The new inquiry by the Nolan Committee, which will also cover training and enterprise councils, was launched this week with the publication of the document Local Public Spending Bodies. Lord Nolan will be accepting evidence, written and oral, up to October 31.
He said: "In recent years these bodies have come to play a significant role in providing services . . . Their board members are neither elected nor appointed by ministers. They spend at least Pounds 11 billion of public money each year and have considerable freedom to set their own priorities."
The committee was set up last October by the Prime Minister after a series of scandals concerning MPs, including two who were prepared to accept Pounds 1,000 to table a parliamentary question.
Lord Nolan said there were concerns that the boards of local public spending bodies could become self-perpetuating and certain cases, which have made the headlines, have shown there is scope for conflict of interests and suggestions of people "feathering their own nests".
He said they will be studying GM schools, colleges and TECs with a view to how accountable they are and how open their decision-making is, and they will examine the leadership role of the boards and executives. The committee will also look at establishing codes of conduct, mechanisms of independent scrutiny and training for those who have volunteered to serve on the boards.
Further and higher education colleges amply demonstrate the blurring of the dividing line between the public and private sector, Lord Nolan's document says. While they are largely financed from the public purse, they are also competitive independent businesses managing budgets of up to Pounds 30 million.
GM schools, operating on a smaller scale, deal with budgets of up to Pounds 5 million and buy their services on the open market. The boards or governing bodies of each are responsible for spending the money and appointing staff.
The 103 TECs and their Scottish equivalents private limited companies involved in training and local enterprise are responsible for Pounds 2 billion of public expenditure.
The TEC national council has pre-empted the Nolan Committee by launching its own accountability charter. This requires TECs to improve consultation with the local community, to register conflicts of interest of directors or employees over contracts and to report the salary of chief executives.