The arm’s length principle still a live issue

Geraint Talfan Davies sees relevance in an old principle in the both arts and education

The application of the arm’s length principle in the governance of Wales has raised its head again in recent weeks in the fields of both education and the arts, and for the first time since the referendum confirmed that the National Assembly will acquire full law-making powers.

In the arts, the Minister for Heritage, Alun Ffred Jones announced last week that responsibility for the Wales Millennium Centre will transfer from his own department, where it has lain ever since it was a building project, to the Arts Council of Wales “in the spirit of arm’s length management”. While ending the Millennium Centre’s direct access to ministers, this transfer of responsibility will mean that no arts organisation will now be outside the Arts Council’s purview, and the Millennium Centre will be spared endless, time-consuming re-examination by Welsh Government-appointed external consultants.

The decision, along with the Minister’s refusal to intervene in individual decisions by the Arts Council of Wales, is also a sign of increasing ministerial confidence in the Arts Council, following the latter’s difficult but meticulously executed investment review. It will also have the side-benefit of decreasing the Arts Council overhead as a percentage of its total income, though the council has nevertheless been instructed to reduce its own costs by 12 per cent.

The transfer of responsibility for the largest arts building in Wales does, however, raise the whole question of the upkeep of the arts estate across Wales. In recent decades there has been a colossal extension of bricks and mortar assets in the arts – new theatres and galleries in every part of Wales, many of them built with lottery funding. There has rarely, if ever, been enough funding to secure regular maintenance of these assets, almost always a false economy.  In this sense arts buildings may suffer just as much as school buildings, but a shared misery does not diminish the problem.

The arm’s length principle also came to the fore in the debate on the statement by the Minister for Children, Education and Life Long Learning, Leighton Andrews, on two separate reviews of governance in higher and further education.  (I should declare an interest as a member of the McCormick Review into higher education.) This revolved around the future of the Higher Education Funding Council for Wales.

If one may mix one’s metaphors, the arm’s length principle is intended to insert a helpful dog-leg into lines of accountability, so as to preserve autonomy down the line. However, autonomy can never be total if one of the things that passes down that line is public money. Hence the difficulty within higher education of balancing traditional institutional autonomy with accountability for the expenditure of public funds in line with national objectives.

The McCormick Review had to address two relationships: that between the Welsh Government and the Funding Council, and that between the Funding Council and the higher education institutions. It came down clearly in favour of maintaining a reformed funding council – under the new title of Universities Wales – which would be even more strategic in its purpose and remit than the current body.

The new body would be “accountable to the Welsh Government for the overall performance of the sector,” and among its responsibilities would be a requirement “to report regularly and publicly, using key performance indicators agreed with the Minister for Children, Education and Lifelong Learning, on the overall performance of the higher education sector in Wales, over and above the performance of individual institutions, and on any issues that impact on sectoral performance.” It would also have the power to commission independent evaluation of governance, leadership or performance in any institution.

There will be some in the higher education in the sector who will denounce any change in the balance between autonomy and accountability as threatening or Stalinist, but since another proposal is that the institutions should themselves be represented on the new body’s board, they will have a stake in it. Although several speakers in the debate supported the retention of the arm’s length body, the Minister, Leighton Andrews – himself a strong advocate of the arm’s length principle in the field of the arts – did not commit himself, and expressed a worry about an arm’s length body being subject to ‘institutional capture’.

My personal view is that extensive and precise public reporting requirements for the proposed new body should reduce the risk of institutional capture, while the involvement of the institutions themselves on its Board should cut off their avenue of retreat from a responsibility to deliver – an avenue that the sector has fled down too often in the last decade. If the sector is wise, it will embrace these proposals rather than risk the abandonment of an arm’s length body which, post the recent referendum on law-making powers, the Welsh Government will henceforth have the power to achieve.

Geraint Talfan Davies is Chairman of the IWA.

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