More than 100 quangos have been abolished since the coalition government came to power, putting Whitehall on course to cut £2.6bn by 2015, the Cabinet Office has announced.
Some £1.4bn has already been cut under the Public Bodies Reform Programme, as 106 quangos have been closed and their functions transferred back into central government. An additional 150 public bodies have been merged into fewer than 70.Among those abolished are the nine regional development agencies across England and the Infrastructure Planning Commission. The government has also turned some, such as British Waterways, into registered charities. Others still to be axed include local government watchdog the Audit Commission.
Cabinet Office minister Francis Maude said the figures showed the ‘rapid progress’ being made in reforming government since thePublic Bodies Act 2011 gave departments powers to cull quangos.
‘In 2010, we inherited a bloated quangocracy that had spiralled out of control. Not only were these unaccountable bodies costing the taxpayer billions, but they were duplicating bureaucracy,’ he said.
‘We are more transparent about quangos and who works for them than any government before. And our civil service reform programme is ensuring that remaining quangos are more efficient and effective. But let’s be clear, when it comes to shrinking and streamlining the quango state, there’s plenty more to come.’
However, the Institute for Government queried whether the abolition of the bodies would save the money that Maude expected.
Programme director Tom Gash said the savings were being made ‘through a slash and burn exercise’.
He highlighted that the National Audit Office had raised concerns that the government had underestimated the costs of scrapping quangos.
‘The government does not have a robust way of measuring and tracking savings and there appears to have been no attempt to assess whether these savings have had an impact on performance,’ he said.
‘If the figures do stand up to scrutiny and there has been no decrease in government performance in services, this is a good thing – but the reliability of the savings claimed is questionable. Slash and burn exercises have proved counter-productive in the past and can even incur more costs in the long run.’
He added that the government’s announcement ‘wrongly implied’ that quangos were ‘universally problematic’, a stance that did nothing to improve public confidence in public services.
‘This is not the case – as the government clearly recognises in its trumpeting of the achievements of two quangos [the Olympic Delivery Authority and London Organising Committee of the Olympic and Paralympic Games] in ensuring a successful Olympic Games,’ said Gash.
David Taylor, public sector director at business advisory firm Deloitte, also warned that ‘delivering ongoing savings as a result is far more difficult’ than one-off cost reductions.
He added: ‘Many quangos deliver services that cannot be stopped overnight. Careful planning is needed to ensure that the appropriate activities can be picked up and delivered more efficiently elsewhere and costs are not just transferred back into central departments. While this would increase accountability, it may not achieve the level of financial savings anticipated.’
Trade union Prospect said that the programme was ‘a false economy’ that was ‘close to a national scandal’.
Deputy general secretary Dai Hudd said: ‘The price of delivering these changes, including redundancy costs, will be up to £900m by the government’s own admission, without counting the cost of the work being done elsewhere, either by central government or replacement organisations.’
