Quangos: back in the firing line

There may not be the predicted 'bonfire of the quangos', but they are in for a bumpy ride and a overhaul, which ever party wins the next election. Those that do survive may find themselves merged with others or brought back under central control
Is Gordon Brown washing his hands of quangos? Photograph: PA

As politicians fine tune plans for public spending cuts in the run up to the general election, quango leaders could be forgiven for feeling that they have a big target sign on their backs.

Quasi-autonomous non-governmental organisations, which deliver services ranging from nuclear commissioning and teacher training to arts grants and national savings, have long been accused of creating unnecessary bureaucracy and being unaccountable.

Now they are under the spotlight again, as political parties hunt for areas to save money.

Both Labour and the Conservative parties have announced plans to cut the UK's 750-or-so quangos, which spent £46.5bn in 2008/9. In December, prime minister Gordon Brown announced plans to abolish or merge more than 120 quangos.

Speaking last week at a conference on the future of quangos (Public Bodies 2010), Francis Maude, shadow minister for the Cabinet Office, told public sector managers that a Tory government would want to come to "fairly rapid conclusions" about the future of quangos.

Tory review

A Tory review would decide which quangos should be scrapped and which could be bought back within government departments, in order to make them directly accountable to ministers, Maude said.

The Conservative party has said it will decide the fate of quangos based on a three-point criteria, including whether the quango is politically impartial and whether it is "transparent", allowing important facts, such as national statistics, to be presented clearly.

At the same conference, the Institute for Government, an independent charity aimed helping improve government effectiveness, revealed some provisional early findings from its research into quangos.

One of the biggest challenges facing quango managers is a lack of clarity over quango roles and responsibilities, and their relationship with government department "sponsors" who fund them, said Tom Gash, a fellow at the Institute.

"In many cases government departments treat Arms Length Bodies (ALBs) rather differently," he said. "We found entire policy functions duplicated across ALBs and government departments."

The Institute revealed a series of draft recommendations including: "light touch" reviews of quangos every two to five years; having a "sunset" clause for some quangos, requiring their functions to be renewed; and requiring politicians to prepare a business case when planning a new quango and present it to Parliament.

How can quango leaders help safeguard the future of their organisation (and keep their own job)?

Flexible and positive

Matthew Flinders, a politics professor at the University of Sheffield and an expert on public sector reform, advised quango heads to justify what they do on a single piece of paper, focusing on where their service gives "added value. Quango leaders should be "flexible and positive", he said, presenting minister and civil servants with different possible options for reform.

Flinders was relatively upbeat about quangos' prospects. He said that moves towards a "smarter state" will probably mean some quangos will merge and become more streamlined, but Flinders predicted that there would not be a "bonfire of quangos".

Whatever the scale of reform, it is important to learn from previous quango culls, according to Lord Warner, a former health minister from 2003 to 2006 who oversaw a review of health "Arms Length Bodies" (ALBs), which helped reduce the number of health ALBs from 38 in 2004 to 20 in 2009.

Managers overseeing a quango overhaul need their political bosses to go public about the plans in order to reduce the "risk of departmental backsliding and Sir Humphrey manoeuvring," Warner told delegates.

In addition, the reasons for cutting quangos, and the benefits to the public, need to be explained in order to avoid looking like an "unguided axman" Warner said.

Quango managers are in for a bumpy ride, whatever the result of the next election. Quangos are a tempting target for cuts, and there is confusion over their exact number, powers and relationship to government departments.

One delegate at the 2010 conference asked Maude what life will be like for quango managers under a Conservative government. "Pretty fraught," quipped Maude to slightly nervous laughter from the audience.

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