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Ministers are drawing up plans to set up two new quangos in the areas of AI security and health data, even as the Cabinet Office cracks down on arm’s length bodies across Whitehall.
The department for science, innovation and technology has released a business contract outlining proposals for its recently renamed AI Security Institute, including seeking support “to establish the department as an arm’s-length body for government”.
Quangos — or quasi-autonomous non-governmental organisations — are arm’s-length bodies that are funded by government departments, but not run by them.
Separately, prime minister Sir Keir Starmer announced on Monday that his government would set up a new central research service for health data storage.
Government officials stressed that no decision had been made about whether and where the research service would sit within the Department of Health and Social Care.
However, people briefed on the initiative told the Financial Times that the preferred option was to structure the service as a government-owned company, a type of arm’s-length body.
Cabinet Office minister Pat McFadden wrote to Whitehall departments last week demanding they justify the existence of every quango, making clear that decisions should be brought back under ministerial control where possible.
Other government-owned companies include the British Business Bank, a state-owned economic development bank, and Genomics England, which does research and development in genomic healthcare.
Reports of the moves comes three weeks after the government announced it was abolishing NHS England, often referred to as the world’s largest quango.
Ministers argued there was unnecessary duplication between the body and the Department of Health and that there needed to be more direct ministerial oversight of health policy.
The decision to push ahead with the creation of new quangos contrasts with the Cabinet Office widely-publicised crackdown on arm’s-length bodies, with the closures of several agencies expected in the coming months.
Alex Burghart, shadow Cabinet Office minister, said: “It’s all very well for the government to say they’re going to review the existence of quangos — but they’ve created around 30 since the election.”
“They are not serious about change. Labour says one thing and does another,” he added.
Cabinet Office guidance stressed that merely providing advice or engagement with stakeholders was not a justification for keeping a unit as an arm’s-length body.
Only in cases where quangos performed a regulatory or advisory function that required genuine independence from ministers, or to support the rule of law, should they remain an ALB, the guidelines suggested.
Government officials said that the proposals for new arm’s length bodies, including the AISI, would be scrutinised as part of the cabinet review into superfluous quangos.
Beth Thompson, executive director of policy and partnerships at the Wellcome Trust, one of the partners involved in setting up the data service, said that “one of the main models on the table is a government-owned company”. But, she added, a final decision had not been taken about the organisational structure.
“We’ve seen really successful government companies like Genomics England where the standalone structure gives you the freedom to be able to do a great job,” she said.
Thompson added that developers of the research service were planning to create a tiered pricing model for access to the data, with commercial users charged the most, and academic and public researchers the least.
This would ensure a “sustainable business model”, she said, adding that the pricing structures were still being hashed out.
She added that teams were working out “how commercial entities could pay an appropriate price for the data so that excess money is fed back into the NHS and back into the health system”.
Government officials first set out plans to turn the AISI into an arm’s-length body last summer, as part of efforts to give the organisation institutional independence and to reassure companies that it did not have the government “breathing down its neck”.
The AISI body is expected to oversee the implementation of legislation requiring the most advanced AI model developers have their algorithms tested.
Ministers currently expect this legislation to feature in the next King’s speech, according to people briefed on their thinking.
Government officials stressed that Whitehall departments and their relevant Cabinet ministers would have the final say on whether to keep, axe or merge ALBs sponsored by their ministry, rather than the Cabinet Office.
A Department of Health and Social Care spokesperson said: “The Health Data Research Service will be a focused, specialised service with a clear purpose: helping researchers use NHS data to accelerate the discovery of life-saving drugs and improve patient care.”
