Cut backs are inevitable. But will it be more barbecue than bonfire?
There are now at least 790 quangos in the UK. Some estimates suggest there could actually be more than 1,100 unelected organisations in our country paid for by the taxpayer to carry out aspects of government policy. There are over 80 related to education and training alone.
Official figures show that the quangos we know about accounted for over £34 billion of public spending, and received a twelve percent increase in funding. Although the number of quangos has decreased in the last 10 years, those that are left spend more. There are now some big questions that need to be asked about the education quangocracy.
First just how accountable are these Quangos against the backdrop of haemorrhaging trust in our government and quasi government institutions. Secondly, do they provide good value for money for taxpayers and indeed can they be afforded in the light of the debt crisis. Thirdly are they effective -do they make a difference to the lives of learners and improve outcomes. The fact that we have to ask these questions, for which there are no quick and obvious answers , backed by evidence, speaks volumes about their lack of accountability and transparency and indeed the lax regulatory environment within which they have been allowed to operate. Many, of course, are not subject to the Freedom of Information Act, though heavily reliant on grant funding, so have less exacting public disclosure requirements than Government Departments, although carrying out tasks for the Government.
David Laws when he was the Liberal Democrats education spokesman said: “The rise of education quangos has been incredibly expensive and there’s little evidence to suggest they have raised standards. At a time when public finances are being squeezed, we must ask if these quangos are necessary. When infant class sizes are rising and schools need more money to support struggling pupils, we need to be looking at ways to divert more money to the front line rather than to bureaucrats.” Laws is now Chief Secretary at the Treasury. His job – to identify waste, deliver efficiencies and to pressure Ministers to make cuts in Departmental budgets.
Quangos chiefs more comfortable in measuring inputs than outputs, will be sweating.
The Tories in opposition pledged to cut quangos. David Cameron in a speech in London on Quangos in 2009 pledged to review all quangos to see if they were really necessary. He instructed the Shadow Cabinet to review every independent public body that sat within their portfolio. For each one, they were to ask key questions:
Does this organisation need to exist? If its functions are necessary, which of them should be carried out in a directly accountable way within the department?
And which, if any, should be carried out independently, at arm’s length from political influence? If there really is a need for an independent quango, how can we make sure it is as small as possible, operating with maximum efficiency, frugality and respect for taxpayers’ money? He added the general observation, that “We need to reduce the number, size, scope and influence of quangos”. Presumably the results of this informal review will be made available over the coming weeks.
One additional question that should be asked is how these Quangos impact on the education market, given that they are not competitively neutral?
The new education secretary, Michael Gove, said every effort had to be “directed to identifying waste and unnecessary bureaucracy” to “concentrate resources where they are needed: in the classroom”. David Willets wants to significantly rationalise the system of publicly-funded improvement organisations (ie Quangos). He told last years AOC conference “The UK Commission for Employment and Skills has recommended all improvement organisations should be merged into one body. We are looking at that proposal very carefully.” The Commission in its report to “Towards Ambition 2020: skills, jobs, growth” said that there are at least 30 too many Government-funded bodies. And with each having its own different rules and requirements, they have made the UK training system too complex and cluttered. The solution put forward in Section 7 of the 35-page document includes the merger into one body of all quality improvement agencies that have overlapping responsibilities “including Becta, the Learning and Skills Improvement Service, Standards Verification UK and the non-SSC elements of Lifelong Learning UK”. The report says this should be followed immediately by a 50 per cent cut in their collective budgets and a progressive transfer of “the remaining quality improvement and workforce development funding to providers within three years to create sector accountability and better value for money”. The coalition has promised action to cut quangos in the skills sector.
Private sector companies in the education sector will tell you that Quangos cross subsidise and can conceal the real costs of their bids when competing for contracts, so giving them a competitive advantage, while selling themselves on the back of implicit government guarantees and backed by guaranteed income streams from long term government contracts, many of which are not put out to open tender. This affects both the domestic and foreign markets increasing the costs and risks of participating in the markets. The SSAT, for example, which gets most of its income through different streams from the taxpayer, is busy competing against private UK companies abroad for contracts. Indeed when Quangos compete abroad for contracts they receive more support from UK officials than private companies. True. Try pitching for education contracts that the British Council is interested in and see just how much the local embassy helps you, or indeed the British Council ( though the BC will tell you they promote UK education abroad-part of its justification for getting public money )
It would be worth senior quango managers revisiting the Nolan principles. Two in particular spring to mind. On openness – ‘Holders of public office should be as open as possible about all the decisions and actions that they take. They should give reasons for their decisions and restrict information only when the wider public interest clearly demands’. And on Accountability - ‘Holders of public office are accountable for their decisions and actions to the public and must submit themselves to whatever scrutiny is appropriate to their office.’ If they can demonstrate that they are essential for regulation or add value to learners in the classroom or elsewhere, then fine but in the latter case market test them. Of those that are left make them all subject to greater real transparency and accountability.
And the time has surely come for a proper audit of quangos, rather than some informal process, and for those that can demonstrate that they fulfil an essential purpose and deliver public value to be held more rigorously accountable, with the rest abolished. Ironically a regulator might be needed to control the activities of quangos in the market or a ban introduced on quangos from competing in the market for specified services unless they can demonstrate unequivocally that they are competitively neutral and do not cross subsidise . They should all be subject to the Freedom of Information Act. Academy schools will be subject to FOIA, or that was the intention of the last Government (by September 2011) but not the Quango that supports them, the SSAT. What sense does that make?
All quangos should publish their yearly results on the web, in searchable formats, against clear performance benchmarks. (no it doesn’t happen at the moment) And be held regularly accountable to Parliament, through Select Committees hearings. (again this only happens with a handful of quangos) Over to the coalition Government on this. Action on quangos ticks all the reform boxes. Accountability, transparency, productivity, value for money, cost savings and effectiveness. What we literally can’t afford is some cosmetic exercise that fails to secure value for money for us taxpayers.