Time to Recharter Executive Agencies

Several government agencies are mightier today than traditional departments like the Treasury. For instance, the EPA is one of the major regulatory bodies and yet it recently admitted it doesn’t care about the effect of its regulations on employment.  These agencies have ceased to serve America and now only serve themselves.

It is time Congress for Congress to rein in these agencies by giving them a detailed charter enumerating their powers.  For example, Congress never created the EPA. It was created by a departmental reorganization by President Nixon. The original idea was that the Council on Environmental Quality should be the oversight body for the nation’s environment, with the EPA acting as an administrative body.  That state of affairs needs to be restored with the CEQ regaining its policy role.  The EPA would need to seek express congressional approval for every expansion of its powers and justify its enforcement actions to an independent body.

In each case, these administrative agencies would be rechartered under a series of principles that Mrs. Thatcher used to reduce the size of the British bureaucracy.  In an initiative called Next Steps, Mrs. Thatcher and her successor John Major transferred the purely administrative functions of government departments to these agencies.  Each was expected to run its affairs as a business rather than a bureaucracy, and in many cases experienced private sector figures, with no loyalty to the bureaucratic way of doing things, were brought in to head them.  Policy functions were left to a much smaller core of, for the most part, very clever people.

A good example was what happened to the UK Department of Transport while I worked there. When I joined, the Department employed 14,000 people. Over just a couple of years, the administrative functions were hived off. The British national version of state DMVs, the Driver and Vehicle Licensing Center, was completely separated from the Department to become the Driver and Vehicle Licensing Agency, which was then able to use its freedom from central control to significantly update its IT resources, which had become something of a joke.  The other main DMV function — driving exams — was split off to become the Driving Standards Agency, while vehicle certification was entrusted to the tiny Vehicle Certification Agency, demonstrating that an effective agency could be run with a staff of around 60.[i] Finally, the work of building and maintaining the nation’s freeways was entrusted to the Highways Agency. That Agency moved its headquarters and staff out of London, significantly reducing costs. By the time I left the Department of Transport, it employed only around 2000 civil servants. With career prospects significantly reduced, many of them, like me, took voluntary severance or early retirement options when they were offered, which means that such reform could be a viable way of shrinking the federal bureaucracy.

It is important to note that these early agencies often proved unresponsive to their customers, as people who used them now came to be known. As a result, Prime Minister John Major introduced the Citizen’s Charter, which sought to make agency and government administration more user-friendly. It required significant cultural changes to the civil service mentality by making administration accountable, ensuring transparency and introducing freedom of information, providing motivational training and incentives for agency personnel and civil servants and measures to save time for the customer (and thereby the agency). Agencies or services that consistently met these high standards were awarded a “Charter Mark” that could be displayed on posters, adverts and other informational material.

These two reforms significantly improved public administration for both the citizen and the government in the UK in the 1990s.  Indeed, they proved so successful that the Clinton-Gore presidency proposed to replicate them, with what were termed Performance Based Organizations.  Among candidates for PBO status were the Patent Office, the Federal Aviation Administration and the U.S. Mint, although the proposal should have gone farther to propose splitting out functions inside monolithic departments. However, bureaucratic resistance was such that only one was ever created — Federal Student Aid — but a quick review of the recent history of student aid and how it has helped create a higher education bubble should suggest how successful this half-hearted attempt to bring accountability and performance standards to government actually was. That is exactly why a whole swathe of these agencies needs to be created at once and a Charter initiative put in place (perhaps overseen by the Office of Information and Regulatory Affairs). Just imagine an EPA that actually cared about the people its decisions affected!

[i] That number has now more than doubled, owing in part to the managerialism of the 1997-2010 Labour government and because the VCA now has responsibility for controlling CO2 emissions from vehicles to “combat global warming.”