Last week’s Budget confirmed that the record levels of levels of state spending are due to rise even further. £1,216bn is being spent this financial year. It is scheduled to increase to £1,226bn in 2024/25. Then to £1,252bn in 2025/26. Then up even higher to £1,290bn in 2026/27. Then to £1,323bn in 2027/28. And finally, to £1,361bn in 2028/29. Those are at current prices, in other words, the proposed increases are in ‘real terms’.
It is predicted that economic growth will increase at a slightly higher rate, so that state spending as a share of GDP will fall slightly from 44.5% this year to 42.5% in 2028/29. But because of the gargantuan appetite of the state, that is pretty feeble. We are caught in a low-growth, high-tax trap.
Given that these are forecasts for several years into the future, we can’t rely on their precision. But as a broad statement of intent it is worth noting. The concern is that most pundits have criticised the Chancellor Jeremy Hunt for not allowing spending to rise enough. The Office for Budget Responsibility, without intentional irony, declared that his spending plans amounted to ‘implausible austerity’. Others queued up to claim that Hunt had set a cunning trap for an incoming Labour Government by keeping spending plans too ‘tight’ and that it was ‘inevitable’ that spending would have to be higher than the figures offered last week.
Yet is it really impossible to find substantial savings? Or is it that the Government hasn’t been looking hard enough?
A huge chunk of public spending goes on quangos. In 2021, an annual report was published by the Cabinet Office, Public Bodies 2020. It ‘gives data on non-departmental public bodies, executive agencies and non-ministerial departments’. It listed 295 such entities. Their total annual spending comes to a staggering £224bn. It is disappointing that given such a significant sum there is not greater scrutiny given to it from politicians, the media and others.
What is even worse is that the figures are so out of date. Where is the report for Public Bodies 2021? Or Public Bodies 2022? Or Public Bodies 2023? When I sent the Cabinet Office a Freedom of Information request last July, asking how much is spent on quangos, they replied that they knew but they wouldn’t tell me as, ‘we consider it is reasonable in all the circumstances that the information held should be withheld from disclosure until the future date of publication’.
In January, I asked for an update on the publication date. They replied it would be ‘in the coming months’. The transparency requirement is supposed to be subject to annual publication. That fact that it is scheduled is used as an exemption from Freedom of Information requests. That is an excuse that can be used even when the publication does not actually take place. Thus a commitment to transparency in theory is used to prevent transparency in practice.
Despite being thwarted in this way, I’m afraid it is a pretty good guess that the spending will be even higher. If spending had risen with inflation since 2020, then quangos would be in receipt of £271bn.
We have also seen a smattering of new ones emerge: Building Digital UK, the Trade Remedies Authority, Active Travel England, the Health Services Safety Investigations Body and the Office for Environmental Protection. These are just a few, and God only knows what they are all supposed to do. But I don’t imagine they will come cheap.
We can get some more clues from a few spot checks. Some individual quangos have continued to make the effort to publish their annual accounts. The Arts Council got £490m from the taxpayer in 2020. The latest accounts state the ‘funds received from the Department for Culture, Media and Sport’ as being £524m.
Or take the case of the Environment Agency. That was funded by the taxpayer to the tune of £880m in 2000. The latest figures state ‘funding received from Defra; came to £1.3bn in 2022/23.
Some quangos are much smaller, of course. In 2022/23, the Office for Budget Responsibility cost us £4.4m. No ‘implausible austerity’ for their staff to worry about. Have its predictions become any more accurate with the increase in spending?
There is an argument here about democracy as well as wasteful spending. If you abolish a quango then there is the question of what will happen to whatever function it was performing – imposing regulations, handing out subsidies, publishing reports and so on. Even if some of that is deemed worthwhile, it should be carried out by government departments directly, so that there is proper accountability.
Suppose there is a quango concerned with regulating widgets. There may even be some such body. Perhaps the regulatory burden could be eased but not abolished. Let us imagine the number of regulations was cut from 100 to ten and small firms were exempted altogether. That rather than being renewed annually, the Widget Licence could last for three years. That the form to fill in could be cut from 50 pages to five. All the details about diversity and gender pay in widget production were lifted. But still it was considered that some widget regulation should be retained. That does not mean that the quango should survive.
Then a minister should be accountable for it. If the industry said that the export drive was being harmed. That some regulation was perversely making widgets more expensive, or of lower quality, or less safe, then the minister should not simply be able to reply: ‘Don’t blame us. We are only the Government. This is a matter for the Widget Council.’ Doubtless adding in a pious tone that it would be ‘inappropriate’ to ‘interfere’. The Widget Council, keen on empire building, would always want more regulation to justify a bigger budget.
Where is His Majesty’s Opposition in all this? The Labour Party has been rather quiet about the growth of the quango State. They rather like this force that ensures we conform to socialist regimentation regardless of the election cycle.
But Conservatives should speak out. Some may feel it is too late. But consider what Javier Milei has achieved with his chainsaw in Argentina in just three months in his efforts to shrink the state – without even having a majority in Parliament.
It is not inevitable that the quangocrats run the country and charge us ever larger sums for the privilege of being bossed around. All that is needed is the political will to overthrow them. A good start would be the Cabinet Office publishing the figures on just how bad the situation has got.
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