The claim

“By 2015 the Government will save the taxpayer a total of more than £2.6 billion – that’s more than £150 per working household.”
Francis Maude, 22 August 2012

The background

David Cameron wasn’t the first Prime Minister to promise a “bonfire of the quangos”.

Margaret Thatcher, Gordon Brown and Tony Blair all agreed that that the state had devolved too much power to unelected non-governmental bodies. At least, that was the rhetoric, while those leaders were in opposition, or in the honeymoon period shortly after taking office.

Once in power, successive governments have found that it’s not that easy to take a scalpel to the complex web of advisory committees, development agencies and research councils which supposedly clog the arteries of public life.

Will it be any different for the Coalition?

The analysis

There’s no standard definition, but it’s generally agreed that a quango is a body set up by the government and funded by the taxpayer, but allowed to operate outside the direct control of ministers.

All three main parties have tended to agree over the years that there are too many quangos, officially known as Non-Departmental Public Bodies, and we should reduce our dependence on them to improve accountability and value for money.

Shortly before the last election, Labour drew up a list of 752 quangos and said 123 had to go. The coalition went further, with Francis Maude’s Cabinet Office looking at 901 organisations and aiming to axe 204 by 2015.

The Cabinet Office revealed this week that it had already scrapped 106 quangos and merged 150 others into fewer than 70. But that headline-grabbing fall in numbers masks a much smaller reduction in workforce.

The Cabinet Office says quangos employed about 110,000 people 2009 and that number will fall by just 16 per cent by 2015.

That fact led to some press criticism this week, but the department told us that focussing on headcount is missing the point. A spokesman told us the government is not trying to say that all quangos are useless.

Much of the work they do is important, but would be done more efficiently and with greater accountability if quangos were merged into government departments or turned into charities or businesses. Or that is the argument.

The supposed saving for the taxpayer from all this will reach £2.6bn by 2015, the department says, sticking with a figure that was criticised in no uncertain terms by the cross-party public accounts committee last year.

MPs said they had “substantial concerns about the robustness” of that number and said it was “based on incomplete and imprecise estimates”. The public administration commitee was even blunter, saying the whole quango cull had been “botched” and concluding: “The current approach is not going to deliver significant cost savings or result in greater accountability.”

The Cabinet Office insists the savings projections is robust, saying it takes into account the cost of axeing existing bodies (put at £600m to £900) and the extra spend on new quangos created by the coalition since May 2010.

The Cabinet Office initially admitted to the creation of nine quangos since the last election, the most important of which is the Office for Budget Responsibility, set up by George Osborne to provide independent oversight of the Treasury’s fiscal forecasts.

But Labour says the government has created 150 new quangos, most of them new bodies that have sprung up to deliver Andrew Lansley’s controversial programme of reforms to the NHS.

This figure is highly debatable, and hinges on whether you think the new Clinical Commissioning Groups (CCGs) – which will replace Primary Care Trusts from next year – count as quangos or not.

A Department of Health spokesman told us: “These are local NHS organisations, which have never been considered arm’s-length bodies – just as hospital trusts and PCTs do not count as quangos.”

True, but the new commissioning groups will no longer be directly accountable to the Department of Health, but to the independent NHS Commissioning Board – a quango. So you could say they have been quango-ised.

On the other hand, elected local councillors will have some input via Health and Wellbeing Boards, so you could argue that there will be more local accountability than would be expected from a traditional quango.

A DoH spokesman insisted: “We are reducing the number of quangos, not increasing them. Our reforms have cut back two layers of administration in the NHS, helping to reduce the number of the Department’s public bodies by over half.

“This will save taxpayers £5.5bn in this Parliament. Our reforms mean that doctors and nurses, not managers, will be in charge of the NHS through Clinical Commissioning Groups.”

We think the government is on a stickier wicket when it comes to other health quangoes that have either been created or had their roles expanded thanks to the NHS reorganisation.

After initially suggesting that these bodies were not really quangos, the Cabinet Office eventually conceded that they clearly are – and potentially expensive ones.

The NHS Commissioning Board will cost around £400m in management costs. Existing health quangos Monitor and the Care Quality Commission, expanded under the Lansley reforms, have seen staff costs rise by £28m in the last year alone.

The Cabinet Office told us they had taken staffing projections for NHS organisations into account when coming up with that figure of a 16 per cent reduction in workforce, but they admitted they had negelected to include the increased cost of NHS quangos in their £2.6bn savings figure.

The verdict

If, by its own admission, the Cabinet Office hasn’t included every increased spend on quangos in its calculations, that must cast serious doubt on the £2.6bn claim.

But the department says it stands by its projection of significant spending cuts from the “bonfire of the quangos”.

And the government insists its health reforms will lead to savings of £5.5bn in the life of this parliament. But that’s a whole other FactCheck.

By Patrick Worrall