The Institute for Government was sceptical, to say the least, in its initial response to Pat McFadden’s bonfire of the quangos. As it stated, ‘the number of bodies is the wrong measure of success’, given that it is ‘an easy metric on which the media can focus’, but which can ‘create an illusion that major savings are being made when they aren’t’. The organisation added, ‘in previous purges, the government has not been good at eliminating functions’.
At least on that analysis, they’re bang on the money. There can be merit in merging bodies, even if it means no reduction in functions – at the very least, it can reduce some administrative costs, or streamline the relations between regulators and regulated. But more often than not it’s a PR exercise, rather than a big win for British taxpayers or British governance.
But if the IfG is doubting whether or not we desperately need a bonfire of the quangos, it is sorely mistaken. Two stories from this week clearly demonstrate this.
First is new research from the TaxPayers’ Alliance, which reveals the extent to which the quangocracy has spun out of control. While the number of arms-length bodies has fallen precipitously, from 561 in 2012-13 to 304 in 2022-23, spending and staffing numbers have shot up dramatically.
This is exactly the point the IfG made. What looked like a bonfire of the quangos was really a great welding. We ended up with bigger bodies with more staff and funding that further diminished ministerial power. Spending by quangos in 2012-13 was a still chunky £100 billion, yet within just five years this soared to £272 billion, ending up at £344 billion in the latest year, 2022-23. Staffing increased from 239,000 to 391,000.
What’s really revealing though is how much quangos are now spending as a percentage of total public sector spending. Essentially, how their proportional spend has changed, not just their nominal. In 2012-13, around the time the bonfire began, quangos made up 13.2% of public sector spending, or total managed expenditure. Or one in £6 spent, roughly. Even in the more intense period of the bonfire, when the flames were burning brightest, this jumped up as high as 31.9%, even as the number of bodies was slashed by over 260. This settled at 29.6% in 2022-23.
Now the IfG warns that a bonfire of the quangos risks dragging ministers ‘deeper into operational details’. That’s certainly a risk – ministers should be providing direction, rather than getting intimately involved in delivery. That’s not the problem with quangos though.
The problem with quangos is that ministers often don’t set the direction at all. They may appoint a chair, or chief executive. And they may technically be involved in building overall strategy. But in reality, we are talking about independent bodies with their own institutional interests, budgets and priorities. Often quangos don’t seem to care if they conflict with those of the elected politicians in question. Yet the ability of ministers to take control and change course is dramatically circumscribed. Which is how you end up with the crisis around the Sentencing Council’s pre-sentencing guidelines, or the controversies around the College of Policing’s guidance on non-crime hate incidents. Politicians will frequently fall asleep at the wheel, evidence of that is everywhere. What is important is that when they wake up with a start, the brakes and the steering wheel actually work.
A clear example of this is UK Research and Innovation, the UK’s largest single public funder of scientific and technological research and innovation. A National Audit Office report out today was scathing of both ministers and the body itself, although the language used was predictably restrained. As the NAO highlights, ‘there is a lack of coordination in how government expects UKRI to support the delivery of a range of objectives… which means the overall picture of what government is asking UKRI to do is unclear.’
This is a problem, to say the least. UKRI is responsible for £9bn worth of government spending. Much of the work it funds is worthwhile. But it has also been responsible for some of the most egregious examples of waste recorded in recent years. There is the infamous project looking at the ‘Europe that gay porn built’, which received £800,000. Or the £200,000 for studying the ‘ontology and ownership of internet dance’.
Now, unpicking the causation is tough. Is it the case that in the absence of ministerial direction the pen pushers within UKRI have been happy to divert cash to their own pet projects and ideological obsessions? Or is this a runaway quango which was heading off the reservation regardless of what government was asking it to do?
This touches on a much broader issue with quangos. Is the problem that, once created, they become untameable beasts wreaking havoc on our body politic? Or are they an excuse for ministers to delegate powers and responsibility, with their successors ultimately paying the price when things go wrong? For all the recent criticism of the Office for Budget Responsibility and the way it calculates the cost of migration, it’s worth remembering that the OBR requires Treasury approval before it can start assessing the additional costs imposed by migration on things like public infrastructure and services.
Whichever view you take, though, the problem remains. If we want to align power with democratic accountability, the quangocracy needs to be taken down by more than a few pegs. Only we don’t need a bonfire of the quangos, we need to defang them.
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