Is it time to resist the rise of arms-length bodies?

The arbiter of this is the Office Budget Responsibility.

George Osborne set up the OBR as an arm’s length body (ALB)  to “change the way that budgets are made forever”.

It was his equivalent of Gordon Brown giving independence to the Bank of England. The OBR now produces the economic forecasts which the Government is obliged to publish every six months free from the optimism bias which had plagued them in the past.  It was perhaps rash of Rachel Reeves to say that there would only be one set of economic policy measures per year and to keep an assessment of how she was performing against her fiscal rules every six months.

The OBR started with a very cautious interpretation of the effects of Government policies. They were reluctant to get into the tricky business of assessing behavioural responses to new initiatives. Jeremy Hunt thought they were under-estimating for example the effects on labour supply of his measures to extend access to free childcare. And if you assess, as the OBR does, that the economy is operating close to capacity it is hard for any measures to do much to increase growth in the short to medium term.

There is the story of a senior figure at the OBR briefing Boris Johnson on their assessment showing the damage to economic growth from Brexit. Boris dismissed it saying it did not allow for British gumption. The rigorous OBR response is yes there may be British gumption but the minister has to show there is extra British gumption as a result of a change in policy.

Actually the OBR have if anything been over-optimistic on their assessment of British productivity and balance that with intense caution on the effect of new policies on growth.

The test now for a policy to save public spending is if it will show up in the OBR figures. This is influencing the policy debate on welfare reform and favouring short term measures to cut benefits and reduce some entitlements. That is not the same as the long-term effects of changing to shift behaviour and get more people off benefits and into work.

The independent role of the OBR is important but there are some odd consequences.

When the IMF or the OECD or indeed a commercial investor asks most Governments for their account of their economic policies they offer their own account. The UK is unusual in only having an arms-length forecast and no Treasury assessment in its own right. The OBR cannot and should not be by bypassed – look at the problems Liz Truss and Kwasi Kwarteng created for themselves. But it can be a frustrating environment for ministers.

They should be able to set out their own view and why it differs from the OBR.

Meanwhile there have been a string of departures from NHS England.

It looks as if Wes Streeting is increasingly frustrated with its role in running the NHS at arm’s length from ministers.

The Lansley reforms to the NHS leading to the creation of NHS England were not some eccentric personal project. They rested on a view developed by the Conservatives in Opposition that the only way to restore trust in politics was to take politicians out of decisions and hand them over to ALBs to do things independent of political pressures. How would politicians ever agree that a hospital should close? But it leaves ministers with a very limited role in a great public service of enormous political significance

The OBR and NHS England are examples of a doctrine which has gradually captured both main parties.

Pat McFadden has now announced that he wants to reverse the growth of the number of officials.

But the growth of ALBs is one of the forces behind it. Departments have not shrunk as power has gone to them. Instead there is one group of officials working in the ALB and another group in the Whitehall Department assessing how they are doing. Ministers frustrated at the loss of their power try to recapture it by more and more interventions, requests for information, and guidance letters to the officials running the ALB.

Behind all these disparate events therefore is a doctrine pushed first by Labour and then by Conservatives after 2010.

We may now be seeing evidence that it has led to frustrated ministers, more public officials and populist anger at politicians’ failure to deliver.

We do of course need external scrutiny of how Governments are doing but the moment may have come to consider a re-set.