14 Oct 2010

‘Bonfire of the quangos’ revealed

Almost 200 quangos are to be axed under a radical series of reforms – but our Political Editor Gary Gibbon says that – despite the rhetoric – only about one-in-five will be abolished.

The Cabinet Office Minister, Francis Maude, has revealed the Government will scrap 192 quangos – or quasi-autonomous non-governmental organisations – under a major overhaul of the way the bodies operate.

As outlined in the list of reforms, some quangos will be entirely abolished, while others will have their functions and power transferred to Government departments.

Duplication of effort
Mr Maude told the House of Commons the reforms will slash “wasteful and complicating duplication of effort”.

“Quangos will be subject to a rigorous triennial review. They’ll be expected to become more open, more accountable and more efficient.”

Among the bodies to be axed are the Child Maintenance and Enforcement Commission, the Renewable Fuels Agency and the Appointments Commission, which will all have their functions taken on by Government departments.

“We know that for a long time there has been a huge hunger for change.” Cabinet Office Minister Francis Maude

A further 118 quangos are to be merged into 57 bodies, with another 171 to be targetted for substantial reform.

Organisations such as the Design Council and the National Endowment for Science, Technology and Arts will be turned into charities, while the work of the Regional Development Agencies will be turned over to local government.

Bonfires tend to burn up everything - leaving only ashes behind, writes Gary Gibbon.

But the government's doing away with just 21% of the quangos. And if you listen to Taxpayers' Alliance - who add in the quangos for the devolved parts of the UK and the local and NHS bodies - you come up with 1148 quasi-autonomous public bodies and a fraction of 17% abolished.

Labour MP Tristram Hunt just called this bonfire of the quangos more a "clammy Sunday afternoon barbeque." Francis Maude said he didn't know whether it was a bonfire or a barbeque.

Our Political Editor's blog is here.

Mr Maude did not outline how much the government will save or how many jobs will go under the reforms.

He told the Commons: “There will be savings as a result of this process and there need to be.

“I’m sorry to say that jobs will be lost from this. but to clear up the mess the last government made, it is inevitable.

“This is not principally about saving money, but about improving accountability.”

‘Change of rhetoric’
A senior fellow at the Institute of Government, Sir Ian Magee, wrote a report on quangos in July. He told Channel 4 News that the government’s reforms are not likely to save huge amounts of money.

“Our studies found that of all quangos, 15 of them spend 80% of the money. So unless you cut the function altogether, you’re not going to be saving a great deal of money.

“That doesn’t mean there isn’t scope for efficiency, but short of duplication, you’ve still got a function that needs to be performed. This isn’t a numbers game.”

He told Channel 4 News he welcomed the “change in rhetoric” towards accountability and transparency but said there are still several unanswered questions.

“We need to ask what is the cost of merging quangos? What are the costs associated with abolishing others altogether?

“Those costs are not a reason for not doing it , but tnere needs to be some sort of way to justify why you’re doing it.

Sir Ian called for another test to be imposed before a quango can be set up.

“The government has three tests for quangos – transparency, expertise and independence. But in addition to that, you need a fourth test of value for money. There needs to be a reason for justifying it in a business sense.

“There needs to be a greater layer of scrutiny within government departments. Independent department selection commitees will need to play an important role in this.”

Competition authority
The Office of Fair Trading and the Competition Commission will be merged into a single competition and market authority.

The Environment Agency and the Homes and Communities Agency will undergo substantial reform to “streamline their work”.

Unions have protested against the reforms, which they say could see thousands of public sector workers lose their jobs.

New legislation, including the Public Bodies Bill, will also be introduced to make it easier for the government to get rid of quangos or change the way the groups function.

“Those that remain will not be allowed to go back to the old way of working. As part of the reforms, we will also be introducing new transparency requirements, a new governance framework and a new review process to ensure that there is a robust and regular challenge of the continuing need for all the public bodies that remain,” Mr Maude said.

Mr Maude says the move “heralds a new wave of accountability” and will make public bodies more transparent by giving the government more control over how quangos operate.

“We know that for a long time there has been a huge hunger for change,” Mr Maude said.

“People have been fed-up with the old way of doing business, where the ministers they voted for could often avoid taking responsibility for difficult and tough decisions by creating or hiding behind one of these quangos.

“Today’s announcement means that many important and essential functions will be brought back into departments, meaning the line of accountability will run right up to the very top, where it always should have been.”

Quangos are fully or partly funded by taxpayers but the Government does not have direct control over them.

“In many cases, today’s proposals will ensure we preserve the quality of vital services, while allowing them to become more efficient and, where appropriate, giving more power to the front line professionals who know those services best,” Mr Maude said.

Before the election, David Cameron promised a “bonfire of the quangos” and said he said he wanted to see a shift in power “from bureaucracy to democracy”.