Regulating the Regulators

Regulating the Regulators

Quangos are increasingly powerful. But the accountability of many is increasingly patchy. The scale of the quango-related work now expected of parliamentary committees, along with other distractions, has left far too many important decisions under-scrutinised and remote from those most affected: the electorate and the consumer. The result is a decline in public trust, and a deterioration in performance of some of the quangos themselves.


In a new report with the Centre for Policy Studies think tank, Andrew Tyrie – the former chairman of the Treasury Select Committee, the Parliamentary Commission on Banking Standards, and the Competition & Markets Authority – argues that scrutiny of the Bank of England is particularly important, given the vast scale of the QE programme and its wider political implications.


Regulating the Regulators’ calls for the establishment of a new specialist body, the Parliamentary Regulatory Oversight Panel (or PROP), which would give Parliament the tools and expertise that its already hard-pressed select committees require for more effective oversight.


The body would be staffed and led by full-time subject matter experts – those who had, or could develop, a deep understanding and experience of regulatory practice and decision-making. It would initially focus on the Bank of England, working under the auspices of the Treasury Select Committee, but could and should be expanded to include other regulators once it proved its worth.


Tyrie argues that this would substantially increase the quality of scrutiny of these vitally important organisations, and at comparatively low cost.


Releasing the report, Lord Tyrie, said:
‘Quangos play a decisive role in a great deal of British public life, but their decisions often go unexamined by Parliament.  The decisions of many are not subject to enough effective and constructive challenge. Some are slipping, in practice, beyond effective accountability.


‘Parliament needs to protect and entrench the operational independence of the most important quangos, such as the Bank of England. It has done better than most. But QE has made it all the more important that Parliament scrutinises it on the basis of high quality advice and support. Just as crucially, it needs to make sure that underperforming quangos are subject to more and more detailed scrutiny on behalf of the public.


‘Parliament can and should take the lead. It can do more to hold quangos to account. But to be effective, it must first be equipped with the tools necessary to do the job.


‘The Government could do more too. Both Government and Parliament have been understandably distracted by other priorities in the five years since the Brexit referendum. Action to investigate, challenge, and overhaul the strategic direction of some of these bodies in now long overdue.’

Andrew Tyrie - Sunday, 24th October, 2021