Moreover, accompanying the dominant trend towards reaggregation, the last decade has also witnessed further structural disaggregation in some policy areas, thus partially qualifying the dominant narrative. Figures suggest that by 2009–10, direct employment in agencies was actually greater than in 1997. The fact that the agency cohort contracted considerably over this time only serves to underline the multidimensional nature of agency evolution, the importance of conceptual clarity when describing this, and the pressing need for commentators to explore how the executive agency model is itself evolving. For scholars and policymakers alike, the account presented above poses some key challenges going forward, three of which are outlined below.

First, there is the perennial issue of definition. In seeking a transnational formulation of the agency idea, Schick (2002: 35) suggested that ‘the only common element is that agencies are not departments, that is, they are not conglomerations of multiple activities’. The post-New Labour situation in the UK poses a significant challenge to this characterisation, since, through agency-level mergers and, in some cases, the devolution of policy capacity to agencies, the ‘role purity’ associated with high managerialism has been considerably eroded. The theoretical and practical implications of this require further investigation, including on the benefits and costs of expanding the delivery remit of agencies, and ‘outsourcing’ policy advice to them.

Second, the limitations of research based on ‘official’ accounts need to be recognised. Given the developments reported above, it is necessary to ask how department–agency dependencies and relationships are evolving. Gains (2003: 14) has already suggested that, under New Labour, agencies were ‘reined back into departments’. This shortening of the arm’s-length relationship, and the commensurate loss of autonomy, represents a facet of the structural dimension which the analysis above only touches upon. Hence, there is a need for fieldwork to explore beneath official accounts in order to understand contemporary agency practice.

Finally, the paradigmatic implications of the continued use of agency-type structures requires reconsideration. Some quarters now assert that the NPM paradigm is ‘dead’, evidenced in part by the popular expansion–decline narrative for UK agencification (Dunleavy et al., 2006). The situation outlined above, however, reveals a less clear-cut scenario. Although structurally and functionally modified, agencies live on in central government as key infrastructure from the NPM era. This suggests, perhaps, that a ‘post-NPM’ narrative – which purports the adjustment rather than replacement of NPM (Christensen and Lægreid, 2006b: 361) – is more empirically sustainable, at least for central government administration. This remains, however, a preliminary conclusion, requiring further empirical and conceptual work if it is to gain authority.

In terms of current policy, despite the Coalition Government’s commitment to the agency model, recent events suggest that, going forward, developments will retain the complex, multidimensional character observed under New Labour. For instance as well as the promised further wave of agencification, several existing agencies have been merged since the Coalition took office. Moreover, the removal of agency status from the social security bodies in October 2011 (DWP, 2011) constitutes a major retrenchment, and thus sits uncomfortably with the assertion that agencies should be the ‘default’ mode of service delivery. At present, therefore, there is little to suggest that the Coalition will oversee a significant increase in the agency population. Nonetheless, given the expansion of agencies into the education sector, the apparent re-centralising of policy capacity, and the potential impact of the Public Bodies Review, it seems appropriate to predict an era of further continuity and change for agencies in the UK.

Footnotes

Acknowledgements

My thanks go to Stephen Cope, Bruce Stafford and the two anonymous referees for commenting on an earlier draft of this article. I am also grateful for the feedback offered by members of the Governance of Public Sector Organisations study group of the European Group for Public Administration (EGPA), to whom this research was presented in September 2011 at the 33^rd Annual Conference in Bucharest, Romania.

Funding

A studentship grant from the Faculty of Social Science at the University of Nottingham funded this research.

Note

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Developments in UK executive agencies: Re-examining the ‘disaggregation–reaggregation’ thesis

Abstract

Keywords

Introduction

Executive agencies

The ‘disaggregation–reaggregation’ thesis

Investigating patterns of disaggregation

The structural dimension

The functional dimension

Structural disaggregation and reaggregation

Overview

Agency launches

Agency closures

Scotland

Wales

Northern Ireland

UK central government

Reviewing the structural dimension

Functional disaggregation and reaggregation

Reviewing the functional dimension

Conclusions

Footnotes

Acknowledgements

Funding

Note

References