Investment briefing: the bonfire of the quangos
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Associate Editor
David Stevenson Sep 11, 2009
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Despite decades of rhetoric, politicians have been slow to get rid of Britain's unelected and often wasteful bodies. Why? David Stevenson reports.
Why are quangos in the news?
The next British government – whoever leads it – must find ways to reduce public spending to deal with Britain's hefty debts. Conservative leader David Cameron has spelled out some cuts he plans to make. Among his targets are unnecessary 'quangos', or 'quasi-autonomous non-governmental organisations', also known as 'non-departmental public bodies', or NDPBs.
Over time, successive British governments have established a wide range of quangos to take on responsibility for specific areas of public life. Many date back to the 1980s, although the first – Trinity House, the lighthouse service – was established in 1514. Although their employees aren't civil servants, most quangos are directly funded by taxes.
What do they do?
There are several types. Some, such as the regional development agencies or the regulator Ofcom, have executive powers (as in they actually do things). Others give independent advice to ministers, for instance the Boundary Commission, which reviews parliamentary constituencies. And there are watchdogs, which monitor the likes of prisons and immigration removal centres. The Cabinet Office lists 790 NDPBs in the UK, but that doesn't include some devolved Scottish and Welsh quangos. The Taxpayers' Alliance reckons there are in fact 1,162.
How much do they cost?
Precise, neutral figures are nigh on impossible to find. But the Cabinet Office puts their total cost at £34bn a year, while the Taxpayers' Alliance reckons it's closer to £60bn – that's £2,550 per British household.
And "despite government claims that the number of quangos is falling, at least 40 new bodies have been created since Gordon Brown took over as prime minister in June 2007", says The Times, whose latest survey "shows that more than 100 board members or executives were paid at least £100,000 last year, with five earning more than £300,000".
The UK Treasury admits that quangos' spending rises have far outstripped those of Whitehall departments.
Are they worth it?
Far from it. Several quangos are no more than lobbying organisations for regions or industries, while Dan Lewis's Essential Guide to British Quangos estimated in 2005 that there were 529 "useless" quangos that either did very little or duplicated the work of other quangos or existing government departments.
"The government's attitude towards quangos is similar to a medieval doctor's to leeches – whatever the problem, whether it's obesity, teenage pregnancy or regional disparity, it creates a quango, and the problem gets worse," says Ed West in The Daily Telegraph.
"But the main problem with quangos is not that they waste money but that they suppress democracy." For example, in 2007 regional assemblies of local councillors – themselves created despite being rejected by North East voters – stood up to Labour's housebuilding programme. Labour simply abolished the assemblies and handed their power to the regional development authorities, some of the biggest quangos of all.
Why not scrap them?
Politicians have been promising drastic action against quangos since the 1970s. Margaret Thatcher called for a cull; Gordon Brown, when in opposition, promised a "bonfire of quangos"; and Tony Blair vowed to "dismantle the quango state".
But despite the rhetoric, no politician has made a dent in their numbers. On the one hand, dismantling such bodies is always more difficult than setting them up – once in place, they tend to create work for themselves. As The Daily Telegraph's Tom Burkard puts it: "The 11 school quangos in England serve little purpose beyond ensuring their own survival."
But it's also because quangos can be very useful for politicians – they offer an illusion of neutrality and the opportunity to pass the buck when things go wrong. As the BBC's Nick Robinson puts it, "politicians like to set up bodies that give them independent expertise, but sometimes distance them from responsibility". The National Institute of Clinical Excellence, which has to decide which drugs to fund on the NHS, is a classic example.
So what's the answer?
A proper quango bonfire. Cameron has put together a three-part test for quangos to pass or be scrapped, reports Benedict Brogan in The Daily Telegraph: "Does it undertake a precise technical operation? Is it necessary for impartial decisions to be made about the distribution of taxpayers' money? Does it fulfil a need for facts to be transparently determined, independent of political interference?"
The trouble is, we've heard most of this before. But perhaps there's more chance of reform at local level (see below).
Will Yorkshire show the way on quangos?
Tory council leaders are planning a radical overhaul of Yorkshire's £300m-a-year development agency if Cameron wins, says Jonathan Reed in the Yorkshire Post: "Plans to strip Yorkshire Forward [which is tasked with promoting the local economy] of a string of powers for housing, transport and planning, and to slash its budget, have already been discussed in advance of a promised shake-up of quangos." All regional development agencies could soon see "significant and radical change", says Andrew Carter, joint leader of Leeds City Council. "We want a clearout of the quango appointees, and much more representation from democratically elected people".
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