Quangos ‘need to rise from ashes’ to plug Brexit regulation gap

16 May 18

Quangos will need to “rise from the ashes” to replace “whole swathes of EU regulation” following Brexit, the Public Accounts Committee chair has predicted to PF.

Meg Hillier, in an exclusive interview, warned the government must be prepared to bring back quasi-autonomous non-governmental departments and calculate the cost for doing so.

She suggested this would be the only way of plugging the regulation gap left when the UK leaves the European Union next March.

“They may not come back in exactly the same form, but there would need to be bodies to regulate things like food standards,” she told PF.  

The UK will lose regulators such as the European Medicines Agency, which evaluates medicinal product standards, and European Food Safety Authority, which provides independent scientific advice and highlights emerging food chain risks, next year. 

The Conservative/Lib Dem coalition announced the so-called ‘bonfire of the quangos’ after taking power in 2010, saying it would reduce the administrative cost of public bodies by at least £2.6bn by 2015.

Hillier, also Labour MP for Hackney South and Shoreditch, said she could not estimate the cost of bringing back the quangos but believed it would be “significant”.

She urged the government to do the costing for bringing back quangos and was concerned it was not part of the funding settlement – the £35-39bn ‘divorce bill’ – that will be voted on in the autumn this year.

The National Audit Office has recently said this settlement bill could be too low.

“There’s a cost to this political step [Brexit], and there needs to be honesty about it,” she said. “We need numbers that people can trust.”

The PAC has issued a string of reports since the vote to leave the EU in 2016, highlighting the failures of government departments and lack of resources allocated to them to prepare for Brexit.

Hillier told CIPFA’s central government conference in November last year select committees had “really taken up” Brexit and would be holding the government to account.

The PAC chair told PF in her interview that the government must look at the “wider cost of Brexit”, and said it should also be calculating the effect on UK businesses and supply chain costs.

Her group of MPs is working with the Treasury select committee chair and Conservative MP Nicky Morgan and the two will be sending a letter calling for the government to consider these wider costs in the coming weeks.

Stephen Kinnock, Labour MP for Aberavon, has suggested 50 new regulators would have to be created next year after Brexit, by analysing House of Commons statistics.

He also noted figures on establishing new quangos had not been published but warned the cost could be “staggering”.

Quango fact file

Quango is an acronym for quasi-autonomous non-governmental organisation. The bodies are funded by taxpayers but not directly controlled by central government.

In 2010 the coalition government promised ‘a bonfire of the quangos’ in a bid to reduce public bodies’ costs by £2.6bn by 2015.

It announced 192 quangos were to be axed. At the time official estimates suggested there were 742 quangos across the UK.

Although, the Taxpayers’ Alliance in 2010 identified 1,148 quangos, which it said spent £90bn annually.

Quangos accounted for more than 13% of government expenditure, not including NHS spending, an Institute for Government report said in 2010.

The bodies have a range of remits, from delivering public services and providing advice to regulation and inspection.

Quangos that have been abolished include:

  • The Audit Commission - audited and inspected local authorities 
  • National Housing and Planning Advice Unit - provided research and advice about provision of affordable housing
  • Advisory Committee on Organic Standards - oversaw development and implementation of organic standards and assisted DEFRA with its supervision of the licensing system.
  • British Nuclear Fuels - provided products and services to the nuclear industry and governments.

Examples of EU regulators regulating UK industries:

  • European Medicines Agency - evaluates medicinal product standards.
  • European Food Safety Authority - provides independent scientific advice and highlights emerging food chain risks.
  • European Banking Authority - promotes transparency in the European financial system and identifies weaknesses in banks’ capital structures.

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