By David Williams
7 January 2011
MPs have issued a damning verdict on the coalition government’s drive to cut the cost and number of quangos, saying it will neither save money nor improve accountability.
A publicadministration select committee report, Smaller government: shrinking the quango state, published today, found that Conservative pledges to reduce the ‘costly bureaucracy’ of arm’s-length bodies created a false expectation that significant savings could be made.
PASC chair Bernard Jenkin said the plans were also badly executed. ‘The whole process was rushed and poorly handled and should have been thought through a lot more,’ he said.
Jenkin also argued that the cull represented a missed opportunity for the government’s Big Society programme, as ministers could have transferred some quangos’ functions to mutuals or charities.
‘This was a fantastic opportunity… but it has been botched,’ he said.
The report said the extent to which a quango cull would reduce costs ‘was probably exaggerated’. Savings would be made only if ministers decided that public bodies should simply do less.
The MPs criticised the process used to decide which bodies were to be axed, describing the government’s criteria as ‘hopelessly unclear’ and casting doubt on whether they had been applied consistently. They also slated the absence of ‘meaningful consultation’.
On accountability, the report said the government had not made the case that cutting quangos makes decision-making more accountable, and had ‘failed to recognise the realities of the modern world’. The committee concluded that cutting quangos would ‘undermine other channels of accountability’, making it harder for pressure groups and members of the public to have their voices heard.
The move would ‘risk policies fighting numerous other priorities for ministerial attention’, the report concluded. ‘This will mean less effective accountability and challenge on a day-to-day basis.’
Colin Talbot, professor of public policy at Manchester Business School, said the report contained ‘some of the bluntest language [he had] ever seen in a select committee report’.
He backed the report’s calls for a ‘proper process’ for dealing with decisions of this nature. ‘It was clear that the whole thing was incredibly rushed. They couldn’t possibly have done any systematic analysis, looking at 900 bodies, in a few weeks.’
Talbot told Public Finance: ‘This will make things worse. There will almost certainly be areas where they have made mistakes.
‘There will be cases where they should have gone further, and cases where they are closing down things that will cause all sorts of problems. The biggest one is the Audit Commission – that was a very rushed decision and is likely to end up with a very real controversy about how audit is done.’
Chris Banks, chair of the Public Chairs Forum, which represents quango chiefs, commended the report. He told Public Finance it ‘reminded us that these reforms represent change on an unprecedented scale'.
But he said: ‘You can’t put the genie back in the bottle. We now have to manage a very large and complex series of transitions which have a direct impact on public services, and billions of pounds of public money.’ He called for ministers to look at involving mutuals and the voluntary sector more in the work currently done by quangos.
Banks added: ‘Now is the time to wipe the slate clean and establish a new settlement... The arm’s-length bodies that are being retained are being retained for a valid reason, and are performing a useful role. A positive acknowledgement from ministers of their ongoing role could have a positive impact on the whole network of arm’s-length bodies.'
Sir Ian Magee, senior fellow at the Institute for Government, welcomed the report. He said: ‘The IfG’s research was clear that the bonfire of the quangos would not result in savings.’
He added that the government’s reforms were insufficient to simplify the ‘chaotic and complex’ system of arm’s-length bodies. ‘There are still too many categories of ALBs, 11 in total, that do not match form to function, and do not help the public or government understand their roles and differences.’
Cabinet Office minister Francis Maude announced plansto axe 192 non-departmental public bodies in October last year.
